<prompt> Human: Details:Gross Monthly Income: 6200Monthly Payments Credit, Car, Student Loans: 1000Both our credit scores around 630. Shitty credit due to stupid choices with little credit charge offs and late payments, nothing big like foreclosure or bankruptcy. Last year weve put in an effort to clean things up and our scores are climbing finally. Live in Pittsburgh, PA with 2 children and a bird. 3 years rental history paying 1100 monthly, never late, have a good reference from landlord. I am in my 1st year of a 6 year PHD program, fully funded, but I can still use up to 20K per year of loan if I need to. Questions:Does it sound like wed qualify for an FHA loan? Could we use some of my student loan disbursement for a down payment?Do they factor in the amount of student loans, or just the amount that we pay on them my husband has about 90k worth but only has to pay 200 per month?What could we do to give us better chances?Any tipsinfo would be greatly appreciated. We are very nervous to take this step, especially to go in and have them laugh us out the door. Assistant: This sounds like a really bad idea. Do you have emergency savings? a down payment? How would you pay for a new AC or heating system or water heater if the one in your new house broke a month after you moved in? I mean, youre scraping by on the credit scores but even then you may not qualify if two of the bureaus have your score lower than what you think. But nothing here suggests that you are ready for home ownership. Maybe look through the prime directive in the sidebar and see what you need to do to get ready to buy a house in the next year or two. Human: Thank you for your response!Im curious why you think it would be a bad idea aside from my question if wed qualify or not? We are currently paying 1100 for rent and have been for the past 3 years with no problems. 1100 for the next 5 years 66,000 dollars that wed have nothing to show for. If we can manage to get a loan for something small for the next 5 years we could have over 50,000 into a home of our own. We understand there are costs associated with buying vs. renting, but we dont plan to buy out of our means.Assistant: 1100 for the next 5 years 66,000 dollars that wed have nothing to show for. If we can manage to get a loan for something small for the next 5 years we could have over 50,000 into a home of our own.Thats not how home loans work. The majority of your monthly payment goes towards interest, taxes, insurance and PMI. On top of that, rent covers repairs and maintenance, mortgage doesnt. There is also closing costs as well as realtor fees if you sell it. Youre way overestimating how much equity you actually build in a house, particularly in the first 5 years.Human: I dont mean to say that wed have that much in equity, but wed have 55,000 into our own home. That means something to us. 66,000 for nothing more than a roof over our head and the peace of mind that we dont have to spend a thousand dollars on a water heater seems a bit steep. Do you think it would be a bad idea just because we wouldnt build as much equity as wed lose in renting for 5 years?Assistant: Do you think it would be a bad idea just because we wouldnt build as much equity as wed lose in renting for 5 years?Its a bad idea because youre not ready to buy a house. Your credit sucks. You have next to nothing for a down payment, so any downturn in the market would leave you underwater. You have no money for any major repairs. Youre kidding yourself if you see 1k for a water heater is representative of what you may end up spending in repairs. Youre factoring in future income. There is a decent chance youll end up wanting to move in a few years. Basically, youre assuming everything is going to go right, because any moderately significant bad event to you or the economy can leave you in dire straits.Home ownership is for people who are ready to buy a house, not for people that are tired of renting.Human: I appreciate the straight forward responses. Your credit sucks I accept this, and understand this is what an FHA loan is all about. You have next to nothing for a down payment Yes, and this is what the question about the loan was intended for. We could use my loan and have a down payment immediately to expedite the buying process, or wait until the spring when we will officially have the down payment and more. Simply a question of whether they would allow it or not. Youre kidding yourself if you see 1k for a water heater... weve lived in this home for the past 3 years and my husband has done all of the repairs to save on our rent costs. He is capable to repair and aware of the costs to keep a home in functioning order. This wasnt info I originally gave for simplicity sake. Youre factoring future income No, were buying on the money we have and make now, when the income is more, we plan to just pay more into the house and have more security. If we cant get into a loan now, we obviously will wait until the circumstances change and go from there. Any moderately significant bad event... You are right about this. But help me understand how things would be worse because were in a home paying a mortgage to the bank or if were renting a home from a landlord? Bad events will happen, and we have built an emergency fund for this exact thing, but if the event is bad enough, wouldnt we be on our back either way? This is a serious question and not meant to sound snappy. I hate text for that reason. I guess I wonder what are people who are ready to buy a house? What is the point of an FHA loan if not for someone like us? We dont have the best credit. We also dont have the worst credit. We dont have a massive down payment, so Ill pay other fees because of that. I know the perfect scenario for home ownership, and we arent that. But from what Ive read this program is made for people like us. People who have made mistakes but are ready to be responsible and get into a home of their own. With all this info, would you still consider it a bad idea? And I am serious, again, not trying to be bratty. Maybe you wouldnt do it if you were in my shoes, I can accept that not everyone would. But is it a bad idea in the end, or just something you wouldnt recommend because of the inerrant risks?I appreciate your taking the time to have a conversation with me. It means a lot and will really help in our decision.  <response>: Simply a question of whether they would allow it or not.We could use my loan and have a down payment immediately to expedite the buying process, or wait until the spring when we will officially have the down payment and more. Simply a question of whether they would allow it or not.Lenders expect down payment money to be money that you actually have, not money that you borrowed. FHA is even more stringent on that.weve lived in this home for the past 3 years and my husband has done all of the repairs to save on our rent costs. He is capable to repair and aware of the costs to keep a home in functioning order. This wasnt info I originally gave for simplicity sake.Is he a general contractor? Has he done any major repairs, like re-tiling a roof, replacing an HVAC unit, or replaced framing with dry rot? Small maintenance items arent really the issue, its the big stuff that can really cause problems.If we cant get into a loan nowYou shouldnt be equating getting a loan to being able to afford a home. Lenders only care about your likelihood of defaulting. They dont care if you have to pull from your retirement, or live on beans and rice to cover your mortgage. Being able to afford a home means being able to make the payments, meet all other financial obligations, have some breathing room, and be able to whether the bad times when they come.But help me understand how things would be worse because were in a home paying a mortgage to the bank or if were renting a home from a landlord? Bad events will happen, and we have built an emergency fund for this exact thing, but if the event is bad enough, wouldnt we be on our back either way?What bad events are you imagining here? Im not talking like a car breaking down or a costly medical emergency. Im talking about job loss, market downturn, etc. If you need to move andor reduce expenses, its a lot easier to do it when youre renting than when you own a home.What is the point of an FHA loan if not for someone like us?This kind of goes back to the thing about lenders not caring. The government is the same way, they dont care about you specifically. They care that people continuing to buy and sell houses because its good for the economy.Im not saying you should wait until the perfect scenario. rpf is much more risk averse than most people, myself included. Im saying in a year, when your husbands income doubles, your credit has improved, and youre able to save up money for a conventional loan, youll be in a far better place than you are now. 