Quote:
Originally Posted by 3 Stripes
Thanks for the all the positive and negative feedback guys!
To add to my original post -
I am aiming for about 200k. I live about an hour away from chicago already and plan to stay here! You can get something really nice for 200k.
Here is an example:
As far as my "no money in the bank" statement - Income tax season is around the corner. Based on what I got last year and what my girlfriend has in the bank - We can put 10% down on 200k. Not much - But our real estate broker said it would be enough. Since our real estate broker is family - she will be giving us the money she makes if a sale is struck. That can then go back in to the original down payment.
Even with that being said - I still have 65k of loans under my name. Not sure how the bank feels about that. All i have to show is my Credit score and that i can keep up with the payments (even without my gf) with my current salary.
I know i'm young and can still wait for a home. Say i wait another 5 years until i have my car paid off and 3 years left on my school loans. The housing market will likely be back up - And this 200k house can potentially go upwards of 250k. Here is a pricing chart for the house mentioned above:
I will have to borrow more from a bank - but will have less loans to my name. Keeping the fact that it has the potential to move up to 250k - I will profit even more because the value of my property will go up and will have 5 years of payments - as well as having paid off my car and 3 years left on my school loans. The bank will have to lend me roughly the same amount (with or without waiting) at the end of the day don't you think? |
Ok now we can talk more since you are aiming for 200k range.
I don't know why people are saying that you can't afford the house because of your car and school loans. As long as you have enough income to cover, lender should be ok with it.
I assume you are making over $75k a year. If not, I doubt you will be qualified.
As for the down payment, if you are looking to buy a house soon after you receive your tax return, mortgage lender most likely will not count your tax return as valid source since it's not your average regular income.
You will have to wait about 2 months (depends on the bank) so they don't question the source of money. Or, you could give that money to your parents and have them pay you as a gift for the home.
Down payment rates depends on type of property assuming you are going with conventional loans. Lender will require 20~25% down payments for townhouse and condos, but you can buy the single house with 10% down without a problem. So factor that in.
Also, check the property tax. In some areas where taxes are high, they become huge additional payment to your mortgage.
As far as your comment about gaining value in your property, you are not thinking about mortgage interest. You can say your property value went up $50k but you should have also paid ALOT for your mortgage interest.
Since you are young, if you are thinking of moving within 7years, you can always buy a house with 7 yr ARM instead of 30 yr fixed. By going with 7 yr ARM, your mortgage payment will be reduced and you can sell the property before rate unlocks.
Difference in mortgage payment should level off the PMI you would be paying.
Lastly, don't try to get a mortgage from a big box banks. With your conditions, I doubt any of major banks will qualify you. You should hire a mortgage broker and get your loans from wholesaler. Big banks are hard to work with, and slow to work with. They are just PITA.