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I plan to buy my first home, me and my spouse make 90 thousand combined per year for the past 4 years.- have been saving up (have 60k total saved for downpayment/closing costs etc)
we have lived in apartments our whole lives and are completely sick of having to deal with other people. lol.
Anyway, we are seeing people that are buying homes left and right and we know for a fact that they don't make nearly as much as we do. So I figured that as a first time home buyer there must be incentives.
Doing the standard math we can only afford a 250k home.. which is unheard of unless we want to be very far away from our jobs and in a non desired area (i.e. high crime)
but.. as a first time homebuyer have no idea what any of these incentives mean or do for us or how they can help us out.
So, if anyone can help us figure this out, it would be great!
more info:
excellent credit rating
want to live in NJ- essex or bergen county
monthly debts combined 1000 dollars (car payments incl. gas, insurance, cell phones, cable and credit cards)
I think your "standard math" is off a bit. Not sure where the idea that a $250,000 house is all you can afford if you have $60,000 for a down payment. People can and will leverage themselves more then that.
Obviously you know your personal situation/financial outlook the best, but you can most likely reasonably go up to $300,000. On a 30 year loan, you are talking about a $237 per month price difference and you will see a big jump up as far as quality of the house/neighborhood at 300 vs 250
right, but, even at 300k the houses are not desirable. Is there a way to stretch to 400k without doing mortgage/taxes be above 2100 by taking advantage of the new home buyer programs? i'm not sure how they work at all.
right, but, even at 300k the houses are not desirable. Is there a way to stretch to 400k without doing mortgage/taxes be above 2100 by taking advantage of the new home buyer programs? i'm not sure how they work at all.
You cant afford 400k and there is not going to be a first time home buyer program that will get you there. I cant imagine any program like that being such a big help.
My understanding is that most of the "first time homebuyer" programs are geared towards helping people who have an inadequate down payment or bad/unestablished credit, neither of which apply to you.
I have heard of banks offering first time buyers to take a course on home ownership/paying the mortgage and offering a small rate reduction for the same.
My fiance and I are in a very similar spot looking to bu in the spring/early summer. I know there are programs but I think there designed for lower credit/down payment. My budget is also 250K with a 50k-60k total down payment including closing costs. I think you can find something desirable as long as your are flexible about the house.
Supposing a 30 year loan 3.5% mortgage rate (possible but improbable considering the other constraints), a 60k down payment on a 400k home with 3% tax (not the highest in the area nor the lowest) gives you PIT of $2527. If PMI is 0.5%, that's $142 more. You also have to add homeowner's insurance, which I'll optimistically place at $100. With no other debt that's a debt-to-income ratio of 36.9%, which is doable but leaves you pretty darn house-poor (the supposed rule-of-thumb for lenders is 36%, with the hard limit 43%. I was at 40% for a short while, with two houses, so I know the 36% isn't set in stone).
With an additional $1000 of debt you're SOL, but the only part which counts is the car payment and the minimum on credit cards; I believe if you pay off your balance every month the cards don't count at all. But really you probably don't want to carry that amount of debt unless you reasonably expect your income to increase a lot and soon.
Fortunately you almost certainly don't need to go to $400,000 to get a decent house in a decent area. Say you go to $350,000 and pay 3.75%, with a $50k down payment (the other $10k being used for various costs). This gets you to $2490 PITI+PMI, and a more reasonable 33.2% DTI.
right, but, even at 300k the houses are not desirable. Is there a way to stretch to 400k without doing mortgage/taxes be above 2100 by taking advantage of the new home buyer programs? i'm not sure how they work at all.
My husband and I bought a home last year and while looking we toured some $400K+ homes, and let me stress that most are not in turn-key, brand new everything condition. Some where actually horrible. The good thing is you can find some nice homes closer to $300k but you need to be willing to look outside Bergen and Essex (try broadening your search to a radius.) Right now its a bad time to buy a home since people don't generally put there homes up for sale during the holidays, so wait for spring.
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