My wife and I have spent the last year paying off various credit card debts, etc and are looking towards buying a house in the Oct 2014 timeframe. We still have some work to do saving money and paying down the remaining cards, but by September, we should have around $18k saved and only about $1k in credit card debt left, no car payment.
My current scores are around 700, I expect them to be closer to 720 by the time we start looking, hers are very similar. We make about $160k combined and will have only $130 / mo in debt payments.
I'm wondering if this puts us in the territory of being able to qualify for a 5% down conventional loan. I'd like to shoot for a house around $300k in NC.
I know there is no way to say for sure, but I want to make sure I'm setting reasonable expectations, and if not, what should I be changing to more realistically align my goals.
Yes you will easily qualify for a 5% down conventional loan
Keep working on the credit the higher the scores the better your mortgage insurance will be
I have been telling my buyers to use $7.50 per $1k mortgage to estimate monthly PITI [Principal, Interest, Taxes, Insurance]. That gets you in the right ballbark. Then take that payment and divide it by your gross monthly income to get your estimated qualifying ratios. Add all of your other debt payments to it before dividing and you'll get an estimate for your other qualifying ratio. That's all yu need to figure out what you can qualify for and what you will feel comfortable buying ... they are not always one and the same.
All the best with your home search.