My SO is a schoolteacher. I am a software engineer. Our combined income is about $150K.
She has great credit, with about $10K left on her one student loan. I have [lousy --admin LadyGeek] credit, with about $60K left to pay on my student loans. (I was unemployed for a while post-graduation, and defaulted on my student loans. Argh.) I'm back on track with respect to payments, and AFAIK, I have no other debts outstanding that haven't been resolved. (I settled some consumer debt I had accumulated while unemployed.)
I have optimized squaring away my debt to retire as much debt as quickly as possible--settling at lower numbers vs complete repayment--as opposed to worrying about my credit score. I would do the same thing all over again if I had to.
- My FICO: 560 as of Jan 2013 (up from 493 in July 2011; if anything, it'd be higher now)
- Her FICO: 774 as of Jan 2013 (if anything, it'd be higher now)
- My income: Call it $100K
- Her income: about $52K
- Her debt-to-income: 3%
- My debt-to-income: 24.15%
- Combined debt-to-income: 14.86%
- She qualifies for a: ~$310K mortgage by herself
- In a perfect world, where I don't have [lousy --admin LadyGeek] credit, we qualify for: ~$520K
We want a nice place, but not a large place. We're both pretty minimalist, but tired of apartment living with sometimes annoying neighbors where we can't have a grill, and can't really entertain friends. I just turned 30; she just turned 31.
For us, a house is a place to live and have a life. We don't view it as an investment that we'll make money on. If we do, great. If we don't, that's OK as well. Naturally, we'd prefer not to lose money. Given our proximity to Boston, this seems rather unlikely.
What should we expect if we were to try to get pre-qualified for a mortgage? Is it better to just use her credit than to use both of ours? Should we investigate having her parents co-sign on the mortgage instead of having it be in our name? (How difficult would it be to change that later to remove them and add me?)
This is all uncharted territory for us. We're planning to talk to the mortgage people again in the next week or two, but I'd like to be prepared as much as possible before then.