You now need to make $30 an hour for average OC rental (mortgages, loans)

[incognitoe]

Originally Posted by HyperionGap

Your agi is 55k but you are able to save 600k in two years? That math doesn't work...

However, with such low rent as you are paying now, financially it probably makes sense to never move out and just keep all your money in the stock market.

the benefits of being self employed.

[HyperionGap]

Originally Posted by incognitoe

the benefits of being self employed.

You need to speak with a better mortgage broker.

[k374]

Originally Posted by HyperionGap

Also, the most likely cause of a drop in the market is an increase in interest rates.

Keep in mind that an increase in interest rates will cause a SEVERE recession in the US, so that home may be 50% cheaper but most likely you will NOT have a job to afford it LOL! 8% interest rates right now would completely and totally devastate not only real estate but the broader economy... the market is hooked on cheap money, take that away and you have absolute carnage.

The interesting question is how long interest rates can be 4%? Japan has had ridiculously low interest rates for 2 decades, can it happen in the US as well? Who knows? Maybe.

[k374]

Originally Posted by ihatedcu

440k town home is over $3000 piti+hoa. If she has a car and credit card payment, she is well over 50% DTI. She is not getting a mortgage with that kind of income. Her gross income is $4583/month. You need to pay tax, social, disability and medical. Will bring her down to $3666/month. Piti+ hoa is $3100.
She has $566 left for insurance, gas, food, utility, phone, credit card or student loan.

No underwriter would approve that loan.

I don't know... could it be an interest only loan perhaps? Does FHA do that? I know for a fact that she put only 5% down, it was FHA, the condo costs $440k (as I verified the sales history on Zillow) and that her income was $55k + perhaps $3-4k overtime pay (which is consistent with her profession) so how is this possible? I don't know.

I ran it through an interest only calculator and the monthly payment on a $420,000 mortgage at 4% is $1,400 so that seems more plausible. Ridiculously risky but theoretically doable.

[HyperionGap]

Originally Posted by k374

Keep in mind that an increase in interest rates will cause a SEVERE recession in the US, so that home may be 50% cheaper but most likely you will NOT have a job to afford it LOL! 8% interest rates right now would completely and totally devastate not only real estate but the broader economy... the market is hooked on cheap money, take that away and you have absolute carnage.

The interesting question is how long interest rates can be 4%? Japan has had ridiculously low interest rates for 2 decades, can it happen in the US as well? Who knows? Maybe.

I doubt homes in prime areas will drop 50%. that didn't happen during the recession. Also interest rates don't double over night.

[OC Troll]

Originally Posted by HyperionGap

I doubt homes in prime areas will drop 50%. that didn't happen during the recession. Also interest rates don't double over night.

Agree, there might be a dip, but I don't forsee 50%. Interest will go up, they have in the last week. But I do wonder where it will be in the next five years. I don't think double but I'm guessing somewhere in the ~6%...?

[incognitoe]

Originally Posted by HyperionGap

You need to speak with a better mortgage broker.

I spoke with several Mortgage Brokers. All of them given the about the same quote. Based on my 55k agi for the past 2 years.

The only way I would qualify for a 550k is to get a co-signer, or put down more money or amend my tax return.

Which is why I am doubting that the girl qualified for 450k on a 55k salary with only 5% down.

Unless brokers are treating self-employed individuals differently from people with are employed by a company.

You can even go to an online mortgage calculator, and type in 55k as your salary, it says you qualify for a house that cost @250k....

Based on a 55k salary, and 5% down, you can only qualify for $113k...

Mortgage Qualification Calculator: How much mortgage might I qualify for?

[ihatedcu]

Incognito, you need to go find a portfolio lender that will service the loan in-house. The rates will be higher because its not backed by the government.

I doubt interest rate will go higher. If we look at Europe and Japan, their interest has been low for a long time.

[incognitoe]

Originally Posted by ihatedcu

Incognito, you need to go find a portfolio lender that will service the loan in-house. The rates will be higher because its not backed by the government.

I doubt interest rate will go higher. If we look at Europe and Japan, their interest has been low for a long time.

That's what I did. However, the Portfolio lender didn't have a 30 year loan. Only a 5 year loan I believe. The rates were higher and I decided to just pass on that.

[ihatedcu]

Keep looking