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Game Plan: High FICO, Decent Income, Little Savings

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CalAlumnus13
Contributor

Game Plan: High FICO, Decent Income, Little Savings

As you can see from my signature, I've been active on the credit card end of things. I'm just now starting to explore the possibility of buying a home. I'm trying to decide on a game plan.

 

Some info:

Personal: 27, single, college degree

Job: Employed by state government, salary of $57,000

FICOs: 770-790. Should go higher as HPs age and fall off. No negatives.

Current housing: Rent a studio, $650/mo

Savings toward down payment: Zilch. Been using extra funds ($1,000/mo) to pay off student-related debt.

Debt: $10,000 auto, $8,000 student

Expected home purchase price: $180k-$200k (near Sacramento, CA)

 

As I see it, I have two main options:

1) Do it ASAP, with 3-5% down. Pay extra to get up to 80% LTV as soon as possible to remove PMI.

2) Wait until I have 20% down (3-4 years).

 

Any suggestions for someone in my situation? Feel free to direct me to any related threads. I've looked around a bit, but a lot of discussion seems to be around people with lower FICO scores trying to get a mortgage at any cost. I'm more interested in making the optimal decision, factoring in both financial factors as well as the personal satisfaction of owning a home.

FICOs: EX (per Amex, 1/20/18): 830 | TU (per Discover, 1/20/18): 817

Wallet: Discover It $35.5k | Amex EveryDay $25k | Chase Freedom Unlimited $19.5k | Chase Freedom $8.5k | Chase Sapphire Preferred $8.5k | Amex BCE $7.7k

Drawer: Hella More
Message 1 of 8
7 REPLIES 7
sports1965
Frequent Contributor

Re: Game Plan: High FICO, Decent Income, Little Savings

how do u plal on buying now if u dont have money for downpayment + closing costs?

Message 2 of 8
Anonymous
Not applicable

Re: Game Plan: High FICO, Decent Income, Little Savings

With your down payment, FHA would probably be the way to go.  But you would have PMI and it is mandatory here in FL for 5 years unless you refinance.  With your salary & expenses, you could probably start hoarding some funds away quickly.   Assuming it's just you there.  We were putting off an equity loan for a pool until July but looks like the interest rates will be on the rise.  With your scores, not having much money down shouldn't be a problem.  Not sure how you plan on paying closing costs? If you feel comfortable with owning a home now, go for it.  Make sure you have a little $$ put away just in case. Smiley Wink

Message 3 of 8
sports1965
Frequent Contributor

Re: Game Plan: High FICO, Decent Income, Little Savings


@Anonymous wrote:

With your down payment, FHA would probably be the way to go.  But you would have PMI and it is mandatory here in FL for 5 years unless you refinance.  With your salary & expenses, you could probably start hoarding some funds away quickly.   Assuming it's just you there.  We were putting off an equity loan for a pool until July but looks like the interest rates will be on the rise.  With your scores, not having much money down shouldn't be a problem.  Not sure how you plan on paying closing costs? If you feel comfortable with owning a home now, go for it.  Make sure you have a little $$ put away just in case. Smiley Wink


mandatory for 5 years?

its for the life of the loam my friend unless u put 10% down,then it drops after 11 years

Message 4 of 8
Lemmus
Established Contributor

Re: Game Plan: High FICO, Decent Income, Little Savings

...have you looked at USDA eligible properties in the Sacremento area? ...if you're willing to commute there are large eligible areas there ...and you appear to be the design candidate for the USDA Guaranteed loan program ...no dp and closing costs included in the loan ...you could easily own a nice home in a matter of weeks based on your info ...hth


Helpful Links: Do I Qualify? | Mortgage Calculator | USDA Mortgages | Opt Out | FICO Versions
Last HP: 11/04/15 | myFico 3B Jun 10 '15:FICO8 EQ - 752 | TU - 763 | EX - 750
Message 5 of 8
Anonymous
Not applicable

Re: Game Plan: High FICO, Decent Income, Little Savings

Cal put this out-

 

"1) Do it ASAP, with 3-5% down. Pay extra to get up to 80% LTV as soon as possible to remove PMI."

 

Thats what I'd do.

 

Get in a house, build equity, and weigh options down the road when you feel its time to upgrade.

Message 6 of 8
Anonymous
Not applicable

Re: Game Plan: High FICO, Decent Income, Little Savings

If you want to buy sooner than later, save that $1k you're putting towards your student loans. Are they higher interest than your auto loan? If not, you're kinda wasting money. In any case, your accelerated payments aren't going to affect your monthly payments so this gives you no DTI improvements. You sore is high enough that the lower loan balance likely won't bump your score too much.

 

Personally, I'd save now and buy short term with FHA. But I have life events that motivate buying a house now. You may want to crunch the numbers on how much you'd save conventional vs FAN and consider if it's worth it to you to wait several years.

 

@CalAlumnus13 wrote:

As you can see from my signature, I've been active on the credit card end of things. I'm just now starting to explore the possibility of buying a home. I'm trying to decide on a game plan.

 

Some info:

Personal: 27, single, college degree

Job: Employed by state government, salary of $57,000

FICOs: 770-790. Should go higher as HPs age and fall off. No negatives.

Current housing: Rent a studio, $650/mo

Savings toward down payment: Zilch. Been using extra funds ($1,000/mo) to pay off student-related debt.

Debt: $10,000 auto, $8,000 student

Expected home purchase price: $180k-$200k (near Sacramento, CA)

 

As I see it, I have two main options:

1) Do it ASAP, with 3-5% down. Pay extra to get up to 80% LTV as soon as possible to remove PMI.

2) Wait until I have 20% down (3-4 years).

 

Any suggestions for someone in my situation? Feel free to direct me to any related threads. I've looked around a bit, but a lot of discussion seems to be around people with lower FICO scores trying to get a mortgage at any cost. I'm more interested in making the optimal decision, factoring in both financial factors as well as the personal satisfaction of owning a home.

 

Message 7 of 8
Anonymous
Not applicable

Re: Game Plan: High FICO, Decent Income, Little Savings


@Anonymous wrote:

Cal put this out-

 

"1) Do it ASAP, with 3-5% down. Pay extra to get up to 80% LTV as soon as possible to remove PMI."

 

Thats what I'd do.

 

Get in a house, build equity, and weigh options down the road when you feel its time to upgrade.


I agree with Bama. If you buy now, you may have enough equity in a couple of years to be at 80% LTV without even having to pay anything extra. Cal, have you worked with a lender yet? You are in my neck of the woods, and I would love to help you out. Let me know!

Message 8 of 8
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