Low Mortgage Payment? (credit score, buying, income)

[Whatsnext75]

ok i looked him up- ha- and he put down 20%.

[Parsec]

Originally Posted by Whatsnext75

ok i looked him up- ha- and he put down 20%.

Creep

[Whatsnext75]

There's no way they could be 1200 a month. I just don't know why he'd say that.

[BostonMike7]

Based on $399K and 20% down, I guessed on some things and came up with a mortgage payment of $2250/month.

I used 3.8% interest and $4200 for taxes and $900 for home insurance. Don't know if he covered closing costs or rolled them in as well.




On the topic of cheap mortgages, the mortgage on my 1 BR I owned before was only $900/month. Add on Condo fee, insurance, electricity, gas and my expenses were $1200/month. I rented it for $1500/month without utilities.

I just sold that and am in the process of buying a house (sale pending). Right now, proposed mortgage would be 14-15% of our household income. Our mortgage (with 20% down) on a 3 BR home would be cheaper than some pricing we found for 2 and 3 BR apartments in the same area. (that includes taxes, insurance)

[Nobodybody]

For the average home owner, the term 'mortgage payment' typically includes the 'pure' mortgage payment, plus taxes and insurance, as these items are collected by the lender and held in escrow to ensure they are always paid on time. Also, when you have less than 20% equity in the home, you usually have to pay PMI.

So on your friend's 390k house, he put 61k down, leaving a mortgage of 329. His 'pure' mortgage payment would be about $1,380 / month in a scenario where he received a 3% fixed rate for 30 years. However, he could have gotten a lower rate using an adjustable rate mortgage, and could have possibly amortized over 30 years. However, on top of his pure mortgage payment, he would have taxes and insurance. Taxes vary by town, but assume on a 390k house taxes are 6000 per year, that is 500/month added. Insurance would probably be just under 100 a month, so tack on an extra 600/month to the 'pure' mortgage payment. Lastly, and the biggest bummer is, if he had PMI (which he wouldn't, in this case, due to the money down), that would add on another 200-300 per month, turning that pure 1,380 payment into as much as 2,280/month.

[Louisville Slugger]

The first year I moved into my condo I averaged about $1,270 per month (this includes principle & interest on my mortgage, condo fee, utilities, property taxes, and insurance). The second year I will average close to $1,290. These figures don't include prepayment since it's optional.

I am putting an additional $1,380 towards the principle of my mortgage per year. Not bad for an all electric 2 bedroom 1.5 bath condo.

Year 1 we had the sewer line replaced which set me back $1,300 and year 2 we had the driveway dug up, graveled, and paved, $1,417. Still cheaper compared to having to cover the total cost all by myself. We split it between units. The driveway will last a long time and so will the sewer line. The roof has been replaced and the house has been painted (before I bought the place) in the last 5 years so hopefully there's no big costs for the exterior of the condo in the near future. The driveway I knew had to be done before I moved in. The sewer line was a surprise (roots clogged the pipe). Just the joys of property ownership. I knew this though before deciding to take the plunge.

Yeah, I don't know how that $1,200 a month is possible.

[Whatsnext75]

Well I gave an update that I looked him up on that site mentioned above and he did put down a 20% down payment on a 399k house. Based on that I really don't see how it could be 1200 a month.

All I know is that he's said several times, oh my mortgage payment is only $100 more than my previous rent and he just said the other day that rent was $1100.

I agree that most people when they think of their mortgage payment it includes taxes and anything else. He doesn't have pmi if he put down 20%...but 1200 a month still doesn't make sense.

[robr2]

Does it really matter what he says or thinks his mortgage is? People exaggerate things in both directions. IMHO, let it go.

[Shutout]

Just ask him how he got a mortgage that low (out of curiosity). He'll probably give you more details like length of mortgage, type of loan, etc.

[Whatsnext75]

I could just ask him...maybe next time he brings it up i will.

Bottom line, i think he's leaving something out of the payments. He bought the house with a girlfriend maybe they each pay 1200? who knows, but 1200 on a 399k house that you put 20% down on does not make sense.