I would like to start the process of buying my first home...

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Originally Posted by Scogin

One of the biggest factors for credit score is average length of credit. If you open a new card or two it is going to shorten the average and bring down your credit score.

Another major factor is your percentage of credit utilization. What is the percent of money you owe versus your total credit limit?

Do you have any collection accounts or negatives on your credit report?

I just learned all about this as I was cleaning up my credit score.

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^This is good advice. Your income vs debt is a factor when you get ready to buy a house. If you have debt, pay it off quickly by starting with the lowest balance and paying minimums on everything else. Once the lowest one is paid off, apply everything extra to the next lowest balance. Repeat until it's all gone. (Thanks, Dave Ramsey)

As stated above, any new credit accounts you open are going to hurt your score. In fact, your score takes a hit every time someone checks your credit. If you keep these accounts open for a long time, with a low balance, and in good standing, your score will eventually go back up, but it takes some time.

FWIW the wife and I have several credit cards and we pay them off every month to keep from paying interest on any of them. This does build credit, but only because we are keeping accounts in good standing for a long period of time. Get something with a rewards program so you're getting something extra out of it (cash back, airline miles).

Say something on fox news last night about a federal program that helps people get into a home. You may look into it. http://kdvr.com/2013/03/19/home-buyi...ir-own-houses/

I agree with the others that you don't need a 250K plus home right now. Find a nice foreclosure in a good neighborhood and start to fix it up. Hopefully the housing market will turn around and you will have a nice chunk of equity to play with then.

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Originally Posted by Lurch

I agree with the others that you don't need a 250K plus home right now. Find a nice foreclosure in a good neighborhood and start to fix it up. Hopefully the housing market will turn around and you will have a nice chunk of equity to play with then.

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+1 You don't want to be "house poor," as in stretching the limits of your income to make your mortgage. When we bought our first house, the bank kept trying to push us into a $350k+ house because of our credit scores and income. We opted for something under $230k and it has worked out well. Our mortgage payment is very low and we're able to pay extra toward principal every month. Since your interest on your mortgage is based on the amount you owe, the faster you pay down the principal amount, the less interest you pay over the life of the loan. (I'm just learning about all this too, this being my first house. Someone please correct me if I've got this mixed up in my head. I don't want to give any misinformation).

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Originally Posted by Teufelhund

+1 You don't want to be "house poor," as in stretching the limits of your income to make your mortgage. When we bought our first house, the bank kept trying to push us into a $350k+ house because of our credit scores and income. We opted for something under $230k and it has worked out well. Our mortgage payment is very low and we're able to pay extra toward principle every month. Since your interest on your mortgage is based on the amount you owe, the faster you pay down the principle amount, the less interest you pay over the life of the loan. (I'm just learning about all this too, this being my first house. Someone please correct me if I've got this mixed up in my head. I don't want to give any misinformation).

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You got it right, amortization is what you are referring to. There are tons of calculators out there and your loan should have available the orgiinal schedule. What really sucks when you look at the schedule is roughly the first half of the loan you pay more in interest than principal, so making extra principal payments can be really good.

Here's a good trick, go put $1,000 in a CD and take a loan out against it at the bank, pay it all back the first month. Credit report will show a bank loan paid in full. Lather, rinse, repeat.

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Originally Posted by BEELZEBOB

But as a 29 year old manchild, I dont know where to start.[pick-me]

My current credit score is a 698. I would like to build it to at least 720 in the next 6 months while saving up for a wedding and down payment.

My plan to build credit would be to open up an American Express card, and just use it as I do with cash and debit cards, and just pay in full every month. (Is that a sound plan?)

Once I have built up another 20 - 30 points, I was going to try and get pre approved for a $250-$300K fixed loan. Where would be the best place to start?

I am hoping I can get a good 15 or 20 year fixed mortgage.

Can I ask for the kindness of one of you "adults" to kick me in the right direction?

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Originally Posted by BEELZEBOB

No collections or outstanding negatives. Just went from having absolutley no credit whatsoever 5 years ago, to now.

I think I currently owe just over 50% of my total credit limit. Just did a 50/50 cash vs finance on an engagement ring. I will have that paid off in full by June/July

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My understanding is that optimal range is around 7%. They want to see that you are using your credit but are not maxed out. If you are at 50% utilization paying that down to 7% should get you 10 to 20 points easy.

Easiest way to get qualified for a mortgage? Walk in with 20% down payment and talk to a lender with a brain. The big national banks like Chase do not have a good reputation in this area. We had great success dealing with Ent FCU when we moved out here. That downpayment goes a looooonnnnngggg way towards assuring the bank they're making a good loan.

+1 to NOT buying a $300K house (unless you're making $100K/yr, but you probably wouldn't be asking this question if that were the case). I like Dave Ramsey's recommendation to keep the payments under 25% of your take-home income each month. If you stay within that limit, it's unlikely the house payment is going to stress you. You're also in a better position if Murphy comes knocking on your door.

Other bit of advice on a foreclosure, make damn sure there never was meth in the house! One of the reasons I bought a fairly small BRAND NEW house. Other reasons for a small house, cheaper insurance, taxes too. Newer houses qualify for lower insurance premiums. Plus I heat the whole house with a wood stove that is situated almost in the middle of the house. One January the gas bill was $220, so a $1K investment later in a chimney and a good used wood stove from craigslist I have a warm house by burning mainly old wood pallets.

Thank you guys.

This is very helpful.

No better place to start building a future, than digging through other people's similar past.

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Originally Posted by BEELZEBOB

Thank you guys.

This is very helpful.

No better place to start building a future, than digging through other people's similar past.

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and Murphy will bite you. I have been unemployed for 6 months now and just found out that I have some medical conditions that may prevent me from working for a while. Luckily the wife and I built a smaller house in Elizabeth and put everything towards it we could and it's paid off before I turned 47.