About to buy a house. Can I afford it? SCARED

DreamHouse · Joined: 06 Mar 2008 Posts: 4

[I don't know if this is where I am suppose to post this topic as I am new to the forum, so forgive me if it's not.
Okay,
My boyfriend and I have just signed a contract on a house pending the home inspection and whether or not we can get a loan. Well, I know I can get the loan...the inspection is tomorrow so we will have to wait and see how that turns out. When I signed that contract, my boyfriend and I loved that house. I guess my emotions got the best of me. Now, as I sit here and write out all my debts and what the house payment MIGHT be, I'm really scared. I don't know if I made the right decision. As I mentioned, the inspection is tomorrow. The sellers realtor left me a message and said she was going to meet my mother and me at the house at the time of the inspection. I don't have a realtor, by the way. I know, I know...dumb move. Anyway, that strikes me as odd, and I don't like it. It makes me uncomfortable that the sellers realtor would want to be present at the inspection. What do you think?

Also, I am going to give you my debt information, income, and possible house payments. By the way, I live in TN and the house I will buy is in GA.

Income: about $60,000/yr (boyfriend and I)
Sales Price of home: $108,900
Interest rate: 6 1/8, on 30yr fixed 0% down

Okay...now the HARD part:
Debts:
Credit cards: about $312/mo
Loan payment on car: $240/mo
Car Insurance: $160 for both
Comcast (we HAVE to have, according to bf) $160/mo
Pet expenses: $150/mo (I have several large birds whose food and toys are very expensive)

The house is in very good, solid condition from what I can tell (without the inspection), but the seller did say the last time he put the roof on was 20yrs ago. So, I will probably need a new roof within the next 5yrs. Also, the garage doors both need to be replaced. That can wait. Other than that, the house is in very good condition. Sorry this was so long. I've been up all night and can't sleep because I've been worrying non-stop about this new house payment. I'm used to paying $650/mo in rent. I hate renting but I have a lot more money to spend freely...and I do have bad spending habits that need to resolve. Thanks for listening. Do you think I can afford these payments? Am I worrying for nothing? :roll:[/color]

DreamHouse · Joined: 06 Mar 2008 Posts: 4

Also, is the interest rate of
6 3/8 good? The loan officer said this was a great rate for no money down and 30yr fixed. Of course she, the lender, would say that though. Sorry for all the questons. This will be my first home and am extreeeemely nervous.

m2c · Joined: 03 Aug 2005 Posts: 743

Have you seen a mortgage broker yet? Guesstimating what GA real estate tax rates are, I do no see you in bad shape AS FAR AS THE UNDERWRITER IS CONCERNED. Lifestyle is another matter; Pet expense, car insurance and Comcast don’t count for mortgage underwriting. I get approximately a 50% payment increase over current rent. Not bad but a local mortgage broker could give more accurate figures based on real estate tax rates.

6.375% is good for a 100% loan … if you can still get that rate given recent market moves. But, watch the fees, if any.

Watch out for the infamous “declining market” designation. It could be a killer for zero down. Have a broker run through an automated system to see if you’ll have to put 5% down. Also check out state “first time homebuyer bond” programs”; might save you money. Check out any “flub” grant programs. It’s that time of year when the flubs put out this money and it’s free money (usually around $5,000) with only catch is owner/occupancy for 5 years.

Am I a fan of zero downpayment for folks with no appreciable savings? No, but your loan will likely be approved. Then factor in your status as “roomies” and the roof situation (5 years to replacement; hey, 20-year life is more realistic. Look for an expenditure soon). Might be wise to get an written agreement so there’s some legal guidance if things go South. Nothing specific “against” you but I’ve seen nasty arguments develop too often.

Jason Hall · Joined: 07 May 2008 Posts: 10

DreamHouse how has everything worked out for you, did you purchase your home?

Maraisondetre · Joined: 17 Oct 2008 Posts: 8

"6.375% is good for a 100% loan … if you can still get that rate given recent market moves. But, watch the fees, if any.

Watch out for the infamous “declining market” designation. It could be a killer for zero down. Have a broker run through an automated system to see if you’ll have to put 5% down. Also check out state “first time homebuyer bond” programs”; might save you money. Check out any “flub” grant programs. It’s that time of year when the flubs put out this money and it’s free money (usually around $5,000) with only catch is owner/occupancy for 5 years. "

Granted this was from MArch, but is 6.375 in today's market good? It is not for a 0 down scenario and I was even told nothign for 0 down is available. What is declining market? And where can one find 1st time buyer bond programs? Where would one find/who can one ask about the free money with owner occupancy clause?

m2c · Joined: 03 Aug 2005 Posts: 743

One would kill for 6.375% and 0 today. Market has experienced substantial movement lately.\
At 670 with max of 10% down you’re looking at “hits” of 1.25 point (1.00 for FICO and 0.25 for adverse market) on the Fannie conventional side. Even though “up front” is 1.75% versus 1.25, a FHA transaction might be more cost efficient. FHA UFMIP is financeable and month MI is less. FHA can be used in conjunction with flub grants but to qualify for $170K house my guess is that you’ll be above 80% median income adjusted for family size. In any case that money is all gone for 2008 but will reappear again early (usually around March) next year. Any member of Federal Home Loan Bank can give you information. Members are typically, although not always, depository institutions.

And, yes, 100% mortgages are part of the past.