Post # 1
The wedding is finally over and we are trying to plan ahead for the next big step… buying a house! Of course, we would love to buy a house in June when our lease is up. However, since we had to clear out most of our savings to pay for the wedding that isn’t being realistic (I had hoped the wedding wouldn’t cost so much so we could pull it off).
I have started to try to do some research online about the best way to start planning for this. I know it will be at least 6 months before we can do this but might not happen till closer to a year. We have already agreed that we will be putting money into savings so we can have a downpayment…eek 10% down on the house we would like is going to take forever to save 🙁 I paid off my car last month so I have that extra money each month.
My question is though is it better to put that into the savings for our downpayment or is it best to split it up and pay off some of my debt? He has very little debt other then a little on student loans. I owe a ton on students loans (and getting ready to add to it with grad school). Then I have a few credit cards that I owe on that I over used during college. My credit rating is in the good section on the scales from truecredit.com However, I know it always helps to get rid of the debt that I have.
Any tips or helpful thoughts from people that have gone through this process?
Post # 3
You need to have less than 25% of credit card debt. Basically if you have credit cards with limits that total $1000 you should not have more than $250 owed on them. Most lenders now, will insist that this is the case. You need a minimum of 680 to qualify at all and 720 in order to get a good interest rate. You also need 20% down in order not to pay PMI.
Post # 4
congrats on being married!
you should definitely pay off your credit cards first. student loans aren’t held against you so much when it comes to credit, but balances on credit cards will kill you.
what is his credit rating? if it needs to improve, open a couple of store or gas credit cards and use them like cash — be sure to pay off the balance every month.
Post # 5
I would focus on paying down your credit cards and the loans for sure. Especially since you are taking on more student loan debt, that is going to show as a negative on your account.
I don’t know how truecredit.com works but I’m sort of wary of those sites. The only place to get your real credit score is through the credit bureaus (Experian, Equifax and Transunion). You can also get a copy of each credit report for free annually at http://www.annualcreditreport.com.
I would try to save up at least 20% if it’s possible, a lot of lenders are wary of lending to people who don’t have a down payment now.
Post # 6
We were going to buy a house before we got married… and then my dad made us take this Dave Ramsey class. He is a well known financial advisor. After working through his lessons, we decided to save so we can have a good down payment. And we also didn’t want to jump into owning something of that value at the beginnin of our marriage. Everyone’s situation is different though! So I’m glad y’all are planning for the future 🙂 I think you should focus on paying off all of your debt. Making house payments will be easier without debt and having other payments (cars, etc). Once you get rid of that debt, then you can focus on putting savings to your drent paymentown payment for a house. You will build lots of credit by paying off your credit debt. And if you are renting, see if the rental agency (or person) will report your timely payments. That can help as well!
Post # 7
All the advice above is good, and I just want to add that you should look into first time homebuyer classes in your area. We took one about a year before we bought and it was SO helpful. It was 5 hours for 2 days and they brought in experts from every part of the home buying process-mortgage broker, realtors, home inspections, lawyers, etc. and they went through everything you need to know about buying a home.
The class we went to is free and we can’t recomend it enough!
Post # 8
Thank you so much for all of the tips. He has perfect credit with an amazingly high score. I wont say exactly mine but it is over the 720 that someone else mentioned. I will def work on paying down my credit cards asap then.
@Bostongrl25: I will def look into that in our area. We want to make sure we are very ready for this before we get into it. I am trying my best to cross check everything and do what we need to so we can buy in a year or so.