Better Than I Thought!

So, all of our hard work and efforts paid off!  Our credit jumped up.  Our debt to income ratio is right where I wanted it at the time being.  AND, we can qualify for more than we originally thought we would.

A dear cousin, Kari, has been giving Travis and I advice about building our credit and paying off our debts so that we can own a home.  The woman is a genius.  I am so totally clueless about this homebuying stuff.  However, Travis and Kari were on the same page the whole time, and they explained things to me in more simpler terms so that I could understand.  There were so many things I learned, I was amazed!

Kari pulled our credit reports and gave us an updated, accurate credit score for each of us.  She sat down with both of us and went through every page on our credit report, telling us what lenders look for.  She pointed out areas that we could fix, and she pointed out areas where we should leave things alone!  I was surprised that there was one thing on our credit report that she told us NOT to touch until after we buy a home.  If we messed with it, it could potentially hurt us because of when it will be reported - and she explained why it would negatively impact us.  This one thing was a collections account.  This debt was actually paid through the hospital between 2008 and 2011.  However, it was not updated on our credit report.  Even though that debt technically does not exist, the agency did not report it to the credit bureaus.  It is not hitting our credit negatively to leave it alone the way it is.  At first, I thought "OMG, that needs to be taken off!"  But Kari explained to me the moment that there is any activity on the account, it will come across as a negative impact on our credit and bring our credit scores down.  She told us to wait until after we buy a home to update it.

Kari also told us where we can dispute things on our credit report.  She told us the best places to talk to in order to handle credit disputes.  There was ONE medical bill that we paid off that had not been reported to the credit bureau.  Unfortunately, because we paid it, it's possible it will bring down our credit score.  But oh well, live and learn.  It'll be ok.  When Kari looked at our previous debts and saw that everything had been paid off completely, she told us we did everything right.  That was a relief to hear!  I was worried that I was messing up.  Kari reassured me that we are not in a terrible position, and because we have a good record of debts being paid in full - even though our credit scores weren't as high as I had wanted them to be - that will look more favorable because it shows we pay off our debts.

She ran our numbers through a program to see how interest rates would fluctuate between FHA and Conventional loans.  She showed us every possible outcome.  She told us the pros and cons for each type, and how they would affect us.  Ironically, where we are, monthly payments won't be much different for either type of loan.  When going through the possible outcomes and different costs of a home and calculating a different percentage for a down payment, we were looking at possibly a $7 - $30 monthly difference between the two.

She asked us if we had been searching for a home at all lately.  I told her one house in the neighborhood we live in that I have had my eye on.  She ran the numbers for both types of loans with the amount the house was selling for and she took taxes into consideration.  This is where I was super surprised.  A Conventional loan was $7/month more than an FHA, but it was also more than likely a better option for us.  Then, we took another home into consideration.  An FHA was a better option for us on that one!  I was really surprised how minor adjustments made a HUGE difference!

After going through adjustments and comparisons, Kari told us that we were "finance-able" where we currently are.  She told us that we could qualify for much more than we originally thought.  Granted, we told her that we were looking for a lower cost home and wouldn't mind doing repairs.  This one really surprised me:  she told us that with where we stand, we should NOT get a house less than $50,000 because insurance and interest would not work in our favor.  The lowest we can look for a house is currently $54,000 without getting hit with huge insurance costs and higher interest rates.  I never thought there would be a minimum amount for getting a better deal.  If you go too low compared to what you qualify for, the bank won't see it as a loan being worth it - and we could potentially get denied because - well - it isn't worth it to invest in that much with where we are.  Interesting....

Again, these were all "approximate" and fairly accurate simulations, but it let us know where we currently stand on getting a home.  Worst case scenario, Travis and I will be home owners in July of this year.  If we continue doing what we are doing, handle a few minor adjustments on our credit reports, we could be homeowners by March!  AHHH!!!

Kari then calculated taxes, down payment, closing costs, appraisal costs, fees, etc. and gave us a total that we need to save for.  It's more or less a "goal" amount for the least that we should save for, and we need to save up that amount and keep it untouched for 2 months.  Only small additions, like $20 or $50 from a paycheck that is easily traced, can go into the savings.

Kari is going to run a few more simulations with another program with a lender.  This is going to tell us where we could be in 3 months up to 6 months.  Kari is going to see how long we should wait to get the best deals, without having to wait forever and not move forward on buying a home this year.  The lender is also going to talk to her about our credit report and give advice on what she would like to see us do before she'd be willing to approve us for certain amounts.  Basically, a lender is telling us what we should do in order to get our credit scores up higher in a short time frame and also what is going to work in our favor this year.

I cannot tell you just how relieved I am!  Travis and I left there feeling so proud of our accomplishments and determined to do whatever we need to in order to put ourselves in an even better position.

Not going to lie, this homebuying process still looks like Greek to me.  But I am glad that I have Kari to hold my hand and mentor me through the process.  Travis is on the same page with Kari - so it makes me feel better knowing that he understands this more than I do.

Here we are... step number 1 towards buying a house is accomplished.  Now on to step 2!

Time Got Away from Me.

So much is going on!  I am so sorry I left ya'll behind!  I'm going to update you on EVERYTHING! :)

My husband received a promotion at his job!  It is now a typical 9-5 job.  He has more responsibility at the business.  I am so proud of him!  On top of this 9-5 job, he is also working with me at a burger joint called Five Guys Burgers and Fries.  That's right.  We both picked up a second job and are working together!  It's a lot of fun, and our bosses like us.  Hard work pays off.

As for me, I am pulling 18 credit hours this semester.  I was able to receive grants and aid to cover my education costs.  I will be walking in the graduation ceremony this December, however I won't actually be finished with my degree until May 2012.  Since I am doing 18 credit hours this semester, I barely have time for fun.  But the sacrifice is so worth it.  I only have 4 credit hours once this semester is over - and those 4 credits are dedicated to an internship.  It seems absolutely crazy, and honestly, my life is so hectic.  However, in the long run, it is going to be cheaper than doing 12 credit hours this semester and 10 credit hours next.  Plus, next semester, I'll only be doing 20 hours a week for the internship.  The rest of my time will be dedicated to a work study position that is 10 hours a week, and a remaining 10-20 hours a week for my part-time job at Five Guys.  It's doable.  It's stressful, but it's going to be so worth it.

Right now, I'm always doing homework, I'm always in class or at work, and I have to say "no" to many of the invitations friends give me.  So many friends and family members will beg, guilt trip me, or try to persuade me into thinking I deserve time off.  My only response is, "my time off will be paid back to me in due time."  Right now, looking at all the bills and having graduation so close I can taste it, I don't want "time off."  I want to push harder.  I have more drive, more motivation.  I'll get up some days and dread being busy for 13-15 hours.  But I look at how much all this work is going to pay me back in due time.  I'll drag my feet to make it to class or to whine about writing papers every week, but in the end, I do it with vigor and passion.  I don't half-ass (excuse the language) anything because this is not just what I need, I have everything I really need; this is what I want, and that's what makes the difference.

Unfortunately, we were not able to sell the car.  We still have it with a "For Sale" sign on it, but no one is interested.  Husband turned the car on and found out the brake line had broken.  We've still put up a Craigslist ad for it, but no one has been interested in it.  If no one buys it, we're selling it for scrap parts.

GOOD NEWS THOUGH!

We're paying off our debts completely!  Woo hoo!!  I am super excited about it!  We've also paid off the remaining amount required for my student loans.  It is now officially in deferment until 3 months after graduation.  So far, as it looks, we should have 2 more debts completely paid off by 2012!  We have also added to our emergency fund!  This gives me such motivation to keep on keepin' on!

So right now:
- Emergency fund $123.91
- Husband's Promptcare Lab bill Paid off as of Sept. 1, 2011
- Sallie Mae $150 bill for deferment Paid off as of Sept. 1, 2011
- Direct Loans $323.74 bill Paid off as of Sept. 14, 2011
- Unity Physician's bill Currently $904 remaining
- Dr. Greene bill Currently $540 remaining
- SIRA radiology bill Currently $325 remaining
- Capital One credit card Currently $492.12 remaining
- Credit One credit card Currently $306 remaining

Where We Were...

Just to give a few people an idea of where we are coming from, I decided I would fill you in on the number crunch.  I'm not lying when I say we used all of our money to pay debt.  I've had a few people come up to me and say, "Oh, you think you have it bad..." and then proceed to tell me their negative numbers.  I'm not trying to belittle anyone.  I know this economy is really hurting people.  But we didn't just blow our money like I've seen some people do.  I know this sounds harsh, but I don't want to hear woe-me stories about debt when those people are doing literally nothing about it (other than blowing their paychecks on videogames, booze, strip clubs, and night clubs).  Then, they want to come up to me and tell me how I don't know what I'm doing when it comes to finances.  So, kiddos, I'm going to lay it out there and show you the numbers.

I'm only going to focus on medical bills and credit cards.  You'll get the picture.  Our rent is average, our utilities are very conservative (especially since water/sewage/trash/recycling is all included in our rent), and the only reason why we are in debt in the first place was because of medical expenses.  Our medical expenses forced us to use credit cards (which is stupid, don't do it unless you know you can pay off the credit card!).  I'm not going to include my student loans.  Why?  Because I believe you can't put a price on education.  Yes, I'll be paying it back - but paying back my student loans won't be nearly as difficult if we take care of our current debt.

Currently, these are the medical bills we're paying off:

• IU Health (when hubby had meningitis, it's the final bill):  min. $50/month = $175 remaining
• Radiologists (SIRA):  min. $20/mon = $405 total
• Dr. Greene's office:  min. $20/mon = $620 remaining
• Unity Physicians:  min. $120/mon = $2707 total

Currently, these are our credit cards (GASP - we only have 2!):

• Credit One:  min. $25/mon = $306 total
• Capital One:  min. $15/mon = $500 total

We are currently LOW income.  When I say low, I mean $1600/month income.  But this is me going to school full time, working only 16 hours a week (because that's all they can give right now), and my husband literally just got his job back after being laid off and is starting back this week.  I'm currently getting everything situated for my senior year in college, and I am looking into work study as well.  I'm still looking for a second part-time job, too.  

So, with our current expenses and our current income - it sounds doable, right?  We should be saving money!  No.  That's not correct.  We just started this income this week!  My husband was laid off for about 4 months!  I couldn't work up until April.  And when I could work, I spent the next 3 months looking for a job.  Economy is tough, ya'll.  So, you can imagine with no income, how hard that was.  Luckily, there were food pantries, generous family members willing to help because they understood our situation, and we used ALL of the money we ever saved to survive that difficult time.  Saving what we did prior was our emergency fund.  An emergency fund goes quickly.  I'm glad we had it when we needed it.

But here's something else.  We paid off a lot of debt.  How much?

• IU Health grand total:  $21,507.87
• Unity Physicians total: $1803.00
• Radiologists (SIRA) total:  $1065.00
• Pathologists total:  $165.00 (and we are expecting reimbursement of $27.50)

We paid off a total of $24,155.87 in 2 years.  Before I got ill, I worked.  I would work as many shifts as I could and I even pulled overtime.  But from November 22, 2010 until April 15, 2011, I could not because doctor's ordered me not to and for 3 months of that time, I was strictly bedridden - only permission to use the restroom.  And my husband worked a lot, pulled overtime, and did whatever he could.  We struggled for 2 years to pay off that amount.  That is not even including the bills family members contributed towards.  It costs a lot of money to save your life - and not all treatments are covered under insurance plans.

Paying off debt is possible.  We've done it - and we know there are sacrifices to be made.  But I definitely don't like someone telling me that I don't know what I'm doing, or that I'm following a cult because we're following Dave Ramsey's plan.  Maybe why so many people follow him is because it freaking works.

For all the other penny pinchers out there - stand your ground.  You aren't crazy!  I know it is possible.  We survived... literally.