Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Definitely don't take the number that the banks tell you that you qualify for as the amount you SHOULD borrow. Even in today's strict lending environment, they still usually qualify people for more than they really should be borrowing.
If homes really cost $200k minimum where you are, and you only make $44k a year, you need to focus on raising that income, and on saving a large down payment. Remember that the purchase price of the home is not what you are qualifying for, but rather the loan amount. So even on your current salary, you could buy a house that costs $300k if you have $150k saved up to put down.
Remember that the purchase price of the home is not what you are qualifying for, but rather the loan amount. So even on your current salary, you could buy a house that costs $300k if you have $150k saved up to put down.
you could probably get a loan for about $200k, assuming you have no debt.
i wouldn't borrow $200k on $44k/year, personally. i wouldn't even borrow $150k on that.
It's irresponsible to suggest someone making $4400/yr ($2700 net monthly, not accounting for reduced net pay due to 401k contribution and health insurance) could take on a $160,000 mortgage ($200k with 20% down ='$850/mo mortgage). That would be 31% of maximum net pay going to the mortgage, not including property taxes and insurance and possible HOA fees. I own a $150k-ish property and the taxes & insurance add up to $360/mo in addition to my mortgage. OP's $850 mortgage + $350 for taxes & insurance would eat up 45% of net pay!!! There is no way OP would qualify for a mortgage nearly 5 times his income. No way.
OP, read my post on your other thread. You need to save up 20% in cash ($40k in the case of a $200k home) AND 6-12 months living expenses (because how will you pay your mortgage & student loans if you get laid off and don't have adequate savings?!) BEFORE you even think about buying a home.
Also, my starting salary at 22 was a bit less than yours. I'm now 30 and make about 3 times your salary. It's likely your income will be on a similar trajectory over the next 10 years, so be patient, save a lot of money, and wait until your savings and income are enough for you to comfortably buy a decent home. It sounds like in your area $80-100k (the price range you could comfortably afford today) won't even get you into the lowest level of home prices.
It's irresponsible to suggest someone making $4400/yr could take on a $160,000 mortgage.
There is no way OP would qualify for a mortgage nearly 5 times his income. No way.
Where did I suggest he take on a $160,000 mortgage? As I recall I specifically told him that I WOULD NOT even take on a $150,000 mortgage if I were in his shoes.
I also didn't say he could qualify for a mortgage 5 times his income. That would be $220,000. I said he could probably qualify for a $200,000 mortgage at the maximum, because if you look at the thread title, that's what he wants to know. Go jump down somebody else's throat.
Where did I suggest he take on a $160,000 mortgage? As I recall I specifically told him that I WOULD NOT even take on a $150,000 mortgage if I were in his shoes.
I also didn't say he could qualify for a mortgage 5 times his income. That would be $220,000. I said he could probably qualify for a $200,000 mortgage at the maximum, because if you look at the thread title, that's what he wants to know. Go jump down somebody else's throat.
Oh, I'm sorry. I rounded 4.54X up to 5X. Big difference. It's still way too much for someone with that low an income to qualify for.
Since he asked what he would get approved for I'll answer it. I don't care what people say but banks are still loaning mortgages using a stupid formula. I wouldn't be surprised that a 44k salary (assuming you have no recurring debt with 3.5% down) gets you approved for 200k. Banks are still going by gross instead of net income which is STUPID. Gross doesn't get deposited into the bank.
If I was you I'd live in the cheapest home/apartment I could find where I still felt safe and liked. Then save until I had a large down payment or got a wife that works or until I started making more money. 44k in that part of the country (and most places believe it or not) isn't home owner money, sorry.
There's nothing wrong with renting. Hell, you might like it more and save more money and use it towards more toys.
If you do decide to get a home, don't get into a 30yr loan. Do a 15 yr loan even if you don't plan on staying there forever. Because if you do plan on moving 3 yrs from now it'll actually be feasible to move and not get 20k more than what you paid for the house. You pay down the principle so much faster and gain equity at a stupid fast rate.
you could probably get a loan for about $200k, assuming you have no debt.
i wouldn't borrow $200k on $44k/year, personally. i wouldn't even borrow $150k on that.
Agreed I think the most I'd borrow would be 132K (3x gross income). And even at that, I'd think I'd want a roommate or two for a few years to help pay down the mortgage.
One of the most important things you can do for your own personal financial security is to keep your total housing costs (mortgage, interest, insurance, & taxes) a low % of your gross income (25% or less. Less is definitely better).
It's irresponsible to suggest someone making $4400/yr ($2700 net monthly, not accounting for reduced net pay due to 401k contribution and health insurance) could take on a $160,000 mortgage ($200k with 20% down ='$850/mo mortgage).
Sheesh. Leroj said right in his post (that you even copied, no less!) that he wouldn't even take on a 150k mortgage. Please try reading the post you're responding to before you bite someone's head off!!!
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I think the most I'd borrow would be 132K (3x gross income). And even at that, I'd think I'd want a roommate or two for a few years to help pay down the mortgage.
