Buying a house

Money Management
1

Hello group! My sister has 10K and her credit is 550 … can she buy a house in Miami or other place in Florida like Orlando or Tampa? Is there any help for first buyers?

2

Good job on your sister saving the $10K. That’s a great achievement. I think her challenge will be credit score. There are things she can do to get that higher and the higher it climbs, supposedly the better the rate she is offered. The book I just finished reading has a whole section on this topic (buying a house and low credit scores). I got access to it through the library and she might be able to as well. Have her check out - All Your Worth by Elizabeth Warren & Amelia Warren Tyagi.

She can do it! I know she can if she already saved up some money. Good luck to your family!

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3

I would strongly recommend that she sit with a HUD Housing Counselor and talk about her plans and what options are out there for her. They are a great resource and it should not cost anything. They will talk with her about ways to increase her credit scores and about the MANY options available for first time homebuyers. There are more options than most people are aware of.

Google HUD Housing Counseling in her area.

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4

Here’s a few ways to increase your credit score quickly:

  1. Use credit cards, so you have credit to improve upon.

  2. Reduce your expense ratio by paying your debts off twice a month (one auto pay, and pay once manually).

  3. Reduce your expense ratio further by having your credit card increase your credit limit (obviously, spend the same as you would each month, or less if possible).

The 3 methods above boosted my score quite rapidly within a span of a few months.

I think there’s some credit score threshold guidelines to purchase a house. But you don’t want to buy a house just as soon as you can. This is because you’ll get bad financing. It’s preferable to wait an extra 3-6 months and get it over 750 or something so you can pay a lot less for the mortgage over a 30y timeframe.

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https://goodmoneygoodlife.com

5

I’d recommend finding a realtor who can help your sister find properties within her budget. With the housing market (especially in Florida) so hot at the moment, patience can be key to finding that perfect new home. I’d even consider waiting a couple years in hopes that Florida is simply in the midst of yet another boom/bust cycle.

Also, here’s a recent Penny Hoarder article on tips for buying and selling a home in 2022 that has some more insights: https://www.thepennyhoarder.co…low-hottest-markets/

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6

Thanks for your response to this @will.s

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