Mortgage advice needed

[sybasedba23]

So, wife and I finally pulled the trigger to buy a house on Nov. around Dallas/ Ft. Worth area. Our max budget is around $370k, we really don't wana go over that. I checked couple of new build they got some builder incentives going on. Any pros/cons on this? 

Some info regarding our finances/debt.

Income $170k with yearly increase

• Wife $58k - OT / Bonus not included
• Mine $112k - extras not included

Both at same jobs / position for  almost 5 yrs now, same employer. Also pay grade has always been pretty much the same over the years.

Debt

Car Loan

• CRV $12k - $400/m
• Civic $28k - $540/m

We bought the civic 7 months ago. Also got couple of inquiries on my report ( AMEX CCs and car loans 7-9 months ago ) No late payments and solid rental history.

Credit Card

$6k or 6% of total credit utilization

Savings  $70k

Investment (401k & IRA ) $140k

Fico Score

• Wife 750+
• Mine 733

Coventional w/ 5% DP  ( new build )

What is our chance of getting approved with only 5% down? Do we need to pay off that $6k credit card debt?  And how soon should we start applying for the pre approval if we want the closing done around November?

No plan on opening a new line of credit for the next 2-3 years.

I will really appreciate your advice.

Thankyou!

[ShanetheMortgageMan]

Builder incentives can be great, but if they are tied to using their 'preferred lender' then just make sure you aren't getting hosed by comparing it to at least 2-3 other lenders.

You shouldn't have any trouble qualifying in your current situation, but what is the individual utilization on that credit card?   It might be bringing your scores down, and the lowest middle score from all borrowers on the loan is what is used to determine interest rates.  Rates improve every 20 points, so a 720-739 score gets a little worse rates than a 740-759, etc. and then the top tier is 780+.  

How soon you need to apply will depend on the builder and their inventory.  Some builders have unsold inventory ready to move into and others may have homes that are nearing completion.  If you are buying a home from a builder that is already completed then they'll probably expect you to close within 30-45 days of your offer being accepted.  If you are buying a home that is still being built then the closing date will usually be shortly after it's completed.   Closing in November would mean you'll need an offer accepted no later than October, but possibly sooner. 

[Realist]

It sounds like you're someone that runs the numbers, so I'll toss out the obvious.  No matter what the taxes were for the property, no matter what's listed on those closing documents, expect your tax portion of your payment to shoot much higher come the following year - when they readjust.

There are countless people online screeching about this detail, not knowing after purchasing their homes.  Tax readjustment, combined with property tax increase, creates a hefty whirlwind that you have to be aware of.  Those numbers matter.

Congrats on the home.

[pizzadude]

Assuming you don't have any derogatory information on your reports then you're probably in good shape FICO score wise, although it wouldn't hurt to go ahead and pull your scores to see where you stand.  

As mentioned above there may be some benefit to tweaking your utilization if it means you get a slight bump that would qualify you for better rates.  

Also I'm assuming that the lowest of you and your spouse's middle score would be used to set the rate but @ShanetheMortgageMan could confirm this

[ForwardLooking]

I am in the same area.  I just got into contract and loan approval with Lennar in Aubrey (North of DFW) with a new built house in that price range.  I had a few old blemishes (scheduled to fall off in a few months) and was able to get a 4.625% rate with a 30 year conventional fixed loan through Lennar's in-house lender.  I did rate shop, and no one could touch it (sorry Navy Federal).  I am doing 20% down though and have no credit card debt to speak of because I pay in full each month.  I do have a $28k car loan still with $600 payments.  I have a similar income as you too.  Luckily, I do work from home most of the time, so the commute was not an issue for me.  Also, this puts me a little closer to my kids and grandkids, so I consider that a win.

[FicoMike0]

Ditto @ShanetheMortgageMan 

Going into mortgage, you want to peak scores. Game everything you can. Keep reported individual utilization under 29%, total under 9%. Do azeo