Here is the backstory to my issue. I am 23 and will be getting married in July of 2009. My fiancee and I are planning on trying to move into a house of our own between April and June 2009. She has a large chunk of change saved up, I on the other hand, am not so lucky. We both have great jobs, shes a nurse pulling in 40k a year, and I teach Engineering and Technology with an income of 42k a year. She has very little debt and an average credit score of 720. Here is my situation below:

Credit Card Debt:
1st Financial - $1000 with a $8000 limit
MBNA Visa - $1670 with a $3100 limit
MBNA Mastercard - $3614.98 with a $5500 limit
Car payment - $262.76/month with 22 payments left
Student Loans - payment of $175 month

Take home pay after taxes is approx $2200, paid once a month, at the end of the month. I will be finishing my masters in May of 2009, so that will be a $4000 pay raise next year, but I will have to pay ~ $1600 in January for my last semester of tuition.

Currently I have $2500 in savings, and around $1000 in checking - not much, but I just really began saving around April of this year. I pulled my credit score on May 12, 2008 and here is what I had.

TU - 680
EX - 741
EQ - 686

So, now that you know a little about me, heres where the need for advice comes. With all of the economic turmoil and problems getting loans, I am worried about getting our first home loan. I know there were lots of options for first time buyers, but now the market has switched a lot. What would be the most important thing for me to do? Should I take my savings and go ahead and pay off the CC debt, then try and rebuild savings before we apply for a loan. We were planning on each putting down half of the down payment, hoping to put down at least 10k total (Wanting to get a house around $175k). Anyways, as you can see, theres a huge difference in my credit scores depending on what company, I don't know a whole lot about mortages, other than what I have been reading online. So....if you were in my shoes, what would you recommend that I do. Any help is greatly appreciated.

Rent until you can put 20% down in cold hard cash while STILL having 6 months' expenses saved up for emergency.

We've had enough of you deadbeats trying to buy with 5% down. You've practically imploded Iceland's monetary system, where will you stop??

Kevin, as I have understood what is going on with the market/economy, its the people who should have never been given a loan in the first place, people with horrible credit, way to much debt, and a instead of having a mortgage based off of 20% take home it was more based off of 35%. Oh, and sub prime lenders dealing with ARM. Sorry if Iceland's monetary system has imploded, but I was looking for advice. I appreciate the thought of waiting an extra 6 months and renting. A 2 bedroom rental in my area is ~ $800 month, so I would be able to save a little more per month if I kept renting.

Honestly (not a mortgage expert here) - getting married is HUGE!!! Throw in a little stress over qualifying, DP, inspectors and financing and you are setting yourself up for divorce . Well, not really.... but planning weddings are stressful enough and buying a house is majorly stressful. It just doesn't make sense to combine those 2 things right now. Get married, enjoy life for a bit, get settled and then make that step. Plus bonus..... do people still give money at weddings?? Make a promise to each other to take all your $$ and put that away for a down payment. IF family and friends know that is what you want - DP for a house - you may get more money than vases!

Also, it looks like you still have a little too much debt. May want to whittle that down - and planning the wedding will probably add to the debt unless you are real careful. Word on the street is that we are not close to the bottom in many places yet - you have time.

you can probably get an FHA loan as long as you have no negative stuff in the last 2 years. When I bought mine, I only needed 3% down. Look into different options (I have a great mortgage guy if you need his name, he does 48 states and he has helped quite a few Cbers).

I would work on paying down your balances.

I understand wanting to each put down half of the down payment, but marriage isn't always 50/50.....

this is a team effort and the team needs to put together it's resources and figure out what is best.

I thought FHA requirements was only 12 months. Has this changed?

This is a very condescending post. I bought my house in May with 3% down. I have enough money in savings to pay cash for the house but I chose not too for various reasons. I fail to see how my choice can harm anyone else. Of course, if this post was made in jest then I apologize. I don't get it, but whatever.

I appreciate all of the advice. Sorry I am just posting a response now. The future wifey and I are debating what to do, but in the meantime I am going to utilize all the information from this site and put it to work paying down my debts. I would like to be at least credit card debt free by May. I know it'll be rough but I feel like I can do it while still saving some for a down payment.

Before you buy a house, do make sure you have the down (at least 10%, because those 3% or 5% deals are going to be far less common) and 12 months of savings, including the mortgage payment.

And get a fixed rate loan.

I agree with this. Lenders are going to be tightening their requirements. So don't be surprised if they require you to have at least 10% down (if not more now).

And while I do think Kevin's post was a bit condescending, there is some truth to what he is saying. Too much "cheap" money and our love of being in debt, has caused a big part of the current problem (exacerbated once the housing bubble burst). Ergo, why you will likely see lenders tightening up their requirements.

In the future, keep the inflammatory statements to yourself. We try to help without judging folks here.

This board scares me sometimes.

We are about to buy our first home (sometime in the first few months of 2009). We have enough for a decent downpayment (probably about 15%) with enough savings to get us through 6 months. Suddenly that feels inadequate. Boo hiss!

Renting is much less stressful!

First of all, congratulations! Getting married and buying a house are two big things to tackle at once. My wife of 4 years and I are buying our first house (closing on Halloween) and having our first child (due in April), things are definitely changing! All of the lenders we talked to only required 5% down for conventional (we're going with FHA though). My scores are high 600's (like yours) and my wife's... well, lets just say she was more responsible in college than I. I think a big part of it is in what area you are buying. I was told that we are not buying in a "declining market" so we didn't have to meet tougher DP and credit requirements. We were approved for $200k with $13.5k saved (but no way were we going to tap all of our reserves!). If your local market allows (talk to real estate folks), you can have the sellers pay closing cost so you can keep more of your money as reserves. Even if the housing market isn't at rock bottom yet, if you plan on staying in your home for several years your can ride out the final dips. We think of our home as a home and not an investment. We went in knowing our home may lose value.

Some side notes on the wedding: I don't know what kind of celebration you are planning, but guests take cues from the bride/groom. If you guys are relaxed and having fun, everyone else will follow suit. It's been my experience that people remember the party afterwords and not so much the ceremony. Concentrate your resources wisely, but most importantly, ENJOY IT!

I don't think you need to worry, as long as you have something saved up to put in, you'll be OK. Best of luck!