Ask Terry Questions First Time Home Purchase With Settlement Money

First Time Home Purchase With Settlement Money

By Terry Savage on August 10, 2016 | Housing / Real Estate

I have a question on this. I have decided to take half of my divorce settlement 26k after a year separation and use it toward purchasing a home and the rest for cash reserves. I haven't worked for the past year to get our girls settled to the divorce and was primarily a stay at home mom before that. Buying for me in Ohio is cheaper than renting and with a 20% down payment on a 55k house my payments would be around $300 a month versus $600 to $700+ for rent. I have based the entirety of my budget around a full time job at minimum wage until I can find a better position and I do currently have a partner for financial support but want this on my budget not his as the house will be solely in my name. Will it be possible, if going to work straight away at any job I can get to get a loan if I put 20-25% down and I have credit hitting just above 700? My total monthly bills not counting rent are less than $300 since I've always lived within my means and have no problem living on Ramen so I can have the house paid for in 5 years.

Terry Says

The only way is to try to get approved for the loan BEFORE you go house shopping. If this is your first time owning a home, there may be some special state programs to help you.  But there are other costs to home ownership -- including property taxes and insurance. And for a house at that price there may be needed repairs You should probably get some counseling before you take on this challenge. Call 800-388-2227, the National Foundation for Credit Counseling. That will put you in touch with the nearest local agency, and they can help you work through the details. I admire your determination, but you need some support for this big step.



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