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Old 02-12-2019, 07:40 PM
 
8,414 posts, read 4,395,673 times
Reputation: 1931

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Hey there!
Have few questions my wife and I currently rent a 1 bdrm for 1060 a month. We were considering an upgrade to the 2bdrm for 1300 a month but we think we can obtain a mortgage for that much as well.

So we have decided to start searching for places. Nothing serious not planning to move for another 4 to 6 mo.'s.

Found a few interesting places that we decided to reach out to. When we were thinking of officially go house hunting find a realtor. That will lead into another question later.

Found 1 Condo, that might be considered for HUD. Price is around $80K been on the market for 3 months so thinking we could possibly go in with an asking price of $70K. Now did some research on mortgages we wouldn't be approved for a conditional regular loan. So being first time home owners curious how do you apply for an FHA Loan?

Now second question is can you go in not putting any money down? I mean with no money down our payments for a $70K condo be around $900 a month with taxes and HOA fees I assume. Tax rate is around 70% of the assessed value of the property where we are looking.

Now once you pay off a FHA loan can you rent the property?

Last question how do you go about finding a realtor that specializes with FHA properties? I tried Googling it and came up with zilch.

Thanks a bunch I appreciate the feedback.
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Old 02-12-2019, 09:04 PM
 
Location: Research Triangle Area, NC
3,341 posts, read 2,282,591 times
Reputation: 4794
Quote:
Originally Posted by RunD1987 View Post
Hey there!
Have few questions my wife and I currently rent a 1 bdrm for 1060 a month. We were considering an upgrade to the 2bdrm for 1300 a month but we think we can obtain a mortgage for that much as well.

So we have decided to start searching for places. Nothing serious not planning to move for another 4 to 6 mo.'s.

Found a few interesting places that we decided to reach out to. When we were thinking of officially go house hunting find a realtor. That will lead into another question later.

Found 1 Condo, that might be considered for HUD. Price is around $80K been on the market for 3 months so thinking we could possibly go in with an asking price of $70K. Now did some research on mortgages we wouldn't be approved for a conditional regular loan. So being first time home owners curious how do you apply for an FHA Loan?

Now second question is can you go in not putting any money down? I mean with no money down our payments for a $70K condo be around $900 a month with taxes and HOA fees I assume. Tax rate is around 70% of the assessed value of the property where we are looking.

Now once you pay off a FHA loan can you rent the property?

Last question how do you go about finding a realtor that specializes with FHA properties? I tried Googling it and came up with zilch.

Thanks a bunch I appreciate the feedback.
Unless you live in an area with REALLY high property taxes and/or the HOA fees for that condo are way above average... I think your monthly payment calculation of $900 on a 70k mortgage is pretty far off.

I own a condo with a loan amount of $105k and PITI is under $650. Add the HOA fees and it brings it up to just under $850.

Even if the taxes/HOA does make your payment for said condo around $900 ....that's still over $100 less than you're paying in rent now isn't it?

FYI an FHA loan requires 3.5% down. On a 70k property that is $2450. If $2450 is too much for you to put down....you probably shouldn't venture into homeownership just yet.

I believe for FHA loan you must live in the property as your primary residence for at least 3 years before you can rent it out. Double-check with your lender to be sure.

Many lenders also have a 3% down conventional option for first-time homebuyers.
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Old 02-12-2019, 11:11 PM
 
Location: Wasilla, AK
6,502 posts, read 3,569,400 times
Reputation: 13469
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.
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Old 02-12-2019, 11:30 PM
 
Location: Wyoming Michigan
35 posts, read 11,537 times
Reputation: 39
A couple things to mention. Condo associations need to be approved for FHA loans. They need to meet certain criteria for a buyer to obtain a FHA loan. Check on that. A great Realtor or Lender can help you with that.
Also double check the association by-laws and other related documents on whether or not they allow rental of the units. Many will not.

Can I ask why you can obtain a conventional loan? I only ask becasue if you are thinking that you wish to purchase in a few months, a quality lender can set you up to rebuild
Or repair your credit so that you can obtain a conventional loan in the very near future. FHA is a great program for those who do not have orher options but having a conventional loan is better IMO.
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Old Yesterday, 05:00 AM
 
Location: The Triad (NC)
27,613 posts, read 59,727,121 times
Reputation: 30679
Quote:
Originally Posted by RunD1987 View Post
Have few questions my wife and I currently rent a 1 bdrm for 1060 a month.
We were considering an upgrade to the 2bdrm for 1300...
How do these numbers compare to your WEEKLY take home pay?
Are you maxing out the retirement and savings too?

Quote:
So we have decided to start searching for places.
...can you go in not putting any money down?
Really?
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Old Yesterday, 06:16 AM
 
Location: Mooresville
5 posts, read 1,067 times
Reputation: 10
Your best bet is to work with a mortgage broker first because they know all the special programs for first time home buyers, and there are many. A broker will look at your credit, income and see which program fits your needs. If you go out and try and see what you can afford, you may end up short changing yourself because you don't have all the information. My mortgage broker was amazing and taught me so much. I'm happy to share her info if you would like. Congrats on working on home ownership.
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Old Yesterday, 06:27 AM
Status: "The days are getting longer" (set 15 days ago)
 
Location: Willamette Valley, Oregon
3,360 posts, read 877,758 times
Reputation: 4691
There used to be a rule of thumb about mortgage costs not exceeding 30% of your gross pay. That might also have been net pay which would certainly make a difference.


Good luck on whichever way you go!
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Old Yesterday, 07:47 AM
 
Location: Northern Virginia
4,875 posts, read 5,076,282 times
Reputation: 11746
Quote:
Originally Posted by RunD1987 View Post
Hey there!
Have few questions my wife and I currently rent a 1 bdrm for 1060 a month. We were considering an upgrade to the 2bdrm for 1300 a month but we think we can obtain a mortgage for that much as well.

So we have decided to start searching for places. Nothing serious not planning to move for another 4 to 6 mo.'s.

Found a few interesting places that we decided to reach out to. When we were thinking of officially go house hunting find a realtor. That will lead into another question later.

Found 1 Condo, that might be considered for HUD. Price is around $80K been on the market for 3 months so thinking we could possibly go in with an asking price of $70K. Now did some research on mortgages we wouldn't be approved for a conditional regular loan. So being first time home owners curious how do you apply for an FHA Loan?

Now second question is can you go in not putting any money down? I mean with no money down our payments for a $70K condo be around $900 a month with taxes and HOA fees I assume. Tax rate is around 70% of the assessed value of the property where we are looking.

Now once you pay off a FHA loan can you rent the property?

Last question how do you go about finding a realtor that specializes with FHA properties? I tried Googling it and came up with zilch.

Thanks a bunch I appreciate the feedback.
To get the best, most accurate information, your first step should be to speak to a mortgage lender. They will review your finances to determine what loan programs are best for you, and for the properties you're interested in buying.

Also, it is my personal opinion that one should set their housing budget below the pre-qualification/pre-approval amount because those numbers don't take into account all of your living expenses.

You could seek recommendations from friends/family that have recently been through the process or if you're a member of a credit union that offers mortgages, you can start there.

When looking at condos, be sure not to forget to factor in COA fees as that will be a financial obligation that you should consider as part of the mortgage (the cost to own the home).
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Old Yesterday, 08:50 AM
 
Location: Raleigh NC
8,359 posts, read 6,568,992 times
Reputation: 7483
Quote:
Originally Posted by Willamette City View Post
There used to be a rule of thumb about mortgage costs not exceeding 30% of your gross pay. That might also have been net pay which would certainly make a difference.


Good luck on whichever way you go!
the rule of thumb with the lenders is of your GROSS pay - 28% mortgage, 36% total debt obligations.

and the OP needs to STOP and talk with a lender or 2 first to see:

1. are they credit-worthy
2. what funds they can expect to need for closing (downpayment & cc's)
3. by lender, what special programs are available now (and may be 4-6 mos from now) for 1st time buyers.

after that ...

let's say you know a general purchase price. Figure out what's available/has recently sold in that range. If you see a CND community that you like and may work - check with the lender to see if THAT particular community is "conforming". Because if it's not, you can scratch that place off your list.
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Old Yesterday, 11:29 AM
 
8,414 posts, read 4,395,673 times
Reputation: 1931
Total take home income is $95K and $75K after taxes
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