I bought a house last month. I wanted to save money, so I skipped the professional inspection. Figured everything looked fine since the house is brand new and I thought that everything should be ok

Now I found a crack in the garage floor. It runs across the concrete. I have no idea if it's serious or just cosmetic

I went on forums and everyone says the same thing that I should have hired an inspector and that I should have used someone like Sure Building Inspection. It's all I hear…

So I went to their website and I see that they offer a year of free consultations. But would I have even used that? Or would I have just shoved the report in a drawer and forgotten about it?

I'm beating myself up. I don't know if I made a huge mistake. I don't know if this crack means my house is falling apart. I don't know what to do next

Has anyone here actually used an inspection report? Were they helpful? Or did they just freak you out with technical terms? I need to figure out my next move

>570 credit score, $0 down, first-time homebuyer. Is homeownership realistically possible for me?My wife and I are trying to figure out if becoming first-time homebuyers is even realistic for us, and I’m looking for honest advice from people who have been through it.

>Current situation:

>Credit score: around 570

>Down payment saved: $0

>First-time homebuyer

>Located in North Carolina

>No previous homeownership experience

>I keep hearing about FHA loans, USDA loans, down payment assistance programs, grants, etc., but it’s hard to tell what’s actually realistic versus marketing.

>My questions are:

>Is it possible to buy a home with a 570 credit score?

>Are there legitimate programs that help with little or no money down?

>What should my first steps be if I want to buy a home in the next 1–3 years?

>Should I focus entirely on improving my credit first?

>If you started in a similar position, what did your timeline look like?

>I’m not looking for someone to tell me what I want to hear. I’d rather hear the hard truth and build a realistic plan.

>Any advice, experiences, or things you wish you knew before buying your first home would be greatly appreciated.

>Thanks everyone.

I took this from a more active sub and thought I'd give my advice on it.

I'll cover two aspects:

1. improve credit
2. $0 down

First piece of advice would be to improve your credit.

I'd fix your credit in this order (highest impact first. This is from the first time buyer guide I wrote)

• Review and correct any mistakes.
• If there’s an account that shouldn’t be there, and is negatively impacting your score, then ask the credit bureaus to remove it.
• Pull your report at annualcreditreport.com
• Catch up on late payments (payment history is the highest weighted factor)
• Ask for pay-for-delete on collections.
  • If you have a collection, then ask them to delete it. “If I pay this, will you delete it as if it never existed and provide me with a letter of deletion?”
  • This will get rid of the collection account as if it never existed. Remember, ask if they'll delete the account if you pay it off. Not just mark it as 'paid.'
• Pay down credit cards below 30% of the limit
  • This helps the utilization aspect of your credit report
  • If you can’t pay it down, consider a consolidation loan. A consolidation loan pays off your high credit card debt and places it in an installment loan instead. This lowers your utilization and will likely have a positive impact on your credit score. If you do this, review the terms carefully. “Thar be loan sharks in the water.”
    • One thing you should consider is your own discipline. If you get a loan to pay off your credit cards, are you going to use that credit card again and bring the balance back up? Don’t do it if you’ll go back to old habits.
• Add a secured credit card (if needed)
  • Secured credit cards are credit cards that are backed by money in a savings account. Credit Unions offer them generously because there isn’t risk when it’s secured with money.
• Use the secured credit card wisely. If you pay late, then this won’t have helped at all. If you use more than 30% of the available limit, then it won’t help much either.
• Stay current and give it time.
• It may take up to 6 months to finally see the positive effects. Keep your credit card balances low or paid off. Keep paying your bills on time.

Then there's the $0 down aspect I want to cover here too

There are $0 down programs, and there are down payment assistance programs.

You'll need at least 620 credit score for most programs, and some have a much higher minimum score.

(this is also from my first time buyer guide)

Down payment assistance

These local down payment assistance programs come in two forms:

• Grants
• Loans

A grant is basically free money. If you qualify under specific restrictions, you get it.

If it isn’t a grant, then it’s a loan. There are three types of loans that the program might offer:

• Repayable, with interest
• Deferred, no interest
• Deferred and forgivable

Repayable With Interest

A repayable loan works how most loans work. They give you an amount to cover your down payment, and sometimes your closing costs, and you repay the amount in monthly increments while being charged an annual interest rate.

I’ve seen programs where the interest rate is lower than normal market rates, but I’ve seen other programs where the interest rate is higher than typical market rates.

I’ve seen programs where the repayment term is 10 years and others where the repayment term is 30 years.

Each program’s offer will vary.

Deferred Without Interest

If you were to compare this type of loan to cancer, then you’d call this one benign.

It doesn’t grow with interest.

These types of loans only come due when you refinance or sell the home.

If your home has appreciated enough, you may be able to include the loan amount in your new refinanced loan without paying it out of pocket.

When you sell, the loan is paid off with the proceeds of the sale.

Deferred and Forgivable

Not only are these loans at 0%, but they may forgive the amount they’ve loaned you. It usually comes with a qualification.

A common qualification is living in the home for a certain amount of time. Three years is common, but I’ve seen programs push it as high as 10 years.

If you move out just shy of meeting the forgivable period, you may be in luck. Some programs will forgive it in pieces.

For example, if you were loaned $10,000 with a three-year forgivable period but moved out in year two, the program may forgive 33.3% of the loan for each year.

So instead of owing the full $10,000 back, you may only owe $3,333.33.

The guide I’ve built out for all 50 states isn’t all-inclusive. I may have missed some. It also doesn’t take into consideration some national programs that exist.

If you’d like help determining which route might fit you best, visit newbhomebuyer.com/dpa, and someone will help you compare these programs side by side.

$0 Down Programs

Rather than assist you with the down payment, some lenders will forego the need for a down payment completely.

Here’s the list:

• VA mortgages
• USDA mortgages
• Portfolio loans from local banks

VA Mortgages

VA mortgages are strictly for eligible military veterans.

USDA Mortgages

USDA mortgages are strictly for rural areas. Here’s a map to show you which areas are eligible:

eligibility.sc.egov.usda.gov/eligibility

 

USDA loans also have income restrictions. The income restrictions are specific to the county and to household size. The more kids there are, the higher the income limit. On the same link as the map, there’s also a section to check if you make too much money.

 

Remember: this takes into account household income. So if there’s an adult who isn’t on the loan but is earning an income, that income must be considered as part of the overall household income.

Portfolio Loans From Local Banks

$0 down payment portfolio loans from local banks are determined by the local bank or credit union. It’s their loan, so they make the rules. Here are some common rules they put around these loans:

• Higher minimum credit score
• For first-time buyers only
• Lower debt-to-income ratios
• Purchase price/loan amount caps

One common benefit of these types of loans is that most of them will not charge a mortgage insurance payment. Double-check this as you explore those programs.

Hopefully this helps.

Sam

I write first time homebuyer tips at r/NewbHomebuyer

I'm going to run two scenarios on a couple of spreadsheets.

Invest vs pay extra toward the mortgage.

average mortgage rates today are at 6.52%

I'll peg the annual investment returns at 7%.

I know, SP500 has outperformed that historically. That's fine. 7% is a standard baseline used by investment firms. It seems conservative though. But what's also interesting is that the projection for the SP500 over the next 10 years will be around 6.5%

That said, I'll stick with 7%

I could make this short and say "Whatever % is greater, put your money toward that and you'll win."

7% > 6.5% so invest in 7%

But let me show you the math and you might come away with a different answer.

$400k loan amount, no PMI, 6.52% rate and we're only dealining with P/I

First, let me give you a strategy that we'll implement:

Bi-weekly vs monthly

If you pay toward your mortgage every two weeks to match your income deposit schedule, then you'd pay 13 payments per year instead of 12. (52 weeks in a year divided by 2 = 26, divided by 2 again = 13 payments)

Here's how soon you'll pay off the mortgage:

Year	Ending Balance
1	$392,935
2	$385,396
3	$377,350
4	$368,764
5	$359,601
6	$349,822
7	$339,386
8	$328,250
9	$316,365
10	$303,681
11	$290,145
12	$275,700
13	$260,285
14	$243,833
15	$226,277
16	$207,541
17	$187,546
18	$166,208
19	$143,436
20	$119,134
21	$93,200
22	$65,524
23	$35,987
24	$4,467
25	$0

You'd save 5.8 years and about $117k in interest

Let's say you kept your discipline and invested your mortgage payments toward a 7% investment account, here's how that would look over 30 years:

Year	Investment Balance
1	$0
2	$0
3	$0
4	$0
5	$0
6	$0
7	$0
8	$0
9	$0
10	$0
11	$0
12	$0
13	$0
14	$0
15	$0
16	$0
17	$0
18	$0
19	$0
20	$0
21	$0
22	$0
23	$0
24	$0
25	$28,156
26	$64,106
27	$102,573
28	$143,733
29	$187,774
30	$234,898

After 30 years of bi-weekly discipline, you'll end up with about $235k in retirement.

Let's compare that to strategy B:

pay the minimum toward the mortgage, invest the 13th yearly payment at 7%

Year	Mortgage Balance	Investment Balance
1	$395,546	$2,614
2	$390,793	$5,411
3	$385,720	$8,403
4	$380,307	$11,605
5	$374,530	$15,031
6	$368,365	$18,697
7	$361,785	$22,620
8	$354,764	$26,817
9	$347,271	$31,308
10	$339,274	$36,114
11	$330,741	$41,256
12	$321,634	$46,757
13	$311,915	$52,644
14	$301,543	$58,943
15	$290,474	$65,683
16	$278,662	$72,895
17	$266,056	$80,611
18	$252,603	$88,868
19	$238,246	$97,702
20	$222,925	$107,155
21	$206,574	$117,270
22	$189,125	$128,093
23	$170,504	$139,673
24	$150,631	$152,064
25	$129,424	$165,322
26	$106,791	$179,508
27	$82,638	$194,688
28	$56,863	$210,930
29	$29,355	$228,309
30	$0	$246,904

So there you have it.

investing wins by $11k.

The amount isn't a ton because the difference in rates is 0.5%

But if investment returns were closer to 10% (which many argue is the case for the SP500) then the gap would be about $180k

human behavior

Pulling your money out early.

withdrawing money from a retirement is easier than accessing your home's equity.

One is a few clicks and signatures. The other is a loan process.

Hardship withdrawls are easy to justify. A home's equity is more sticky.

simplification

paying off your mortgage is a guaranteed rate. I can see myself wanting to simplify things as I get older. Spreadsheet math isn't as important if your goal is to simplify everything.

stress

Does a larger retirement balance give you more peace of mind?

Or it could go the other way around:

The relief you feel when paying off that mortgage might make you feel invincible. Like you could get hit with anything and know that your monthly necessities are low because you don't have to make the mortgage payment.

I could see that freeing you up for a possibly better lifestyle. You aren't chained to a specific job because you don't have to pay the mortgage anyore.

You can take a less demanding job now.

go be a ballroom dancer, or write that novel you've been putting off. ;)

curious what your thoughts are on this topic

-Sam

I write first time buying tips and posts at r/NewbHomebuyer

I just made a spreadsheet for this based on 3 rules. Ramsey's rules, 30% gross, and 49.99% gross (that 49.99% is the amount a lender will approve. Approval doesn't mean affordable)

Part 1: Minimum for a lender

This is the bare minimum a lender would let you scrape by on, using the 49.99% back-end DTI ceiling that Fannie and Freddie allow. With no other debt (like credit cards, student loans, car loans etc). It doesn't mean you can afford it, and it doesn't always mean you'd get approved either. It's just the max DTI threshold I've seen get approved.

State	Minimum Income
NJ	$123,066
IL	$121,426
TX	$119,945
CT	$119,465
NE	$118,145
NH	$116,145
VT	$115,785
KS	$114,704
NY	$114,544
IA	$113,424
WI	$113,304
RI	$112,144
OH	$112,104
MI	$111,864
SD	$111,064
PA	$110,864
FL	$110,103
OK	$109,983
ME	$109,103
MA	$108,223
MN	$108,143
AK	$107,143
MD	$106,463
MO	$106,343
ND	$105,943
GA	$105,622
KY	$104,902
MS	$104,862
IN	$104,382
AR	$104,262
MT	$104,262
NM	$104,182
OR	$104,142
NC	$103,862
WA	$103,662
VA	$103,222
LA	$103,182
CA	$102,782
TN	$102,222
CO	$102,182
AZ	$101,862
ID	$101,222
SC	$101,022
WY	$100,742
WV	$100,341
DE	$100,301
NV	$100,181
UT	$99,941
AL	$99,381
HI	$96,861

Part 2: The minimum income needed for the Ramsey 25% net take-home rule

This one factors in property taxes, homeowners insurance, state income tax, federal tax, FICA, and a 6% 401k contribution. That's why no-income-tax states like TX and FL come out lower than states like NJ or CA, even at similar home prices.

State	Minimum Income
NJ	$450,269
CT	$405,971
VT	$404,697
IL	$398,827
NE	$398,399
WI	$386,961
NY	$386,139
MN	$382,278
KS	$378,920
IA	$375,448
RI	$371,226
ME	$367,320
OR	$366,461
TX	$362,201
MI	$359,115
CA	$356,889
OH	$355,415
OK	$355,297
MA	$350,330
NH	$349,265
PA	$348,404
MD	$348,361
HI	$344,212
GA	$343,036
MO	$342,183
MT	$341,014
NM	$340,713
MS	$337,897
VA	$336,214
AR	$335,094
KY	$332,266
SD	$331,971
SC	$331,765
DE	$330,212
NC	$329,893
ID	$329,005
FL	$328,703
ND	$327,647
LA	$327,410
IN	$325,096
CO	$324,593
WV	$321,843
AK	$318,627
UT	$317,757
AL	$317,619
AZ	$313,179
WA	$306,780
TN	$301,878
WY	$296,839
NV	$294,933

Part 3: The 30%-of-your-gross rule

The middle ground rule of thumb. Doesn't account for taxes or anything else. Just 30% of your gross income goes to housing.

State	Minimum Income
NJ	$205,069
IL	$202,336
TX	$199,869
CT	$199,069
NE	$196,869
NH	$193,536
VT	$192,936
KS	$191,136
NY	$190,869
IA	$189,002
WI	$188,802
RI	$186,869
OH	$186,802
MI	$186,402
SD	$185,069
PA	$184,736
FL	$183,469
OK	$183,269
ME	$181,802
MA	$180,336
MN	$180,202
AK	$178,536
MD	$177,402
MO	$177,202
ND	$176,536
GA	$176,002
KY	$174,802
MS	$174,736
IN	$173,936
AR	$173,736
MT	$173,736
NM	$173,602
OR	$173,536
NC	$173,069
WA	$172,736
VA	$172,002
LA	$171,936
CA	$171,269
TN	$170,336
CO	$170,269
AZ	$169,736
ID	$168,669
SC	$168,336
WY	$167,869
WV	$167,202
DE	$167,136
NV	$166,936
UT	$166,536
AL	$165,602
HI	$161,402

Part 4: Combined so you can see it all side by side

State	Lender	30% Gross	25% Net
NJ	$123,066	$205,069	$450,269
IL	$121,426	$202,336	$398,827
TX	$119,945	$199,869	$362,201
CT	$119,465	$199,069	$405,971
NE	$118,145	$196,869	$398,399
NH	$116,145	$193,536	$349,265
VT	$115,785	$192,936	$404,697
KS	$114,704	$191,136	$378,920
NY	$114,544	$190,869	$386,139
IA	$113,424	$189,002	$375,448
WI	$113,304	$188,802	$386,961
RI	$112,144	$186,869	$371,226
OH	$112,104	$186,802	$355,415
MI	$111,864	$186,402	$359,115
SD	$111,064	$185,069	$331,971
PA	$110,864	$184,736	$348,404
FL	$110,103	$183,469	$328,703
OK	$109,983	$183,269	$355,297
ME	$109,103	$181,802	$367,320
MA	$108,223	$180,336	$350,330
MN	$108,143	$180,202	$382,278
AK	$107,143	$178,536	$318,627
MD	$106,463	$177,402	$348,361
MO	$106,343	$177,202	$342,183
ND	$105,943	$176,536	$327,647
GA	$105,622	$176,002	$343,036
KY	$104,902	$174,802	$332,266
MS	$104,862	$174,736	$337,897
IN	$104,382	$173,936	$325,096
AR	$104,262	$173,736	$335,094
MT	$104,262	$173,736	$341,014
NM	$104,182	$173,602	$340,713
OR	$104,142	$173,536	$366,461
NC	$103,862	$173,069	$329,893
WA	$103,662	$172,736	$306,780
VA	$103,222	$172,002	$336,214
LA	$103,182	$171,936	$327,410
CA	$102,782	$171,269	$356,889
TN	$102,222	$170,336	$301,878
CO	$102,182	$170,269	$324,593
AZ	$101,862	$169,736	$313,179
ID	$101,222	$168,669	$329,005
SC	$101,022	$168,336	$331,765
WY	$100,742	$167,869	$296,839
WV	$100,341	$167,202	$321,843
DE	$100,301	$167,136	$330,212
NV	$100,181	$166,936	$294,933
UT	$99,941	$166,536	$317,757
AL	$99,381	$165,602	$317,619
HI	$96,861	$161,402	$344,212

I write educational posts on buying your home for the first time. r/NewbHomebuyer

>I see a lot of people posting about closing but I don't see much good advice posts and threads.

>We're hoping to finally get out of this damn apartment this year but we have a lot of uphill battles. Looking at rural upstate NY so I was considering USDA guaranteed or a normal FHA. We have down payment problems and currently debt/credit line problems. Trying to solve the latter while looking for programs and options like above to help us with the former.

>I can give more details but I was really hoping to find a general guide. If someone has some good expertise and insight I can DM details of our situation.

I made something for this community and I hope it helps. I'm also open to feedback.

https://tools.newbhomebuyer.com/

It's meant to give you tools step at a time for the homebuying process, rather than dumping everything on you all at once.

So if you're in the planning stage, there are a couple of tools to help you plan. If you're already shopping for a home, there are tools to help you there too.

Check it out, let me know if it's helpful.

Sam