first time buyer needs loan advice

Guest 0.10 Dollars($)

i am planning to buy a home in texas by next year but I’d like to prepare from now. How much do I save in the bank so that I can buy my first home? My credit score is 678. my credit cards have more than 40% balance. Is that good enough? My job is stable and my husband’s income will be added too so that we get a good amount for the purchase. I was just thinking if I should cut up my cards and consolidate debts and pay extra each month. Need to buy a car by next month. How will it affect my home buying? I'm looking to pay $350 monthly for the car. How do I calculate my debt income ratio? And can u suggest what loans can be good for me?

larry · Joined: 27 Jun 2007 Posts: 3313 471.31 Dollars($)

Hi Edward.

Welcome to the forum.

Your credit score is impressive and you have a steady score of income. But if you buy a car now that will increase your DTI ratio and monthly expense. So check out whether you can afford it nor not.

BTW you should shop around for lenders to check out whether you can get approved for a mortgage.

Best of luck,
Larry

brian1 · Posted: Sat Jun 14, 2008 5:37 pm Post subject:

Gross Monthly Income divided by total monthly credit payments

There are two DTI ratios
Housing and total

Gross Monthly Income divided by house payment tax/ins = front end number
Gross Monthly Income divided by all credit payments including housing = Back end

FHA likes 33/41 but it is not a hard and fast rule unless you have to go manual underwrite

Conforming will allow a higher dti.
The more you can save for a down payment the easier the process will be

Good Luck
Brian

chrisburns · Posted: Mon Jun 16, 2008 11:59 am Post subject:

Your credit is good. IF you want to list your income and all of your monthly payments I'd be more than happy to help you calculate your DTI ratio and see how buying the car will affect it.

As far as how much money you need to have saved up it varies depending on which loan program you are going to use.

FHA requires 3% of the purchase price
USDA requires $0 down
Conventional financing will require 5%-10% down but to avoid costly PMI with conventional you will want to have 20% down.

I would suggest applying on this site and having a consultation with a loan officer that can go into the details of your situation and help you make a game plan and informed decisions.

Congratulations early on your new home purchase!

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