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Me and my wife are getting ready to buy our first home. Currently, we rent (1,600 a month) and have saved $21000. 15k of this will be for the down payment and the rest for closing costs. I imagine we will need 2 months asset payments which we have too.
We plan on buying a home between 295k-300k, with taxes on the properties at about $8500-$9500 annually.
I currently make 45k a year and my wife makes 53k a year. she did some tutoring last year to help save for the down payment which i believe totaled 12k, which we rightfully claimed on our taxes this past April.
So, total combined income is 98k, but lets round down to 95 just top safe!
total monthly debt:
Just my car payment at $276.00 (lease)
her student loan which $172, Fixed Rate.
2 credit cards totaling 8k - total monthly payments on these two equal $279 (will be down when we apply in early june)
total monthly debt = $727
I was promoted in March and now make a little over $23 an hour which I believe totals to about 45k a year (full time) at a bank.
Before i was promoted i made about $20.50 an hour which was about 41k a year i believe, same company.
Before that i also worked for the same company making about 14.50 an hour. I was promoted early July of 2015 and then again 2 months ago in March to which i now make a little over $23 an hour.
My wife has been working at her job (teacher) for 3 years, actually going into her 4th year when school starts up after this summer. She doesn't get paid for the summer, but she always saves more than enough for the summer.
My credit score is 730 and hers is either 767 or 777, i cant remember, but we both have great Fico scores with no past dues, lates or anything bad on our reports.
With everything i mentioned above, do you think we will be good to go when buying a home? We have enough for a down payment (less than 20% but will is at least the 5% min for standard), we make good money and have strong Fico scores..
Yes, your deal looks to be approve-able. As others have mentioned, you are 'pushing things a bit' with a purchase of this caliber, but it looks like it would be approved. To the naysayers, it also looks like you will both continue to earn more $$ in the future.
15k of this will be for the down payment
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We plan on buying a home between 295k-300k
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I currently make 45k a year and my wife makes 53k a year.
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do you think we will be good to go when buying a home? [/quote]
No. You do not make enough money to support a house of that cost.
I hear this talk about "buy a house that you can afford on one income" and while i understand the premise of this, it just isn't reality for most people. My wife and I together make 135K a year. I make the larger salary by quite a bit. So for this theory to work, we would have to buy a house based on the lowest income of the two. If we based it off mine and something happened, she would still not be able to afford the house payment so that does no good. So we would have to buy a house, big enough for 5 of us with an income of 46K a year. Or about a 110K house, in Houston TX.. sorry, not going to happen. This theory is fine if both make a decent income or close to each other's income. A house in a huge investment of time and money so I say get a house you enjoy and love to be in and enjoy it.
It absolutely is reality. What isn't realistic is burying your head in the sand and shrugging off the possibility that one (or both) of you may lose your job, or God forbid, die.
You're more than free to make the decision that your need for a "nicer" home outweighs being smart about your finances, but in the end, it is you who will be ousted from that home you enjoy when the bank comes a-calling.
So, you think there are a lot of mortgage lenders who deny approve-able deals?
Are you insane? Of course there are.
No decent lender is going to sign a $300k home over to a couple that makes less than $100k combined and is only putting 5% down. Not to mention that $8k credit card balance.
I think a lot of people here are much more conservative than average in terms of what they consider an affordable monthly housing payment, and in a lot of cases, they live in lower cost areas and have no idea that you can't actually buy something for the kind of payment they consider affordable.
However, having said that, I think 300K when it comes with 9000 in taxes is pushing it. I mean, yes, you'll likely get approved, but it's still going to be a very tough budget.
As for the whole "live on one income" idea - single people supposed to what, then? Not live at all? If two people are income earners, it's not unreasonable to base their lifestyle on both of their incomes. If something happens, they will figure out ways to make it work, just like a single person does. Sure, it's nice when one person in a couple earns enough to support the family and the second income is "extra" but that's not reality for a lot of people unless that person is a very high earner or you live in a low cost area or some combo of the two.
No decent lender is going to sign a $300k home over to a couple that makes less than $100k combined and is only putting 5% down. Not to mention that $8k credit card balance.
They're not going to take that chance.
I disagree. IF they fall within the guidelines, then they will approve it. The question becomes do they fall within the guidelines (credit score, DTI, past payment history, etc). If they do, why would they not approve the loan?
I think a lot of people here are much more conservative than average in terms of what they consider an affordable monthly housing payment, and in a lot of cases, they live in lower cost areas and have no idea that you can't actually buy something for the kind of payment they consider affordable.
However, having said that, I think 300K when it comes with 9000 in taxes is pushing it. I mean, yes, you'll likely get approved, but it's still going to be a very tough budget.
As for the whole "live on one income" idea - single people supposed to what, then? Not live at all? If two people are income earners, it's not unreasonable to base their lifestyle on both of their incomes. If something happens, they will figure out ways to make it work, just like a single person does. Sure, it's nice when one person in a couple earns enough to support the family and the second income is "extra" but that's not reality for a lot of people unless that person is a very high earner or you live in a low cost area or some combo of the two.
It absolutely is reality. What isn't realistic is burying your head in the sand and shrugging off the possibility that one (or both) of you may lose your job, or God forbid, die.
You're more than free to make the decision that your need for a "nicer" home outweighs being smart about your finances, but in the end, it is you who will be ousted from that home you enjoy when the bank comes a-calling.
We will just have to agree to disagree. I do not think it is reality at all for most people to base their home buying on one income, nor should they if there are two income earners. Yes, someone could get sick, some one could lose their job, someone could die, OR, none of that could happen. These are the chances we take, its called living life. Now, I am not suggesting anyone should buy above their means, but really, everyone has to decide what that is based on their lifestyle. I choose to drive an older car, take only 1 vacation per year and never use credit cards for anything so I can save more money and own a nice place that I call home and this safe for my kids with a good education center. Now if I still lived in Mississippi and we made the same money we do now, it would be very feasible to buy a decent house based on one income. In Houston Texas, not so much when the average cost of a house in our area is 344K (i brought this number down, i didn't buy near that price point).
I disagree. IF they fall within the guidelines, then they will approve it. The question becomes do they fall within the guidelines (credit score, DTI, past payment history, etc). If they do, why would they not approve the loan?
Ok Cool According to the formula posted in that article, the OP could target a house at 341K, so buying one for 300K should be no issue.
But you didn't answer the question i posed: IF(Big IF), they fall within the lending guidelines, why would lender deny their loan? Because the lender doesn't feel like its a good idea? I laugh at that idea.
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