Looking to buy First House, And I Know Nothing

kbearmoneyMarch 23, 2010

Not sure if this is the right place to find answers, but I gotta start somewhere.

Ok, I'm interested in buying a 2 or 3 bedroom modular home. My family has an acre of land and that's where I'll put it. I'm single w/ no kids and by the end of the year, no bills.

I've never owned a credit card, but built my credit over the last couple of years from getting a loan to buy a car. I have a job doing but my hrs are usually around 12 a week.

Someone told me I should look into something called HUD Homeownership program, something like section 8.

I need to know where do I start. If I can get into this program, do I go to the people that sell modular homes, do I go to the bank? Can I pick my own place? Even if I don't get the homeownership voucher, where should I turn to get the lowest possible payments (income based if possible)?

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Hi, I'm going to suggest you post this in the subforum called Manufactured Homes (you'll see it in the list along with this one) because people there have a lot more experience with those homes. Do ask your bank what the sequence is for getting financing but be prepared for possible problems due to your lack of what they'll see as a 'solid' job, long credit history, etc. You sound like you are trying to keep up a good credit score, which is great, but you want to be very careful about what to do now. For one thing, asking for lowest possible payments (and I definitely understand about those, being on a fixed income myself) is not always the way to go because it involves paying so much to the lenders in interest, and having to wait so long before you own much of anything, even if you plan to sell in a few years, trying to move up. Plus just as important is how much you can afford to use for a down payment - makes a huge difference to the whole picture. BTW, HUD may be 'the' place for you to start, and it may not be. Buying property is not something you just jump into without learning more and that takes time -it's complex - but even thinking about something like Section 8 is not the right way to go! You won't get something for nothing, there are going to be many unexpected roadblocks and disasters if you do that, so don't try to rush the process. Not having recognized credit now is one thing, having to declare bankruptcy in future is something else, and yes I want to just scare you a little here to make sure you take everything into account :-).

    Bookmark   March 24, 2010 at 6:11AM
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Start with your down payment. How much do you have? That's an indication of your personal involvement in the process. The less personal involvement and risk by you equals more risk by the bank, equals a higher interest loan or no loan. Manufactured homes are the highest risk already and many aren't eligible for bank loans.

Can you get more hours at work? An additional job? A sibling or friend to roommate and co own and share the payment? Are your parents willing to co sign and be responsible for the note? (Most won't, nor should they.)

Your family owns the land? Are they willing to sell to you? If you don't own the land how do you plan to legally occupy it? A lease agreement? A gift? Does it have electrical and septic systems already or will those need to be installed?

I;m sympathetic to your dream of owning your own home, but right now, it seems you would be best served by continuing to live at home and accumulating a larger downpayment for the future when you hold a full time job and are better able to take care of the responsibilities and expenses of home ownership.

    Bookmark   March 24, 2010 at 10:00AM
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Are you talking about a modular home or manufactured home? Modular is when they build wall sections off site and then deliver the pieces to be assembled on a traditional foundation. Manufactured homes are mobile homes.

The lending process are requirements are drastically different.

Really though, if you are single with no kids, you need a job. Not a 12 hour per week job, a real full time job. That is step 1 in being able to afford a house of your own. If you are only working 30% of a real work week, it will be all but impossible to make 100% of a real mortgage payment. It is great to have home ownership as a goal, but you need to take the concrete steps that can turn that goal into a reality.

    Bookmark   March 24, 2010 at 11:22AM
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Agree with what the others have said ...

How do you plan on making the monthly payment for the home, taxes and insurance?

The HUD Section 8 program is for people who have Section 8 benefits in additional to enough income to qualify for a mortgage. Do you?

As mentioned above also, the land will need to be in your name, is it?

    Bookmark   March 25, 2010 at 12:34PM
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I was right there with you until you said you work 12 hrs a week.

Even if the land, house, appliances, and even the furniture were given to you free and clear, you've got the following to worry about:

Property Tax
Homeowners Insurance
Preventative maintenance (HVAC service, Water heater, pest control, etc...)
Repairs (anything and everything--roof, broken washing machine, busted furnace, leaking faucet, cracked toilet)

Monthly utilies

I just don't see how you've got the financial means to maintain a home, let alone purchase one.

Keep saving, and look for better (and full time!) employment!

Or, if you have no bills/obligations currently, see about sending yourself back to school for something that is going to increase your earning potential (healthcare?)

Good luck.

    Bookmark   March 25, 2010 at 1:56PM
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