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.
Do not buy a home without having some savings built up (that you are not putting into a down payment). Home ownership comes with unexpected costs. Things break and need repaired immediately.
Your income is too high to qualify for a Fannie Mae HomeReady loan with a max LTV of 97% (that's putting 3% down), but Freddie Mac has a 97% LTV loan without an income limit. It's called HomeOne. FHA has a minimum down payment of 3.5%, so you could do that, too. As a previous person said, if you can't afford a down payment of around $2500, you may not be ready for home ownership.
With your income, you should easily qualify for a mortgage for the purchase price you're looking at. You'll likely qualify for more, unless you have a lot of debt we don't know about (student loan payments, credit cards, auto loans). Debt-to-income (DTI) calculations are done on gross income, not net. Most loan programs require you to be under 50% DTI. FHA can go higher, but it's not recommended. You're going to be house poor then.
Why do you think you won't be approved for a conventional mortgage? Is it your credit score? Conventional loans can accept down to a 620. They're not going to be much different from FHA.
Go talk to a mortgage broker or loan officer to find out what you actually qualify for. You can get preapproved and really be ready to shop once you collect a down payment and money for closing costs (you can structure your offer to ask the seller to pay closing costs up to 3% of the purchase price).
As to whether a condo is a good idea, I don't know your area and what the price difference is between a condo and a single family residence, but I will echo what another person said about FHA loans and condos. They have an approval requirement that adds time and expense to the loan process. Condos are also going to have a monthly HOA/COA fee that may be prohibitive. In many cases, once that's factored in, you're better off buying a house. For instance, where I live, you can get into a fairly nice condo for $275k. But the HOA fees can be upwards of $500 a month. So it doesn't make sense to do that when you can buy a comparable single family residence for $295k.
Anyway, going to a lender for a preapproval is the only way to know for sure what you can qualify for, and I recommend doing that before you start looking at homes.
Total take home income is $95K and $75K after taxes
That's ~21% of gross and deducting another 15% for the save/invest accounts...
puts the annual net at ~$61,000 or weekly net at ~$1173
If you haven't seen the posts before...
I've suggested repeatedly that this WEEKLY amount as the targeted MONTHLY housing budget.
(to include utilities and the dozen other common expenses beyond rent or mortgage).
All to say that your current $1000/mo rent is about right.
And that's enough to afford a bit less than a $200,000 mortgage
(depending on RE taxes mostly)
---
Tighten the belt, sell some stuff, work some OT etc...
and start saving up a responsible down payment and reserve fund.
You could be buying in less than a year.
Last edited by MrRational; 02-13-2019 at 12:14 PM..
Might stick to renting
Rebuild our credit
The condo considering buying is for rent for 1300 so might do that instead
Or stick with the $1060 condo and put that extra $240 a month toward savings. This will help by building your savings but also conditioning your budget/spending habits to having a $1300 payment.
Total take home income is $95K and $75K after taxes
Yes you will qualify for an $80K condo unless you owe a lot of money on credit cards, car loans, student loans etc. They take your gross income into account not net.
It also depends on the HOA monthly fees, that plus the property taxes and insurance factor into your payment.
You can't get an FHA with zero down but it's only like 3 or 3.5% down which is like $2,400 on an 89K condo.
Closing costs can be high like up to $10K especially if they ask you to put a years worth of HOA fees
I searched and it said it's hard to get approval for a condo with FHA.
You property taxes should not be that high unless you are in a really high property tax state.
Good luck the first step is to see if you can be approved in the first place. Might be better to find a small house instead.
and yes once you pay off an FHA loan or any loan you can rent the house, I think after a year you may be able to rent out an FHA home, but if it's a condo it's up to the condo board to let you rent it out or not.
As far as a realtor who specialized in FHA I doubt any do, but they should all know how to help a buyer who wants to buy with an FHA loan. .
Not sure if it applies in your case or not but thought it might be helpful for others to know. Closing costs still have to be paid by buyer unless being covered by seller for some reason.
At this stage of your life, I would avoid a condo if at all possible. It's basically an apartment that's a lot harder to walk away from. And you can never tell when a special assessment suddenly hits you and dues have a nasty habit of creeping upward year after year. I'd look for a single family home in an area where property values are likely to go up over the years. I sold my starter home for almost double what I paid for it 15 years later.
And this information is specific to your area.
Is the OP in your area?
In many markets SFH are out of reach for many people or there just aren't a lot available.
Or stick with the $1060 condo and put that extra $240 a month toward savings. This will help by building your savings but also conditioning your budget/spending habits to having a $1300 payment.
Rental place is too small
It is a aparment building too thats a bit old and outdated
Want to upgrade to a 2bdrm
There is a 2bdrm with utilities included but not tired of this place.
Hoping to move to a place where it be larger, less noisy, and easier for guest to stay over.
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.
