New to purchasing a house!

[SMikulski49]

Hey guys, my fiancée and I are getting married in June. After that we would like to slowly start looking at houses and see if we like any neighborhoods in the area. We live in northeast PA. I am new to buying houses so I would appreciate any pointers in regards to credit profile, and anything else you might think is useful. We are not set to buy anything now, just looking to see what the options are.

Little about us: I am 32 and my fiancée is 28. The only debt we currently have is my car ($1500 left on it and will pay it off in the next two or three months) and her lease which she started few months ago for 3 years. Both of us started new jobs November of last year. My credit scores are all above 800 and hers are all between 770 and 800. I have a good mix of credit on my profile like car loans, personal loan, student loans, credit cards. She has Credit cards, student loans, and now a car lease. 

1. What should our credit profiles contain? What are banks looking for?
2. How long should we be at our current jobs? Does it matter?
3. How much money should we have saved up?
4. What % should we have ready for down payment?
5. Are there options to buy with no down payment?
6. Any government programs?
7. What should the ration of our mortgage be compared to our income?
8. What are other common mistakes people do or what should we avoid?

Here are just a few questions I have but I’m sure there are other things to consider. I just want to start looking at future and get ready so I am not missing anything when we find our house and are ready to buy.

[Anonymous]

Hey guys, my fiancée and I are getting married in June. After that we would like to slowly start looking at houses and see if we like any neighborhoods in the area. We live in northeast PA. I am new to buying houses so I would appreciate any pointers in regards to credit profile, and anything else you might think is useful. We are not set to buy anything now, just looking to see what the options are.

Little about us: I am 32 and my fiancée is 28. The only debt we currently have is my car ($1500 left on it and will pay it off in the next two or three months) and her lease which she started few months ago for 3 years. Both of us started new jobs November of last year. My credit scores are all above 800 and hers are all between 770 and 800. I have a good mix of credit on my profile like car loans, personal loan, student loans, credit cards. She has Credit cards, student loans, and now a car lease. 

1. What should our credit profiles contain? What are banks looking for? The mix of your credit profile doesn't really matter as long as your scores are good.
2. How long should we be at our current jobs? Does it matter? 30 days.  Just have to show a 2 year history.
3. How much money should we have saved up? Depends on the purchase price of home.
4. What % should we have ready for down payment? Minimum 3.5% of purchase price
5. Are there options to buy with no down payment? VA or USDA can do no down payment
6. Any government programs? VA, FHA, USDA
7. What should the ration of our mortgage be compared to our income? Just to be safe 30%.  You can probably go higher but just be conservative.
8. What are other common mistakes people do or what should we avoid?

Here are just a few questions I have but I’m sure there are other things to consider. I just want to start looking at future and get ready so I am not missing anything when we find our house and are ready to buy.

Sounds like your scores would be good enough to get a good rate going conventional but you would need 5% down.  If neither of you are a veteran then I would look at FHA and Conventional to see what would be the best payment option for you all.

[SMikulski49]

Thanks this really puts things in perspective for me. I am now doing more research on the conventional and FHA and see what the differences are. I think we should be in good shape when we decide to get a house. Do you recommand getting a 15 or 30 year mortgage? What are some benefits of both?

[Anonymous]

If you are comfortable with a 15 yr payment I would go with that just because more of your monthly payment is going towards your principle balance.  You will pay less interest and have a lower interest rate on a 15 yr.  

If you go with a 30 yr then you all would be able to qualify for a larger loan amount since the payments will be cheaper.  It really just depends on your situation and how much you all qualify for on a 30 yr and a 15 yr.  If you all can find a home you like and your debt to income ratio allows for the 15 yr then I would choos that.  If you need to borrow more for the house you like then the 30 yr would be a great option.  

[SMikulski49]

Got ya. Currently our income is 80K and 70K. I just paid off that car I mentioned above so the only debt we will have is my fiancees car payment of 250 a month. After the wedding and honeymoon expenses we will go into savings mode and try to save up for a bigger downpayment.