another first time home buyer couple

[Anonymous]

Ok, here is a little background....just married in May.  We are looking into buying our first home together, if all works out sometime this fall before the December 1st deadline.   I'm 28, she is 22 so credit is a little limited.  We have some credit card debt that can be almost paid off by the fall.  Probably less than 2k. No late payments for either of us.  She has a discover card on hers with a 5k limit that was bogus, and late, but it is being removed.  DIscover said they would remove it (it was her parents not hers, she was 15 when they opened it, lol) and I also wrote letters to the agencies to have them removed.  (i've been lurking for a while!) 

Just looking for any advice and trying to gain a little knowledge of what to expect.  

Credit.

Me: 623 TU 623 EQ 641 FAKO EX 

Wife: TU: 641 EQ: 668
Income. 95000-98000 depending on OT
Source of income. both employed
Monthly debt payments. Car payment of 407/month, LOC 120/month, CC's 100 a month min, plus school loans not that much though.

Employment: I've been with same company since 2001, this is her first year teaching. 

Assets/Reserves. 7500 cash, 15k 401k, my mother is the real estate agent, and will be giving me her cut as a gift so around 5k which if we stay in house, she can give me at closing for the deal.   
Location. Rural PA
Property. Single Family house 11 acres

Value. the house we want is listed at 269,000
Occupancy.  Primary residence,.
Transaction Type. PURCHASE

any other questions please just ask.  I want this to run smoothly and want to be as prepared as possible so I don't get into a bad deal. 

thanks! 

[Anonymous]

You said this is her first year teaching, is she coming right out of school or just changed jobs? They're typically looking for 2 years history and they will count education if the employment is in the same field as the degree. Otherwise they may not include her income because of the short employment history.

Your scores are right on the border so you'll want to be very careful with them.

[Anonymous]

She just graduated in May, so this will be her first year teaching anywhere. (she did substitute a few times before the end of the school year.)  I think I can bring our credit scores up at least 20 pts each by this fall just by paying down the credit card debt...and when the bogus discover card comes off her reports. 

[Anonymous]

for some reason I had to change my username, it wouldn't let me sign in with the original one.

[Anonymous]

As long as she's right out of school you shouldn't have any problem including her income.

Both of your scores (assuming you pulled them from here and they're actual fico scores) meet the minimum right now for FHA. You just want to make sure you don't do anything to drop them. Becareful about dipping into savings to pay down cc debt to unnecessarily raise scores. With FHA loans you get the same rate whether your score is 620 or 800. FHA requires 3.5% down so you'll be looking at a downpayment of about $9500 so you'll want to keep that cash saved instead of paying it toward cc debt. Your lender will tell you if paying down cc's is necessary but i wouldn't touch them for now.

You look good to go, i'd apply right now if it were me. Good luck!

[Anonymous]

Thanks for the encouragement...I needed it.  I didn't know that interest rates were the same on FHA loans, thank you for that info. 

One more question, if we were to apply now...she does not begin getting paid until September, will they take that into consideration?( I'm pushing for a closing date in the fall.) Should I get a letter from the school district or something? My concern is applying now, with only my income and not being approved for enough.  

thanks again 

[ShanetheMortgageMan]

You should get her accepted employment contract, going over the salary, etc.  If it's non-revocable then lenders may use it now to qualify, however many lenders are requiring at least 1 paycheck stub from the new job in order to use that employment and it's income to help qualify.

[Anonymous]

plan is to not close on this house until the fall...so a pay stub is possible.  She doesn't have the employment contract yet, they are not done hiring until the end of July so it doesn't go the school board until then.  She has a job for sure, we just don't have proof.

My other is concern is when to place the bid because we won't qualify until we get this contract or pay stub, but we don't want to lose the house either.  There is no 45 day period here unless you specify it in the contract and the seller agrees.  So anyone can wipe us out at anytime it seems.  

[Anonymous]

I Talked to the finance lady for a couple minutes today...she said she is getting people approved for FHA loans with scores of 580.  I bought a FICO EQ score today, and my lowest is 646...EX is always the highest for me, but obviously I don't know exactly what it is.  Usually its 19pts higher.

[ShanetheMortgageMan]

You might be able to get a pre-approval with the condition tha she provides eligible employment before closing.. not always something the lender can do but it's worth asking.