For the first time in my life, I have a employer matched savings plan similar to an IRA. Ok, I am working on getting a house within the next 6-12 months, no hurry.

1) I plan to save up $700 monthly of pre-tax income. Employer adds 50% to that. I need 3% down payment for FHA loan- housing cost continues to drop in my area and plan to get a place for $175,000 to $225,000.

2) I have a revolving CC balances are a total of $1500. I plan to pay off over the next few months which will help my FICO scores.

3) I have some collections accounts should I work out payment plans even if they will not improve my scores? Mostly because I owed the money but also because I understand that red flags go up when one applies for a mortgage. I can set aside $200 per month to do this, total owed is about $9,000. (Charged Off during long, nasty divorce).

I would like to negotiate having them not report to CRA during repayment period, and only report if I fail to meet obligation. Is this realistic.

What do you guys think?

no... theyre going to report whether you want them to or not.

Darn! I need some sort of game plan. Maybe save as much as I can and work on PFD. An irksome part of CO is that they try to re-age them.

How old are the collections?

Since you have a long time frame, maybe you should consider NACA!

It's possible, but I wouldn't count on it. Seems slightly easier if it's medical debt, at least IME, tougher if it's credit card debt.

The savings idea is GREAT! However, and it may just be me, but I think that there is something that you can learn from the current economic situation and the housing segment in particular. That would be that anything under at least 20% down is asking for trouble even IF you can get approved under such terms. Spend some more time looking into it. House values are going to continue to decline and will only appear to increase as a result of the inevitable inflation headed our way.

LOL, If you are expecting high inflation then shouldn't he buy a house and lock in low interest rates right now?

FWIW I completely agree with caffeine kid. It would be far better if the government banned absolutely the issuance of any mortgages without at least 20% down, rather than actually forcing the market into the disastrous practice of accepting 3% down on an asset that can very easily lose 3% or much, much more of its value. Seems to me we have not learned a thing.

No. Think about it. People are losing homes NOT because of a downward adjustment in home values, but rather because of a downward adjustment income. None of what is going on is happening in a vacuum and very few people are safely buffered from it INCLUDING those who saved. Even though the OP is giddy with a new job and higher income now, who's to say that this is going to be the case in a year when he wants to buy the home, or that banks are going to still be allowing cheats like 3% down or inflated appraisals? Already they are cutting appraisals to some degree, yet still not enough to reflect the market. I believe that this will change.

What should the lesson here be? Well, for starters, if you cannot afford to pay cash for something, or in the case of a home- put AT LEAST 20% down, then you are one job loss or income reduction away from having to give it up. And believe me, it is just a matter of time for most Americans. Year after year, more people who once felt relatively safe in their positions are having the hammer dropped on them and finding themselves either without work or with much lower pay. They are now challenging the whole game. When an economy is run on money games rather than legitimate production (either in raw goods or brain/research), it is only a matter of time before it comes apart. I believe that this is what we are at the head of right now. 2010 will be very telling.

definitely contribute pretax, especially if you are in one of the top 3 marginal brackets.

definitely pay down the current accounts

the collections might be worth PFD attempts depending on the SOL

saving $7,000 for a house might need to take a backseat IMHO.

do you have 12 months of expenses in an emergency fund?

Thank you for all of your replies. It is a lot to think about. I am not sure I will have 20% down on a house but I just accepted work as an independent contractor in addition to the new job. So it will substantially increase my savings. I am also starting a small private practice in my field within a year, I would love to work out of my actual home. I am back to thinking about NACA. I know the economic market is bleak, I have a master's degree, a state license and I am pursuing post-graduate training, thinking of pursuing Phd within the next year or so. I am bilingual, a big plus in my field and have worked steadily all of my life since 16 years old. I have almost 20 years in my field. I am actually enjoying a career upswing and was recruited by the company from which I recently accepted employment. I would hope that although I am paying down only 3%, I will be building positive equity by paying for my mortgage as oppose to rent (rents in NY are steep).

It is a lot to think about but I rather stay on a positive note. The collections are 5 years old and will fall off within a year but I feel some karmic thing about paying them off and will work on PFD and/or just pay 'em off.