A determined single mom has received the best gift of all. She was able to buy her first home after improving her credit – with help from a credit counselor and home-ownership education programs.
Jacqueline Vaughn had a lot of work ahead of her last week. She needed to assemble the loft beds in her kids’ rooms, organize the kitchen and hook up media components.
But Vaughn was in a great mood. Right before Thanksgiving, she had closed on her very first home — a four-bedroom two-story with a big front porch in Andover.
“This is all new to me,” she said, as she walked to the marble-surround gas fireplace and flipped the switch. “I’ve never had anything like this before, because we’ve always lived in old houses.”
Vaughn was a teenager when she moved with her parents from Texas to Minnesota in 1987. Over the years, she lived with them in homes they owned or rented on the East Side of St. Paul. Most recently she and her three children were renting a small townhouse in St. Paul, still with her parents.
“Now that I had kids, we needed more room, and I wanted them to have their own bedrooms,” she said. “And when you own a house, you don’t have to deal with a landlord.” She had read articles in community newspapers spotlighting people buying homes for the first time. “I thought if they can do it — so can I,” she said.
But Vaughn’s journey to home ownership — from getting pre-approved for a mortgage to turning the key to her own front door — was complicated by financial obstacles, including a bankruptcy. Vaughn discovered she couldn’t qualify for a mortgage from local lenders because of her bad credit history. “I had too much debt on my credit cards and not enough income,” said Vaughn, a Metro Transit bus driver. “That’s how I got in trouble.”
After doing research, she decided that filing Chapter 7 bankruptcy in spring 2011 was her best option, since she had no assets and couldn’t make the monthly credit-card payments. “It wiped out my debt and gave me a fresh start,” she said.
Vaughn had to wait a minimum of two years after the bankruptcy was discharged before applying for a home mortgage. During that two years, she focused on her No. 1 mission: rebuilding her credit and ultimately buying her own home.
A few months later, the Minnesota Homeownership Center connected Vaughn with Jocelyn Sweet, a senior housing counselor for Community Neighborhood Housing Services in St. Paul, for free credit-counseling sessions.
First Vaughn completed a daylong Home Stretch homebuyer workshop taught by Sweet. “She really was serious about buying a home and getting her spending under control,” said Sweet. She met with Vaughn or e-mailed her several times a year. Vaughn learned how to manage bills, saving strategies and smart ways to use credit cards to raise her credit score. Sweet also created a spending plan for her and regularly checked her credit progress — as well as offering encouragement. “We tell people to visualize their dream, and we’ll break it up in small steps to reach it,” said Sweet.
Vaughn was able to nearly double her income by working many hours of overtime as a Metro Transit driver in the St. Paul/Maplewood area. “People at work called me the overtime queen,” she said. With the higher monthly earnings, she was able to save for a home down payment, too. “My goal was to put $15,000 down,” said Vaughn.
By this past September, Vaughn had dramatically improved her credit, and she met with Todd Williams, a loan officer at Wintrust Mortgage in Eagan. He advised her how to raise her credit score to 640, so she could qualify for a mortgage.
“I was so excited when I opened the letter that said I was pre-approved for a mortgage,” she said. “I kept reading it over and over because I couldn’t believe it.”
Finally, Vaughn could hunt for a house where she could raise her children, Tyra, Jordan and Tyler. Since she worked near St. Paul, and her parents lived there, she focused on newer homes with four bedrooms on the second floor, a finished basement and a big yard, in suburbs such as Woodbury, Maplewood and Cottage Grove.
She toured 30 homes, but not one had the right combination of everything on her wish list. So Vaughn expanded her search farther west. She found a listing for the suburban Andover home, which was built in 2001. “I’d never heard of Andover,” she said.
When she stepped inside the vaulted foyer and saw the oak woodwork and Tuscan columns at the dining-room entrance, Vaughn had a good feeling about the house. It boasted a large granite island in the kitchen and a wooded back yard, plus her children would have their own bedrooms. But the clincher was the big finished walkout basement.
“There was room for my quilting machine,” Vaughn. said.
The home had everything she wanted, so Vaughn was willing to compromise on the location. She made an offer that day and bought the house for $354,900, putting down $13,000 of her hard-earned savings.