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Old 08-30-2009, 03:59 PM
 
Location: Washington State
389 posts, read 1,073,227 times
Reputation: 259

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Okay, so here's the long (and short) of it... Next year, I will be moving across the country with the wife and kids and we will be looking at buying a house.. Not sure EXACTLY when we'll be moving, that will depend on when my transfer goes through, but when it does happen, I want to be prepared...

So I have some questions that, hopefully, someone here can help me with.

My household income is about 35K... how much of a loan would I qualify for at this rate? I have about 2K debt for a motorcycle that will be paid off at the end of this year/beginning of next year. I'm thinking my credit is much better now... I have a credit card that I have used (and paid off the following month), and I have a loan on a motorcycle that I have been paying on (and will be paid off beginning of next year). My credit score USED to be something like 618.. now I'm sure it's higher because I've gotten my finances straightened around. So how much of a loan would I qualify for? (Ballpark figure here would work just fine) Again, when I do go to buy a home, I don't plan on having ANY debt (I have the money to pay off all my debts right now, I'm just paying on the bike to build my credit at this point)

My target price is a house UNDER 120K. Assuming that I have a 10K down payment, is up to 120K reasonable? My REAL target is a house under 100K. But I'm okay with up to 120K because, as I've stated before, I will have no debt when I buy a home. Is this doable?

What do I need to watch out for in dealing with a bank? Do I have room to negotiate a rate? I understand that it's a buyer's market out there, but does this apply with home loans too?

Basically, I'm sort of lost at this point... I want to know what I can afford, and how to go about getting the best possible rate that I can get. I regularly put aside money into the savings, in addition to retirement, so I think I'm doing pretty well there... but... am I?

Anywho, thanks a lot for all your help!
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Old 08-30-2009, 05:13 PM
 
Location: Springfield
2,765 posts, read 8,312,020 times
Reputation: 1114
I don't have a direct answer on your question, but I want to share some of my thoughts.

I am a homeowner, and the cost of ownership goes beyond just the mortgage payment. There's other financial factors like property taxes, homeowners insurance, proximity to work location, upkeep like (painting and repairs) etc.

Taxes can also go up every year, for example right now my escrow payment to cover taxes and homeowners insurance is $366/month and will jump $40 next year, so you need to be careful how much you purchase in the intrem, because in the future it could end up costing you.

In my opinion, after your cross country move, rent a decent place for your family and shop around for a good home. Delaying a home purchase could also buy yourself time where your FICO score could increase 40-50 points and put you in a better position for a better APR mortgage.

Good luck and keep us posted.
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Old 08-30-2009, 05:30 PM
 
Location: I'm gettin' there
2,666 posts, read 7,322,094 times
Reputation: 841
Quote:
Originally Posted by ArcticPhoenix View Post
Okay, so here's the long (and short) of it... Next year, I will be moving across the country with the wife and kids and we will be looking at buying a house.. Not sure EXACTLY when we'll be moving, that will depend on when my transfer goes through, but when it does happen, I want to be prepared...

So I have some questions that, hopefully, someone here can help me with.

My household income is about 35K... how much of a loan would I qualify for at this rate? I have about 2K debt for a motorcycle that will be paid off at the end of this year/beginning of next year. I'm thinking my credit is much better now... I have a credit card that I have used (and paid off the following month), and I have a loan on a motorcycle that I have been paying on (and will be paid off beginning of next year). My credit score USED to be something like 618.. now I'm sure it's higher because I've gotten my finances straightened around. So how much of a loan would I qualify for? (Ballpark figure here would work just fine) Again, when I do go to buy a home, I don't plan on having ANY debt (I have the money to pay off all my debts right now, I'm just paying on the bike to build my credit at this point)

My target price is a house UNDER 120K. Assuming that I have a 10K down payment, is up to 120K reasonable? My REAL target is a house under 100K. But I'm okay with up to 120K because, as I've stated before, I will have no debt when I buy a home. Is this doable?

What do I need to watch out for in dealing with a bank? Do I have room to negotiate a rate? I understand that it's a buyer's market out there, but does this apply with home loans too?

Basically, I'm sort of lost at this point... I want to know what I can afford, and how to go about getting the best possible rate that I can get. I regularly put aside money into the savings, in addition to retirement, so I think I'm doing pretty well there... but... am I?

Anywho, thanks a lot for all your help!
Is this transfer that you are doing with the same company ? If its not then your score will go down a little bit as they look at a long employment history. The buyers market goes as far as the house prices.... the rates for loans are determined by the market in general. You are not putting 20% down, so plan for PMI or any form of mortgage insurance.
My opinion.... calculate your average total monthly expense (look at your credit card and other statements) for the past 4-5 months without the rent. Add 150-300 dollars per month for misc expenses after home purchase. Whats left is for your mortgage, pmi + property tax..... try to stay within that.
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Old 08-30-2009, 06:32 PM
 
Location: Washington State
389 posts, read 1,073,227 times
Reputation: 259
Quote:
Originally Posted by zulu400 View Post
Is this transfer that you are doing with the same company ? If its not then your score will go down a little bit as they look at a long employment history. The buyers market goes as far as the house prices.... the rates for loans are determined by the market in general. You are not putting 20% down, so plan for PMI or any form of mortgage insurance.
My opinion.... calculate your average total monthly expense (look at your credit card and other statements) for the past 4-5 months without the rent. Add 150-300 dollars per month for misc expenses after home purchase. Whats left is for your mortgage, pmi + property tax..... try to stay within that.
Yes, it will be with the same organization.

If I do manage to find a home for under 100K, I might actually be able to put 20% down... I appreciate your input, though!
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Old 08-30-2009, 06:53 PM
 
190 posts, read 412,233 times
Reputation: 167
As a rule of thumb, you can figure on 0.006 x the loan amount (i.e. $600 a month if you borrow $100k) as your monthly payment for a 30 year loan (assuming you put 20% down) and 0.008 x the amount for monthly payment on a 15 year loan. That doesn't include property taxes.
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Old 08-31-2009, 02:57 PM
 
204 posts, read 873,978 times
Reputation: 91
I am in a similar financial situation as you; I make around the same income, I have virtually no debt (aside from student loans), and my credit rating is about 680. However, I am single and did not have 10% downpayment. I actually went with a USDA loan to avoid PMI and even with a slightly higher interest rate which I bought down I was able to do a land/home package for around 110K. We do have fairly low property tax where I am so my escrow isn't very high and as I mentioned I am single so no kids or anything like that to take care of but my payments are manageable. It's going to vary depending on the area you move to but I'd say 100k would definitely be doable.
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Old 09-01-2009, 11:43 AM
 
Location: Oxygen Ln. AZ
9,319 posts, read 18,716,205 times
Reputation: 5764
Quote:
Originally Posted by ArcticPhoenix View Post
Yes, it will be with the same organization.

If I do manage to find a home for under 100K, I might actually be able to put 20% down... I appreciate your input, though!
There are quite a few nice homes, some just need a little paint and patch in Surprise AZ right now. They range from $65,000 to $94,000 in one little neighborhood. Best of luck in your search.
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Old 09-01-2009, 02:01 PM
 
757 posts, read 2,078,938 times
Reputation: 756
You can find a great house for 120 k in Boiling Springs/Inman SC. You are an hour drive from the mountains and there are plenty of restaurants things to do..etc. Dont' move to Raleigh, NC (where I live now) you cannot find a safe, decent house for that price here. There is about a 80,000 difference between home prices in Raleigh compared to Inman/Boiling Springs SC.
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Old 09-05-2009, 04:26 PM
 
Location: Washington State
389 posts, read 1,073,227 times
Reputation: 259
I'm going to be heading to the Knoxville, TN area with my job next year....

Having two kids does put a strain on finances, but I'd say we do okay... So far this year I've saved 4K, and that's with going on vacation, buying a laptop for the wife for our anniversary, and buying the motorcycle (I put $600 of my own money into it and the rest went into a loan which I only owe 2K on now).... so I'd say I'm doing pretty well...
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Old 09-08-2009, 07:01 AM
 
Location: MID ATLANTIC
8,666 posts, read 22,853,798 times
Reputation: 10490
Quote:
Originally Posted by zulu400 View Post
Is this transfer that you are doing with the same company ? If its not then your score will go down a little bit as they look at a long employment history. The buyers market goes as far as the house prices.... the rates for loans are determined by the market in general. You are not putting 20% down, so plan for PMI or any form of mortgage insurance.
My opinion.... calculate your average total monthly expense (look at your credit card and other statements) for the past 4-5 months without the rent. Add 150-300 dollars per month for misc expenses after home purchase. Whats left is for your mortgage, pmi + property tax..... try to stay within that.
Incorrect! I have worked with credit scores since their inception and work closely with bureaus and repositories to rescore customers. Employment is not even a required field when requesting and receiving a credit report. Each repository (Transunion, Equifax, Experian) is required to default to three reasons why your score is not higher. This is true even if your score is an 820 score. Change in employment does not even exist as a reason. In any move, inquiries required to re-establish utilities with new providers may minimally effect the score, but these inquiries are usually done after the mortgage lender has verified the credit. In our current environment, I don't want anyone to think if they change employers, their score will drop. It won't be for that reason.

My advice, call around, find a loan officer that is not only patient to answer all of your questions, but one that is in the area you plan to move to......local realtors are a great source for these referrals (but you would be better off finding one that isn't affiliated w/ the real estate office - or an "in-house lender," find someone independent). You may have to talk to two or three in depth, don't let all of them pull your credit. Trust your gut and seek the advice of the one your gut tells you to work with. Have them pull your credit now, to make sure there are no surprises and go from there.
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