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General Questions - Looking For Realistic Expectations

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Anonymous
Not applicable

General Questions - Looking For Realistic Expectations

Good morning everyone,

 

My wife and I are looking to buy our first house in June or July of 2017. Currently, our credit is great (750+) and our combined DTI ratio is about 8%. The only debts we have are our car payments ($980/month combined) and our average gross monthly salaries are approximately $11,842. We are looking to buy in the surrounding areas of Richardson, Rowlett, Plano, and Garland Texas.

 

An important note to keep in mind is currently we have $0 in savings due to just paying off all credit card and student loan debts. We will have approximately $15k to $20k saved by July 2017, but building that savings from the ground up starting January 1.

 

Now, the concern I have is not necessarily getting approved for a mortgage loan. It's more of not having anything in savings currently and building that savings over the coming months.

 

Some questions I have as of right now:

 

1) When should we start looking for properties?

2) What impact does having very minimal savings until July 2017 have?

3) Is a conventional loan a reality if I am looking in the $250K price range?

4) Looking at our situation, is there anything of concern?

5) Do you have any advice?

 

Thank you for your time and if I need to clarify anything, please let me know.

Message 1 of 5
4 REPLIES 4
StartingOver10
Moderator Emerita

Re: General Questions - Looking For Realistic Expectations


@Anonymous wrote:

Good morning everyone,

 

My wife and I are looking to buy our first house in June or July of 2017. Currently, our credit is great (750+) and our combined DTI ratio is about 8%. The only debts we have are our car payments ($980/month combined) and our average gross monthly salaries are approximately $11,842. We are looking to buy in the surrounding areas of Richardson, Rowlett, Plano, and Garland Texas.

 

An important note to keep in mind is currently we have $0 in savings due to just paying off all credit card and student loan debts. We will have approximately $15k to $20k saved by July 2017, but building that savings from the ground up starting January 1.

 

Now, the concern I have is not necessarily getting approved for a mortgage loan. It's more of not having anything in savings currently and building that savings over the coming months.

 

Some questions I have as of right now:

 

1) When should we start looking for properties?   You can look on line now, but don't get in touch with an agent until you are closer to your goal (2 - 3 months before July)

2) What impact does having very minimal savings until July 2017 have? No real impact. You have everything else, you are just starting your savings journey now which is fine. 

3) Is a conventional loan a reality if I am looking in the $250K price range? You have great scores for a conventional mortgage. 5% down on a $250k purchase is well within your range. Remember to save enough for closing costs and pre-paid expenses due at closing (rule of thumb is another 4% of the mortgage amount)

4) Looking at our situation, is there anything of concern?  I see no areas of concern. 

5) Do you have any advice? Get a Realtor that works the areas you are looking to live in and interview a couple so  you choose the best one for you. One that you resonate with and one that will answer your questions. 

 

Thank you for your time and if I need to clarify anything, please let me know.


You look like you are in great shape - except for the down payment and closing costs. I'm sure you will have that handled by your time frame if you start now. With no debt you should be able to get to your goal.  Good luck!

Message 2 of 5
Anonymous
Not applicable

Re: General Questions - Looking For Realistic Expectations

Thank you for taking the time to respond!

 

9% of $250K is $22,500. With that number and still keeping about $5K in savings, it looks like I am going to have to go month-to-month for a couple of months beyond my current apartment lease to have enough to cover everything. With that being said, it seems as though September or October of 2017 is more of a realistic timeframe to be able to get into a conventional mortgage.

 

Now I am wondering if FHA would be the better route to go.

Message 3 of 5
Anonymous
Not applicable

Re: General Questions - Looking For Realistic Expectations

If you can save $15,000-$20,000 by July, you should be fine to go 5% down conventional. You can get conditionally pre-approved (the condition being funds to close) in spring, and can probably start making offers in June if your savings timeline is accurate.

Message 4 of 5
saltlakere
Valued Member

Re: General Questions - Looking For Realistic Expectations

You can also put the closing costs into the loan. The biggest focus area for you would be the downpayment. You're better off going conventional over FHA because FHA has up front mortgage insurance and the monthly MI stays on the loan until it's retired. Conventional will come off at 80% LTV and you'll have a lower factor because your scores are good.

Message 5 of 5
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