The House that Built Me

...Or us really. I've been excited to announce this for a while now, but wanted to wait until we had more information. Ryan and I went to the bank to see about a home loan today!!!! This might seem like it's coming totally out of the blue, but it's something we have been talking about for at least six months. I thought it would be interesting, since we're young, first time house buyers, and most of my friends are young and still renting, to chronicle (good and bad) our experiences with the whole process! I know next to nothing about buying a house, getting a loan or working with a realtor, so what I do learn along the way, I'd love to share, so here goes nothing!

Our Facts:

I understand that everyone is going to be in a different financial situation than us, but I wanted to share our history and what we're up against trying to secure a loan. So, as most people know, Ryan and I are both recovering alcoholics (for those that didn't know that about Ryan, email me later... I've got pictures), and being an alcoholic sometimes not only hurts you emotionally and physically, but financially as well. In AA, it's called "financial wreckage". I was lucky in that I never had any major debts, for me, my financial security, even when drinking was still a number one priority, so my credit score is still intact. I can't say Ryan has been so lucky. While he was out YOLOing it up, he was racking up bad debt like mad and letting accounts, credit cards, you name it, get sent to collections. So where my credit score falls somewhere in the upper 700's (best), he's barely scraping by in the low 600's (bad).

I don't get away scott free though in the loan hunt. Having gone to treatment and thus being let go from Enterprise, I have a 6 month employment gap on my record with only a little over a year at my current job. My understanding is that lenders like to see you have two solid years of earning history before you're a shoe-in for a loan. It also hurts that I only brought in about $7,000 total on last year's tax return. Ouch. Ryan has been working on his credit score ever since he got a car loan last year. Previously, he had something like a 550 (which is like lower than any D level score I've ever seen). Over the past year, he has worked hard to make financial amends by paying off creditors (to the tune of around $6000) and making car payments on time and over the minimum amount. Unbeknownst to either of us though, three more creditors came forward after the last pull of Ryan's credit score, so that's what we're working on paying off now. That will hopefully boost his score for the future.

Through the lending institution we chose to go to first, Wauna Federal Credit Union, there are two loans for first time home buyers. A USDA loan and an FHA loan. From what I gathered, the main difference between the two loans, is that the USDA loan requires 0% down at signing, where as the FHA loan requires roughly 3% of the cost of the house you're buying at time of signing. In order to qualify for a USDA loan, both applicants must have over a 640 credit score on all three credit score models (Equifax, Experian and TransUnion), which we didn't. The good news is that we did qualify to submit our information for the FHA loan, but just barely. What I mean by that is that Ryan's lowest model scored him literally one point over the necessary 620. Yikes.

From here, Natasha, our home loan officer, submits our tax returns, pay stubs and credit history to the Federal Housing Administration (FHA). At this point, they are looking at our past earnings and future earning potential to see if we are good enough candidates to pay back their loan. We have no idea what dollar figure they'll come back with, if any at all, so now we wait.

What Happens Next?

If we are approved for a loan and it's to our liking, we well get a letter of pre-approval from the bank and we will head out the door to look for a realtor. If we are not approved, or not approved for enough money to buy anything substantial, we'll put this whole process on hold. I will continue working at KLEAN, building my work history, Ryan will continue to pay off his debts, and we will start saving for a future down payment and renovation budget (because of course we are getting a fixer upper!!).

But that's not the fun part, so venture with me, if you will, into my dreamboat fantasy land.

Because Ryan and I are both recovering alcoholics and find it ever so hard to remain "in the moment", we have already picked out the house we are going to buy (without ever having set foot in it, naturally).

Here she is in all of her charming 1900's glory. For those who want to see more pictures and scope the scene, the MLS number is 13-589. She needs some work and love, and I have all of that to spare. 

Obviously, if we are approved, we will check out multiple houses before we make any major decisions. From what I have heard, if you buy a house, you want to wait at least 5 years before putting it back on the market, so we'll be locked into whatever we decided to purchase for at least that long. I know that we're not looking to find our forever home right now (especially not in Astoria Effing Oregon of all places), but this is a starter house, which we could see potentially turning into a rental down the road. It's also coming up on summer which is primetime for house selling, so us making a gut decision with buying the first house whose pictures we've fallen in love with is a little silly. So don't worry friends, our sanity is (sort of) intact. 

Going back briefly to what happens if we're not approved, I will let you guys know what our plan of attack is. How we propose to save money, pay off debts and live a more frugal lifestyle (because who doesn't want that). 

If we are approved, look forward to realtor advice, our list of "must haves" in a house and some overall really exciting photos of our house hunting process, plus MUCH more!!! We'll know sometime early next week so stay tuned!!

Also:

If any of you out there have any first time home buyers experience or advice, PLEASE, PLEASE, PLEASE (!!!) contact me! We are greenhorns on the ship of life.