Want a house so bad :(

[Newtothisbutloveit]

Hello there, I am new here but I really like what I am reading. You, guys, give great advices! Thank you

In December 2006, hubby and I made a consumer proposal. We were young, freshly married, sinking into debts of our costly wedding and we sincerely thought we were doing the right thing following the advice of the bankruptcy agent..... It was only 6000$ of debts... We could have managed another way, we know it now, we didn't at the time.

Until now, I am still very resentful about the day I decided to sign these papers thinking that I was doing the best thing.

Meanwhile, we paid our due (finished in April 2010), Got loan for 3 different cars (1st for my husband in Feb. 2008 at the rate of 29%!, then one for me and he changed the first one for another for him both at a rate of 10% in November 2009), a secured credit card for him in January 2010, a line of credit for both of us since December 2010, a company credit card under his name in August 2011 and a personal credit card at my name since November of this year. We carry balance on some of them but never, never, never late nowhere!

We have 2 good jobs since 2 years and up (I work for the government which is - from what I heard a plus -when asking for credit).

We did a lot of work, it has been a long journey! Because of the proposal ur credit score is not now high (620 and 649). We are now looking for a house but we are renting since years (from 450$ per month to 1050$ per month since we moved), we had a son meanwhile and after almost 6 years of marriage we think it should be time for us to own our house.

We have almost no cashdown (less than 5000$ from our pockets or almost 10 000$ if we loan on all our credit cards and line of credit), when we spoke with a mortgage broker she told us that with the proposal still there in our credit files we will have to put at least 20 to 25% of the price of the house to be able to get approved.

I am frankly discouraged, we saw a house that we love which is at 259 900$ so we would be talking of 51 980$ minimum to be able to have it. There is no way we will be able to have that kind of money before many, many years!

We tried to look for less expensive ones which could suit our needs too, but we are always looking for at least 40 000$ of cashdown.

We don't know what to do, where to go, who to talk to, to be able to maybe achieve that reasonable dream.

We are paying more in renting per month than many are paying in mortgage. We can do it! We made errors: yes, but what do they want more to see that we can do it now? We learned from our error of the past....

Does anyone knows something which can help us in that sad, sad situation?

Btw if it can help, we are in the Montreal area and are looking for something in the suburbs of Montreal.

[Shwa Girl]

Sooo, would you be willing to buy a lower cost house that would need fixing up?
Would you be willing to wait and save more money to get a 25% down payment?
Would you be willing to take on a short term part time job to reach the 25% down payment level?

Being on SC and saving money with the rest of us is a great step.

My suggestions may seem harsh - sorry - but you will sleep really well in your "new house" when you get it.

Hope this helps.

[gourmetsue]

ShwaGirl asks great questions.

Easy to say but just be very patient and all I can say is do not borrow of your credit cards!!! We just bought a house and between the surprises (leaky basement, broken dishwasher) that come up after you move in, you will want to save that credit card room for emergencies.

It took us ages to save up for our down payment. We put money into our RRSP and then used the tax refunds we got back add to our down payment and closing costs. We didn't go on vacation until we'd been married almost 9 years.

Try cutting out small things, like dinners out, a coffee etc. Make them more of a treat that a regular thing. If you're that kind of person.

Calculate what you would be paying in mortgage / taxes / utility bills and house insurance every month and put the difference between your current rent and that number away into your RRSP or a high interest savings account.

Honestly putting 20% down will be a blessing in the end, you'll save CMHC fees, plus you'll pay way less in interest.

So while it may seem awful, I know I hated our apartment, you will get a house.

Good luck and keep your spirits up.

[Shwa Girl]

OP, like gourmetsue, we have surprises too. One shower needed new taps and a bit of plumbing work. One toilet needed replacing six months later. The washer needed replacing a year after we moved. The dishwasher died 1.5 years after we moved in.

We actually saved for 10 years to buy our house. Yikes - I know. But when we sit in it now, and look around, we are so thankful that we waited.

It was hard to wait, but so rewarding to not be stressed when things needed fixing - we had some money set aside for these things.

Good luck. I hope this helps you out.

[MortgageQueen]

Ditto on using credit cards!! Not good. There are other ways to speed up the process that are waaay safer. You can PIN me for more help if you like. Based on the info. you've posted, there's no reason you can't buy a house.
That said GOOD for you! for getting everything paid off. That's a real shame about the consumer proposal, especially for only $6000. But it's done and over and you can move on now.
What you need to consider seriously (like the wise posters previous said) is planning for contingencies. It's absolutely NOT the same as renting. You have property tax payments, utilities and every single repair all has to come out of your pocket. it would be a good thing to sit down and make a chart of where your money has to go. . .and see what you have left over for the things above. ALWAYS leave wiggle room for unexpected costs. You don't want your house to become a ball and chain either.
Your home should and can be a wonderful thing if you keep these things in practice. You WILL get a house. Don't lose hope.

[anisa]

I'm more of a down to basics kind of person.

I would try to find a less expensive rental place and just settle in for a while. save up more money, save as much as you can by cutting back on unecessary spending.

save up a lot for a down payment, and when you buy a house, buy one that is maybe a little older and less expensive. some older houses are weird and outdated, some are actually quite nice. it takes some looking around but it can be done. keep yourself open to options, and i guarantee that the more you explore the better the chance is of finding something that you really like.

I'll give you an example. We bought a house and my cousin bought a house. we are in the same regional area near toronto, but in 2 different cities right next to each other. we both bough houses that are the same age. my house is bigger, more updated, nicer looking and was roughly 70-80 THOUSAND dollars cheaper than hers. I live in a decent neighborhood with all the major ammenities nearby. awesome neighbors and near the city center. keep your options open and it is possible to find something that suits your needs




find something that you would be probably living in for 10 years. it should suit your needs for the long run, because you don't want to find that you need to change houses after 3 years and then go through the hassle and expense of buying another home.

I hope everything works out for you! Take it slow if you need to. I know that owning a home is money in your pocket, and renting is putting money in someone else's pocket, but if you rush and put only a little money down and get a mortgage for 30 yrs, you are paying a heck of a lot of extra interest anyways. isn't it better to wait, and save in a more stress free way?

[juniperjune]

Cut everything out that is not necessary for 2 years. Eat Kraft dinner and cheap cuts of meat. No new clothes, boots, shoes, movies, CD's. Rent is not cheap, nowhere on the Island of Mtl. If it is cheap, you do not want to live there lol
Bare minimum for 2 years, and buy off island.
That is what we did.
Good luck! It is not easy but doable and well worth it in the end!

[freefreefree]

Yeah, I agree with the rest of SC here that cut everything. even the little things. And stay away from credit cad balances. Only use credit card to get rebates which means you have to pay your balance on time. And look for ways to make or save money, even the little money like a few dollars. It adds up over time.

[Shwa Girl]

Cut everything out that is not necessary for 2 years. Eat Kraft dinner and cheap cuts of meat. No new clothes, boots, shoes, movies, CD's. Rent is not cheap, nowhere on the Island of Mtl. If it is cheap, you do not want to live there lol
Bare minimum for 2 years, and buy off island.
That is what we did.
Good luck! It is not easy but doable and well worth it in the end!

I think that SCs who buy smart don't need to eat KD. We are able to buy pink sticker items in produce, meat, groceries, bakery (whole wheat bread) for reallly good prices. And freezing and cooking as soon as possible, stretches the food items many meals.

[juniperjune]

I think that SCs who buy smart don't need to eat KD. We are able to buy pink sticker items in produce, meat, groceries, bakery (whole wheat bread) for reallly good prices. And freezing and cooking as soon as possible, stretches the food items many meals.

Oh, I agree with you. I just said KD to make a point! I have a foodsaver, so we buy stuff when it is on sale and stock up. I cook mostly everything from scratch. But not everyone has the freezer space that I do.

[Shwa Girl]

Oh, I agree with you. I just said KD to make a point! I have a foodsaver, so we buy stuff when it is on sale and stock up. I cook mostly everything from scratch. But not everyone has the freezer space that I do.

O.k.
OP said that they have two great jobs, with one being a government job. So, a small chest freezer can be bought with cash and used to freeze some items, even in a small apartment or house, IMO.

[Newtothisbutloveit]

Thank you for replying, you guys are awesome for taking the time to do so.

But frankly, these are not the answers I am looking for.... (except for Mortgage Queen answer)

I think we did our share of suffering and making sacrifices and all.

I find it frustrating and unfair to see people with many late payments in their credit history or people having low incomes being able to have a house (sometimes with only 5% cashdown or even no cashdown at all) only because their credit history is free of the words bankruptcy or consumer proposal. And please do not think that I am saying that to be snotty or anything, I am not like that at all. I am just stating a situation which is annoying me a lot.

When we wanted to buy me a car (it was needed for me to be able to go drive my son to his kindergarden and then to go to work) we were still in the proposal and I went to 3 places, some told me I could forget it, others told me that I would have to give a big cashdown of 3000$-4000$ to be able to access a 6 years old/almost 100 000 km car , another offered the same 29% interest rate that my husband was paying on the car he had for a car for me.

I had decided to abandon the idea and was driving a old car my dad was not using anymore asking myself everyday if it would make the winter. Until one day I found an ad on internet about being able to buy an almost brand new car with a reasonable interest rate. I called and the lady who work my file was a gem. She made me pass through and proposed that my husband change his car too because his interest rate was terrible. She made us both pass at 10% with 2 one year old cars, both under 40 000 km. She fought hard and she succeded, she made the bank look more into our files and trust us and until now 2 years later we never prove them wrong! Until lately (she left the city working elsewhere in Quebec) I was referring people to her, she is amazing. 10% of interest is not the best rate and sure that she was working for her pocket too in that deal BUT still she fought hard to get us the best rate available and to give us the possibility to walk away with 2 good cars, and I will never be thankful enough for that.

That is what I am looking for. Someone who can "work" our file deeply, something we can do which can make us access our dream. I don't think I am daydreaming for asking such thing.

What I find more ridiculous and more frustrating is that we are paying more in renting than what we could be paying in morgage for many houses that we saw. How much of a proof do these banks need to understand that we can pay our dues?

I do understand that a cash fund is needed in case of emergencies 100% and I do want to wait more to save some money for that but I find it disgusting that I have to save 20%-25% for the only reason of this word showing in my credit file.

I may sound sour and I am very sorry for that, really. On a daily basis I am sweet, sweet lady but this situation is having the best of me.... Totally unfair as I see it now...... and I want to find a way to have a house before 5-6-10 years. I am resilient, I don't want to give up.

If you guys still want to answer,feel free to do so, I am listening and reading to all of your advices although some of them made me feel so discouraged , you know some tips? Know someone? Know a "gem" mortgage broker?, An "easier mortgage lender" bank or anything, feel free to post it.

Thanks

[NuCoupon]

I'm sorry you're in this situation. I think it's unfair that lenders lend to people who have trouble paying back loans. I know the downpayment seems like a lot to save for, but you can do it. Maybe you'll get raises in your jobs. You never know what the future has in store Once you have a downpayment you'll be in a stronger financial position than if you went in with a borrowed downpayment at a high interest rate. Good luck!

[NuCoupon]

By the way, do you know a lot of people buying houses with 5% down or 0% down and 5% cashback? I thought it was rather rare.

[freefreefree]

By the way, do you know a lot of people buying houses with 5% down or 0% down and 5% cashback? I thought it was rather rare.

I know someone with that, but the interests you pay over time is way more.