I don't know your age and finances. My advice is go to a competant licensed realtor and tell all. They want a sell sure, but a good one can see what type of rates and if someone will accept you. You do not have to have a certain property picked out to apply for a loan, they will see if and how much you qualify for and your monthly rates and interest in general. Do Not use an on line mortage broker, you know the ones that work at home and sell for 20 companies, because as well they will spread your information all over the place and actually lower your credit score with too many inquires. This is very common out here now, click here, you know. As far as paying off your debts, take a hard look at what's best and know that even some of the companies if you pay them off, doesn't mean they won't wait for 6 months to show it's been paid off. If you are a single custodial mom there are sources that would give you maybe a better loan deal as well government agencies. There are as well often rent to own nice houses that you could deal with. If so, be sure you have at least 2 years to buy it out and some may let you ad a clause if the rates get too high at that time you are out of the contract, but few. That way you have a home per say of your own and can treat it as your own, but you loose the interest write off maybe, you need to check that part out as IRS changes often.I am getting a divorce, and have a settlement coming. Need advice on renting or buying home?
I don't think I would rush into buying a house especially after the emotional distress associated with divorce.
Here is a thought on what to do with your down payment. I just purchased a ';LIQUID CERTIFICATE OF DEPOSIT';. The term is for 8 months. It has a floor of $5,000. Any amount over the 5,000 amount you can take out of the CD without penalty. You can withdraw funds once a week if you need it but you must always keep $5,000 in the account until the CD reaches maturity.
The advantage is you get a better rate of interest than in a bank account and yet you still have access to your money (liquidity). I don't know how many institutions offer this but Washington Mutual is offering them.
With a 600+ score you can buy now. You can also get a rate lock for 60 days until the settlement if you had a house you wanted. That way if rates climb higher you still get the lower rate from the lock. 650 or 750 can be the same rate depending on a few factors. Owning is always a better option provided you can do it. Don't rush yourself into a bad purchase though either. If you need some options I can help you out. Best of luck during your transition.
Buy, Buy, Buy... You can still work on your credit score in the meantime and you can always refinance later to lower your APR.
Don't get trapped paying someone else's mortgage.
First, you shouldn't have a problem qualifying for a mortgage with a score in the 600's. Simply wiping out your debt doesn't raise your score. Establilshing credit in your name and paying all of your bills on time does. Keeping the balances on credit cards low, also helps your score.
There are factors other than the financial ones to consider when deciding to buy or rent. Do you really want to move twice in one year? I imagine the divorce changed many things in your life and the lives of your kids (if you have them). You may benefit from the stability of moving into a house that you will own and stay in long-term, rather than renting.
Or, you may be looking at the divorce as an opportunity to point your life in a new direction. You may want to move to a different city or state. In that case, you don't want to be tied down to a house.
Regardless of what you decide, neither one is a bad choice. Having a chunk of money in a safe, interest bearing account is never a bad idea. Owning a home, rather than renting, is also not a bad idea. Only you know what is right for you.
First, I think what you should do first is rent as low as possible, bank your buy-out, and continue to save money. DON'T RUSH INTO BUYING A HOUSE, maybe wait a full year to decide.
But before you buy a house, make sure you have 3 to 6 months emergency fund, and a big down payment.
I recommend you contact Dave Ramsey and read his book. www.daveramsey.com
He has more specific stuff, but I listen to him a lot and the book changed how I look at money.
GOOD LUCK
Divorces are rough on you emotionally. Rent for a while and draw your interest. After you no longer even think about the divorce for long periods of time, then decide.
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