Hey guys and gals! I've been lurking on the forums for awhile now trying to learn everything I can. I figured I should join in and see if any of you have any advice for my specific situation. I appreciate you taking the time to read this and respond.
In 2006 I bought a condo with my ex-fiance when the market was crazy expensive. Things did not work out between us and I ended up moving out of said condo shortly after we got the keys. Life lesson, don't buy a house with someone you aren't married to. I was the one who moved out because I could not afford the mortgage by myself and she could, with the help of her parents anyway. Unfortunately for me, her an her parents were the reason we acquired to condo to begin with. I pretty much just signed papers and they handled setting everything up through the mortgage process. I know, I was stupid not to learn and understand the process. Another life lesson learned the hard way.
After I moved out, I met my now wife and everything was good. In 2009/2010 my ex fiance informed me she had some medical issues and could no longer afford the condo either. I was already living with my wife and paying rent somewhere else. Even if I could have broken my rent lease, I still couldn't have afforded the mortgage for the condo. I live in San Diego which isn't exactly cheap. I think the mortgage was around $2400 or so. We tried working with Bank Of America, but did not have much luck. My ex and I stopped paying anything on the condo and figured BoA would foreclose it since they had turned down our other attempts at a short sale. Fast forward 37 missed payments later, BoA finally agreed to a short sale. The short sale shows closed on my credit report as of Sept 30 2012 and has been reported as settled for less than owed. I was bummed about the short sale because I had/have never missed a payment on anything in my life, but unfortunately the short sale was a necessary evil to move beyond that part of my life.
So fast forward to now....My wife and I have 2 kids and are sick of renting. My 3 years post short sale will be up in Sept this year. Right now I am working on paying off credit cards and saving for a down payment. Our goal is to be able to start the whole pre-qualified process in the first quarter of 2016. I am a little concerned about our DTI. Like I said before, the only bad thing I have on my credit report is the short sale. I have never missed a payment on anything. My wife does not have anything negative on her report and obviously was not part of the short sale and has never owned a home.
Here are our numbers for DTI:
Our combined gross monthly income is about $9,000. Probably a little higher, but I would rather aim low to be safe. $7,500 of that is from me, if that matters. I have been at my job for a little over 10 years and my wife has been at hers for about 2 years.
We have two car payments:
$550 an $680 for a total of $1,230. This is my biggest concern.
I have pretty much paid off all of my credit cards. I left about $300 dollars just to have a balance. My UTI is pretty low. My available credit is around $20k.
My wife has one credit card on her own with about $10,000 balance on it. Her credit limit on that card is 22K. I have been working extra and I should have this down to $4-5k by the end of July. I should have it under $1000 by October. After I get her card low enough, I will start putting all the extra money I was putting towards her card into savings for a down payment. Minum payment as the card currently sits is $225.
Neither of us have any student loans or any other debts.
I have not run my credit numbers in awhile. Credit Karma has both of our credit scores in the 750 range, I know I should take that with a grain of salt. The credit tracker on my Cap One credit card shows my score around 700. Again, not the most reliable numbers. I have no idea what my mortgage score is. I was kinda waiting until the three year mark from the short sale to check it. Should I do it sooner?
My main question is, even if I paid my wife's cc down to a very low level, would we still have a hard time getting approved for a loan through FHA with the car payments we have? Unfortunately we would need a loan between $350-400k just to be on the bottom end of home prices in north county San Diego. I have entertained the idea of trying to get out of the more expensive car loan, but that would probably take some money and also it would require opening up and other auto loan.
I hope I covered most things needed to give me your input. Let me know if I missed anything. Again, thank you for anyone who takes the time to read this and respond.
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