Question
My husband and I have successfully completed a debt management plan and would like to buy a house in the next few months. We are both school teachers. Obviously, our debt ratio is non-existent and we have decent credit scores. Are there any programs out there that would enable that?
Answer
Keeping my answer simple, if you are realistic about the size house you want, the best mortgage program for you will be FHA. FHA home loans are very lenient on debt management, or debt settlement programs, as they are viewed as a responsible thing to do for getting out of debt. Congratulations. That must feel good getting it done.
Monitor Your Credit Report And Fix Problems
Over the next few months you will want to be monitoring your credit scores to make sure that they are rebounding. If you have not seen your report in a while you may want to get a copy with your scores. The higher the score, the better loan programs and interest rates you can get. Also, if there is any left over negative information on your report from the program and the creditors in the program you will want to get those corrected accordingly. GetPreQualified.com has quite a bit of information on Credit Repair.
FHA May Be Your Best Option
FHA will require the least amount down, and with the current market in most of the country you ought to be able to negotiate some closing cost assistance from the seller. A good real estate agent can help you with this. Check out our articles Using the AmeriDream program for buying a home and a Personal Testimony to using AmeriDream.
Here is a link the the FHA articles on GetPreQualified.com that you might find some good information in. Also, I recommend that you look through the Mortgage Purchase and Real Estate Buy a Home sections.
Teacher Loans With Fannie Mae and Freddie Mac
Another loan program that might be available for you are teacher loans from Fannie Mae and Freddie Mac. They offer low down payment loans as well. I'm not sure how they treat coming out of a debt management program as at one time Fannie and Freddie didn't like the debt management programs as a responsible thing to do. They have recently changed their position on this, but I'm not sure if they have adjusted every program out there. Make sure that you ask your loan officer about these programs.
I hope this has been helpful and good luck.
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