Home Loans DIY – How to Buy a Home with 3% Down with FHA Home Loans!

Recently, I was trying to move to a new place because my super-cramped 1-bedroom apartment is just getting smaller and smaller. Well, to rent a bigger place in San Francisco, it’s going to cost me a lot more money plus I’ve been realizing that I’ve probably spent a lot of money of rent, which isn’t adding up to anything.

Anyways, somewhere on the internet I read that you can buy a house in America with just 3% down. I didn’t even have 3% saved up but I did get some help from my family and friends. (as anyone “gift” to you for an FHA home loan if you are short)

I did however get pre-approved now for a home loan first time in my life! My credit was bad (while I was starting my business, this very site, was started on a “deck” of shiny credit cards. Back in 2007 I had a debt of about $50,000 in credit cards, which obviously added with mega-high 28% interest every month. I probably had the worst credit in San Francisco. Hey, but I am working from home now, I took the risk and made it!)

Anyways, my credit has improved and I’ve paid off all my debts as of 2 months ago and although my credit is still nowhere perfect, I found FHA home loans, which allows you to put down just 3% on a home loan and borrow the rest from the bank.

This FHA home loan, I found out, is great for those of you low-to-mid income people and people with less than stellar credit like me.

For me, this wasn’t really an option, I can’t rent anymore because I also have to pay a lot of taxes since my business needs to pay Uncle Sam every year. By getting a house, I should be able to deduct some of my mortgage payments plus a lot more tax benefits for homeowners in the U.S.

Nothing is set though, I might still go the rent route because houses are so darn expensive in San Francisco, my home loan could afford another 1-bedroom in probably the worst place in town. I might even move to a nearby city that’s cheaper.

But, one thing I didn’t forget to do, I’ve documented the whole process of getting an FHA loan over at my new Home Loans blog. If you have all the right papers such as your tax returns and W2s, you can get pre-approved by a mortgage broker in matter of hours. Yes, it’s that easy, if a mortgage dummy like me can get pre-approved, you can too!

Anyways, I hope this guide on how to get an FHA home loan can help someone else who’s a first-time home buyer.

Also, even if you are not ready to buy a home yet but you are planning, you should really read up on Debt-to-Income Ratio as it will determine basically how much you can borrow from the bank.  If you don’t plan now and you want to get that $500,000 house next year, you better know that you can’t just do it by saving for a down-payment. (unless you are gonna buy it all with hard, cold CASH!)

I don’t know if I will make it through but wish me luck as getting a new place will really help Zedomax.com grow too.  My 1-bedroom apartment that I have been living in since 2007 now looks like a pig-sty and I am not kidding, I don’t want anyone to come over.   It’s filled with gadgets, computers, documents, and other junk that has no room to stay. :p

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