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Old 08-31-2011, 03:20 PM
 
364 posts, read 1,078,924 times
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Looking for some advice:

I'm recently started in the work-world and looking to buy a house. My current take home is 2500 a month without OT. With OT sometimes close to 3000 per month. I am looking at a house that would have mortgage/insurance/taxes of 1080 per month. Would this be possible? I have no other debt aside from other fixed monthly payments. Any help would be great. Thanks
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Old 08-31-2011, 03:25 PM
 
Location: Salem, OR
15,539 posts, read 40,308,808 times
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Quote:
Originally Posted by mi26 View Post
Looking for some advice:

I'm recently started in the work-world and looking to buy a house. My current take home is 2500 a month without OT. With OT sometimes close to 3000 per month. I am looking at a house that would have mortgage/insurance/taxes of 1080 per month. Would this be possible? I have no other debt aside from other fixed monthly payments. Any help would be great. Thanks
Your total to debt to income ratio shouldn't exceed 30% of your income. You should look closer to $750 a month and that would assume you would never buy a car or anything that would have regular payments.

You also need to get some work history so if you recently started and this is your first "real job" then you will have to wait 1-2 years in order to buy a house.
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Old 08-31-2011, 03:27 PM
 
Location: A little suburb of Houston
3,702 posts, read 18,182,878 times
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What are your other fixed monthly payments? Those may be counted as debt. What amount do you have for a down payment?
You really need to have a work history and a good down payment and rainy day fund set aside.
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Old 08-31-2011, 03:54 PM
 
364 posts, read 1,078,924 times
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I have 20%. I've been in my job for a year and a half, but have "worked" since I was 16.

My other expenses are just car insurance/cell phone which are 140 per month combined. Everything else would be just bills like cable/internet, electric, water, food, etc.
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Old 09-01-2011, 03:20 AM
 
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you can have a mortgage of 30% of your gross pay, not take home and your overall debt to income which would just be car payment, student loans, credit cards, not insurance or cable,etc cant exceed 45% although they can always change those numbers if you have good credit and a good down payment. They are going to want 2 years of w2s and want to see that you have been employed in the same line of work for 2 years

Here is an excellent calculator for what you qualify for. you can change it by payment, income, or house cost at the bottom

https://tdbank.mortgagewebcenter.com...alifier&PID=78
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Old 09-01-2011, 02:56 PM
 
Location: Morrisville
1,168 posts, read 2,499,393 times
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The general rule of thumb that I use with people to get them in the ballpark is that for every $1,000 you finance it's roughly $7 per month.

By that logic a $100,000 house would be roughly $700 / mo in mortgage.
$200,000 = roughly $1,400/mo

Now this does not take into account taxes, insurance, HOA, etc. but it should get in looking in around the right price range.

Your best bet is to go speak to someone about mortgages and see what programs are available to you.

good luck!
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Old 09-01-2011, 04:35 PM
 
458 posts, read 1,668,380 times
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Quote:
Originally Posted by BiggJoe4181 View Post
The general rule of thumb that I use with people to get them in the ballpark is that for every $1,000 you finance it's roughly $7 per month.

By that logic a $100,000 house would be roughly $700 / mo in mortgage.
$200,000 = roughly $1,400/mo

Now this does not take into account taxes, insurance, HOA, etc. but it should get in looking in around the right price range.

Your best bet is to go speak to someone about mortgages and see what programs are available to you.

good luck!

Wow, that $7 for every $1000 you finance was spot on for me! Ended up being $22 over what my actual payment is (Including taxes and insurance.) Cool.
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Old 09-01-2011, 05:14 PM
 
Location: Boise, ID
8,046 posts, read 28,418,388 times
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Quote:
Originally Posted by BiggJoe4181 View Post
The general rule of thumb that I use with people to get them in the ballpark is that for every $1,000 you finance it's roughly $7 per month.

By that logic a $100,000 house would be roughly $700 / mo in mortgage.
$200,000 = roughly $1,400/mo

Now this does not take into account taxes, insurance, HOA, etc. but it should get in looking in around the right price range.

Your best bet is to go speak to someone about mortgages and see what programs are available to you.

good luck!
Haha, your $7 per $1000 financed is within a $7 of my current PITI payment (yes, including taxes and insurance)...dang close estimate, at least in my case
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Old 09-01-2011, 11:32 PM
 
2,059 posts, read 5,738,404 times
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The problem with buying at the top of your budget is it doesn't allow room for unexpected costs or things like tax raises.
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Old 09-02-2011, 04:16 AM
 
Location: MID ATLANTIC
8,669 posts, read 22,853,798 times
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To the OP: you're seeing the result of cookie cutter underwriting.....my answer is going to differ. IF your credit is excellent, and IF you are paying rent now (especially if close to the proposed mortgage payment), IF you show you have a restrained use of credit, and IF your lender can get a DU "Accept/Eligibile," then yes, I think you will be able to obtain a mortgage. I really believe with 20% down is going to make your situation a done deal. Another factor would be how much of that 20% was saved in the past year. Let's say that down payment was saved over the past year - if it was in addition to paying rent, it's a huge comp factor. And if it's in lieu of paying rent, it could be considered the same as paying rent or a making a mortgage payment, should you not be paying rent.

So, if you are telling us you've been socking away $1000 a month in savings, then yes, you can afford $1000 in a monthly payment.
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