I'm looking to purchase a home in about 6 months. I've been lurking around this board and using the info to try to position myself as best as possible to make the purchase. I figured I'd post and see if anyone has any other advice on anything I should change/fix since I have a little time to try and fix anything. Below is the "can I qualify info":
Credit. MyFico 744, Credit Karma: 735, Credit Sesame: 729 No Negatives on CR.
Source of income. All from salary
Monthly debt payments. Student Loans: $450, Credit Card $100 (No car payment - that'll come after the house)
Employment (for those who are employed). Recently graduated from college and straight into FT job. Will be about 1.5 years when I'm looking buy.
Assets/Reserves. Savings: 20k (around 30k when looking to buy), 401k: 10k
Location. Portland, OR
Property. Will be looking for single family house
Value. Will be looking for something in the $250k ballpark.
Occupancy. Primary residence.
Transaction Type. Purchase, thinking FHA
A few questions:
On credit cards, I'm currently at 27% utilization, but plan on being at around 15% at my purchase time frame. Most of my money is going into saving for a down, but I could use some of it to fully pay off a couple of student loans and credit cards. Should I do that to lower the monthly DTI (and get a better score)?
I won't have the full 2 years on job, but did graduate straight into employment and have been here since. How big of an issue will this be? Would it be better to wait the extra 6 months to get a full 2 years?
I'm leaning towards FHA, since I don't have the full 20% and reserves. Is a conventional an option or is FHA the best/only choice?
Any other input or advice is appreciated. Thanks.
If you want the really great rates that you see advertised, you'll need a 760 score. By paying off the plastic, you can achieve this. Additionally by using USDA money, you can qualify for ZERO down as a first time buyer.
I would strongly consider going conventional. FHA loans sound great but after the chips fall you are paying upfront fees and monthly fees that really add up over the first 5 years.
Yeah but you can pay those fee's up front and your still going to pay PMI if you go conventional if you have less than 20% down, you could do a conventional with 10% down and buy points to lower your rate with out the hassle of all the FHA fees. Keep in mind that you can ask sellers to pay those fees for you.