New Condo/home Purchase possibility??

tommyoc · Joined: 08 Jun 2007 Posts: 5

How is everyone. I Have been lurking the internet for some time pondering about the possibility of me being able to get a loan. Any advice or thoughts are appreciated.

My Credit Scores vary between 730-750.
I'm 23 years old with 1 year of post-college income($44,800), but I've worked in my field part time for the better of 5 years(~10k a year or so).

Unfortunately, I live in a town thats pretty expensive(New Jersey) and only really forsee condo's as affordable living.

The low priced 1 Bedroom condos run 180-220k. Housing is 220k+

Mortgage calculators vary with my income from 70k-160k

My debt is as follows:

290 Car Payment
120 Car Insurance
280 School loans (Still deferred because I am working towards my Masters)
That Puts me at 680$ total debt and 570$ of credit worthy debt.

I don't really have much to put down/cover closing. Say in the market of 3k or so..

Is my downpayment hurting me the most? Or will I be able to purchase a home at any rate? I usually can save around $1600-1700 dollars a month currently. I have yet to meet with an agent or loan officer, but it is in my near future. Any help??

Haplo · Joined: 20 Jan 2005 Posts: 2406 Location: Springfield, IL

If your income is $44800, that's $3733/mo.

Your total ratios should be around 1/3 if you can manage it, but if you are in an area like you are that can be difficult to accomplish. In some cases you can get as high as 50%. I generally prefer to use FHA's guide of 43%.

With that, your total monthly debt could not exceed $1530. The student loans won't count as long as they are to be deferred for 12 months or longer. Your $290 would have to be included, so that leaves you $1240. I'm not sure how much your taxes are in Jersey, but that's leaving you stretched thin. Lets say you did an interest only, I'm just going to use 6% because it's an easy one to figure. At 6% 144,000 (80%) = $720 $36,000 @9% (20%) = $270. That's a total of $990, and those are just rough estimates (I didn't look at the actual rates, so I'm not sure if the 9% is low for the 2nd or not.) If you add in your taxes and insurance, you're getting *very* close on the numbers, and that's in the low end, and without paying any principle. If you were looking at a 30 year fixed with principle included, you'd be well over that.

Do you have a family member that would sign with you for the purposes of income?

Also, you'd likely need to get closing cost assistance from the seller or from a family member as east coast loans are fairly costly. $3,000 may very well be short for your area. I've not done a loan in Jersey for almost 2 years, so I don't recall exactly how much those costs would be.

tommyoc · Joined: 08 Jun 2007 Posts: 5

Thanks for your reply!

I unfortunately do not have the ability to use a family member as a co-signer. There is an option of having to go in with a close friend, but then housing would have to go up to 2 bedroom and cost significantly more and the headaches attached to the scenerio.

Is that my only option?.. The only affordable living in new jersey is areas you do not want to live! I can surely save up more down payment, but will that make that much of a difference? I would like to move out soon.

If I were to look in neighboring towns for lower housing costs.. What would be a reasonable price I can afford and be approved for?

I don't want to Live for my mortgage either- although taking a part time job for other income is an option. I wonder how anyone goes into housing along in New jersey with a median salary job! haha

Thanks for all your help so far!!

chow · Posted: Sun Jun 10, 2007 10:08 am Post subject:

If you don't want to live for a mortgage payment, then find something that you can live with. You are only 23. You have some time on your side because you already know where you don't want to live. Who knows-you may relocate, you're only 23! :wink:

Save more money, and keep looking or consider looking in an area where the housing is more in tune to your income/career.

Greg Phillips · Joined: 13 Dec 2005 Posts: 85 Location: Chillicothe, Ohio

Just a thought. What about purchasing a 2 unit property in which you can use the rent from the other unit to supplement your income and qualify for the house more easily?

Later on you could move out and rent your unit while the house pays you money then buy another home. Or sell it it you prefer.

You could qualify now but I think it is just a little tight.

What are you paying for your housing now?

If a mortgage on a home will be more expensive then I kind of fear for you buying a home that is a higher payment because you mentioned you do not have any downpayment. Does that mean you do not have any savings or does it mean you have savings but do not want to exhaust it?

tommyoc · Joined: 08 Jun 2007 Posts: 5

Well, I was under the impression that a 2 unit property would be harder to qualify for as the price would be significantly higher. Not to mention in the area where I live they are not as easy to come by.

I'm currently renting- that is why I want to get out of my situation asap.

I do have a small amount of savings, but no where near 10-20% of a purchase price for the housing in my area.

Thanks for all your replies so far! I'm still dilegently looking!

tommyoc · Joined: 08 Jun 2007 Posts: 5

OK - Update, Have had a few options change for me and a few more things researched. Maybe you guys can help me further.

My current salary increased to 48000/year. I also have about 5k to put down along with an excellent credit score. I am still hesitant to apply for a mortgage due to the inquiry on my report.

Could someone send me some more info on a dual family also??

Thanks for all your help so far

tommyoc · Joined: 08 Jun 2007 Posts: 5

bump ... any help?

still saving but its getting closer and closer to having to leave where I stay.. have almost 9k saved up..

chow · Posted: Mon Sep 17, 2007 11:27 pm Post subject:

You are young and single. Get something that won't strap you, shop for a good deal. There should be some good deals coming up as people let their eyes outspend their wallets and got into option arms.