Any suggestions for my brother? He is 20 and wants to buy a house in IN to get out of IL. The only thing is he is trying to find a job to build up credit and move by may of 2018 .The good thing is atleast he is trying to find a house for 50k or less any ideas I can give him on how to build up credit and be able to get a mortage in 9 months or less.

Prepaid credit card. Pay 50 for a 200 limit. Put your gas on it monthly, and pay it off in full monthly keeping it under a third credit limit. Sign up for a Citibank 2% cash back 4 months later. Do the same for that.

I went from no credit (paid everything cash) to 720 within 12 months.

I would believe it's feasible if he can swing 20% down payment. Otherwise no without established credit. Your brother will have to establish a 3 to 5 years work history and save his money.

I don't want to know what a 50K house would look like.

Most banks aren't going to write a mortgage for $50k, regardless of credit worthiness.

Ed Zachary. The time and red tape a mortgage takes vs the interest they will earn on a 50k loan isn’t worth it to them.

My local little community bank would write that mortgage all day long and not even have to go to the board for approval.

Yes they will. Hell, even the ex did it with low income but she did put 20% down. [house was 39K] No issues at all. It all comes down to if the house value is worth the cost of the loan amount.

When I was in a similar situation I found someone willing to owner finance.  After a few years of that I had my credit worked back up to the point where I could get a traditional mortgage for the balance.

In the country $50k can buy a decent small home on an acre or less of land, or a really nice trailer on a few acres.

Here in Cincinnati it would buy you a dump in between two crack houses.

In NYC its like one months rent.

A big bank won't.  The small community banks local to the property will.  I got one to write me a $20k mortgage for 15 years, paid it off in five.

LOL at the disconnect many people have with the "flyover states". In my neck of the woods, $50k will buy a nice, small, well-kept 2 bd, 1 bath house with a detached 1-car garage... It's not a luxury home, but it's not falling apart either. Heck, my buddy bought a nice little house for $16k a few years ago, it was "livable" but he flipped it to turn a profit... $250k will buy you a 4,000 sf modern home on acreage...

OP, do as was suggested in the first response (I think), get a credit card (will likely have to start with prepaid or cosigned card) and use it every month, and pay it off ever month. Don't carry a large balance on it. Credit isn't built on how much you use (actual dollar value) it's built on the usage ratio, or how much is used compared to how much the credit limit is.

IE, my wife's credit score in in the 840's (850 is as high as it goes). She is joint owner on our house which is significantly paid down (but not below half original loan value yet), and her credit cards we only use for emergency purposes or small purchases occasionally just to keep some activity on them. Her credit usage on credit cards is no more than $200/mo on a combined limit of $15-20k (not sure the exact limits). Utilizing credit this way we were able to buy a 2nd home (2nd mortgage) last year with no hassle from the bank, and she wasn't even working at the time (maternity leave). I won't get into any further details on the 2nd home things as that's getting off-topic. Moderate credit limit with minimal credit utilization is the key to a high score (among the obvious answer of making your payments etc).

This. I didn't think of a prepaid card so I got a Bestbuy  and Walmart credit card with my mom (couldn't get one on my own) and we both made a few purchases of things we 'needed'. I paid them off cash at the end of every month. And any purchases she needed to make she did with my card then she gave me the money to pay for it. Built credit extremely fast using that method. The biggest disservice kids get these days are not being trained how to use money and build credit from a young age. Everyone talks about how bad 'credit cards' and debt are but they never talk about taking advantage of them for cash back, rewards points, and the credit building.

Between my Discover IT and Costco Visa card I get between 1.5-5% cash back rewards on all of my purchases. Doesn't sound like much at all.  But one month out of the year all of my bills except for Mortgage & truck note are paid for by cash-back rewards.  I typically get anywhere from $800-1200 back per year. And I don't pay any interest on my cards because I pay them off every month. My sister gets around $2000 in cash back rewards per year.



Think of it this way. If a local bank told you that if you did your banking through them they'd give you 1000-2000 per year for just using their service you'd probably be all over it. Virtually all major credit card companies have huge incentives (Whether it be rewards points or cashback). But you rarely hear anyone preaching about taking advantage of it. If anything all of the financial guru's talk about how bad credit cards are.




In places where you can get a house for $50K. A bank or mortgage company most certainly will.

I realize if you live in a major city or on the coast that sounds very unrealistic. There are plenty of place where you can buy a house for well under 50K.

Skip all this walk into the local banks and ask.  Smaller bank the better because 50k was the limit for packaging loans for sale as debt.  A friend of mine who was a dentist was denied a 30k personal home with an income of 200k because that bank didn't hold mortgages and it was to small to sell or so he said.  Had to have a wealthy patient buy it and he paid the guy 10% and paid it off in 18 months.

My local bank will lend you 20k on a shack and take chickens for collateral if the appraisal comes in too low.

I bet 30% of the mortgages they write are under 50k in our small town.

Ok maybe small local banks will write mortgages that small. Let’s take this a different direction. He is trying to move to IN and it seems he is on unstable financial footing. Is buying a house there right away a wise thing to do? What if he doesn’t like it there? What if the new job doesn’t work out? I would recommend he rents for a year to determine if that is where he wants to stay and more importantly to let him have time to learn the area and determine where exactly he wants to buy a house. Last thing he needs is to be locked into a house  in a location or job he doesn’t like. Renting long term is a huge waste of money but short term it is often very wise.

Under any circumstances I would never consider buying a house unless I had 20% down, had no other debt, and had a few months of savings socked away in addition to the down payment. Home ownership is great but can be very expensive when shit breaks. You don’t want to be living on the edge when you own a home.

Came to post this.  Not enough $$$ in it...

I was given a mortgage for 53k on my current house from Capital One with putting 20 percent down.  I had no problem getting mortgage quotes from Wells Fargo, the local credit union, and a local mortgage broker.  They even gave me a 30 year note with no prepayment penalty.  I do have established credit and owned a previous house though, but buying a house this time seemed easier than when I did it in 2009.

nevermind, I re-read the OP, I was wrong...