First time buyer

**guitarguy** · 11-13-2008, 10:10 AM

Hello there, I'm trying to buy my first house within the next year. I live in California, make about 120k a year and my FICO is around 650. I have spent a lot of time on google and home buying sites gathering information. I have a few specifics I could use help with.

I think my FICO score is too low, I want to get a good interest rate. I feel if I spend some time paying off credit cards it will help my FICO, this will really delay me buying a house as I wont be able to save for the down. So my question is, given my current FICO, should I be focusing on paying off debts to raise it? Or is my money better spent being saved for a down payment?

Also, I don't really know how to find my budget. I played with some mortgage calculators and assuming I did them correctly, I am looking at paying around 2k a month for a $400,000 house. Does that sound about right?

Thanks

**Mario J.** · 11-13-2008, 01:24 PM

Hi there! Your questions are for a Lender, not a Realtor. I recommend you ask around your office and find a good Lender that people you know have used in the past--someone who is reputable and trustworthy. The Mortgage industry is going thru a major upheaval now so it's important you check around find a good Lender.

Then, the questions you raise are best discussed with the Lender you find.

Thanks,

Mario Jannatpour

**Mike Taylor** · 11-14-2008, 03:42 AM

Mario is right, these questions are better suited for a mortgage broker. That being said here is my .02: You should be able to qualify for a FHA loan with a 650 score. Credit scores are a very funny thing, if you are trying to improve your score make sure you get someone who knows what they are talking about. 2K seems very low for a 400K house, depending on how much you are putting down.

**fmike630** · 11-14-2008, 04:21 AM

FICO score is extremely important with the amount of interest you will be required to pay. The closer you are to 700 or above the less down payment you would be required also.

Todays market with a 650 score they would require 20% plus 3-6 months of escrow.

You need to probably add the taxes and insurance in your monthly payments not just interest, but before applying check around for the best interest rates.

Do you have an experienced Realtor. In California with all the short sales and pre-foreclosures Im sure a Realtor can find you a great deal.

**La Jolla Real Estate** · 11-14-2008, 10:09 AM

All good advice above. Additionally, if you can get credit cards to 30% balance - without taking away too much from your down payment, this will put you in an optimal position for credit scoring.