Buying A Home
Jdunk2008
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Is your credit affected when purchasing a home?
New to all of this-young and just trying to learn. Looking to buy a home in another year or so.
Just curious if your credit is negatively affected when you buy a home/land?
Does not having a full 20% drop your credit score? Or even if you have the full downpayment does it do anything to it?
Just curious! -Thanks! 
Re: Is your credit affected when purchasing a home?
Not having 20% down does not have anything to do with your credit score - but it will have something to do with the kind of loan and interest rate you will get.
Your current credit score plays into buying land or a home.
After the purchase your debt to income ratio will change and may play into any other loans you might want to take out after that.
What to do while you look to the future home buying . Make a budget - track your spending. Save for down payment, closing costs, utility deposits, moving costs, repair/renovation costs, decorating/furniture/appliances, yard items/tools & miscellaneous.
AND after all that - have an emergency fund in place - you need one when you are a home owner .
Buy a house you can comfortably afford. 25-28% of your TAKEHOME pay . That should cover mortgage+PMI (if not putting down 20%) + insurance+taxes+utilities. More than that can make you house poor.
Pay off your consumer debt , save, save, save - meanwhile .
Make a list of needs for a home, and a list of wants. Know what you are willing to compromise on as you will not get it all.
Two good books to read: Homebuying for Dummies and Mortgages for Dummies.
All of the PP.
And, I'd add that you should research a lender and have a good idea of what you want in a loan.
If you aren't familiar with home loans and/or their terminology, then go to a few big banks' mortgage sites and start clicking around on their options to get a feel for the language. While each bank will probably offer slightly different loan terms and rates, the generic language will be the same.
Don't do a bunch of applications. Do you research first, pick a lender, and do one application.
Be prepared to provide W2s, pay stubs, and other financial records...so if you have to dig them out of storage, plan ahead.
You may wish to pull your (and your FI or DH's) credit reports now and verify their accuracy. Each person is entitled to one free credit report, per year from each of the main reporting agencies (Transunion, Experian, Equifax). You have to pay extra for scores, but you don't really need that anyway if you are just verifying accuracy.
We put the 3.5% FHA required down payment, closed on house Oct 15th, 3 months later (now) credit score is slightly higher -just by a few.
I agree with PP, requesting for a loan now might not get approved since there's a big purchase/loan already on credit but as far as getting credit card acceptance after closing on house, shouldn't be a problem.
Thanks for your responses. Since the beginning of the year I have been using quicken to view my spending and to get a better idea of where I spend money. I'm hoping to save as much as I can over the next year and see what I have accumulated then look into a house in the spring since this seems to be the time to buy and by then I believe I will have enough or very close to 20%.
You can search for the financial planner to make your good financial records. They can also help you to know about new pension scheme . Your credit will not be much affected by knowing about the new financial plans when you are purchasing a home or doing some investments.