My fiancee and I are interested in buying our first house and are beginning to go through the process. We'd like to put 20% down to avoid PMI and are thinking ideally a 20-year mortgage. Between my various accounts I have enough for the down payment and closing costs (about $65k in total). I have some negative marks in my financial history though, so she has a better credit score -- hers is consistently 800+ and mine varies from as low as 711 to mid-high 700s depending on the report.
My question is, due to our different financial situations, does it make more sense for my fiancee to go through the mortgage pre-approval and application, or me, or both of us? From what I understand, both the cash-on-hand and credit score will make a difference in our rates, but am not sure if one matters more.
For the sake of this question, let's please negate the potential fallout if the relationship ends. That would be an unfortunate situation regardless of how the mortgage is set up, and I know is worth considering, but I'd like to focus on the financial aspects only.
Our situation more exactly:
- Price range: $200k-$250k
- Mortgage length: ideally 20yrs or less
- Down payment: 20%
- Property tax rate in my area: ~2%
- Her details
- Savings: ~$5k
- Income: ~$45k/yr
- Debt: ~$12k car loan, ~$20k student loans
- Credit score: 800+
- My details
- Savings: ~$35k in bank, ~$30k in mutual funds
- Income: ~70k/yr
- Debt: none
- Credit score: From 711 to 785 depending on the report, with most numbers in the lower part of that range. I missed some utility payments about 5 years ago and I think the variance is because some reports don't have knowledge of that.
Please let me know if any other information would be helpful. I consider myself relatively financially literate but buying a house feels a lot more daunting. Thanks for your time.