My wife and I are considering home ownership. We are sick of throwing money away on rent and living on someone else’s terms.
This would be our first home, we are both fairly young (I’m 25 and she is 21) and I am wondering if financially we can do this.
We make about $46,000 per year. I work part-time and attend school, while she is a college grad and works full-time. I have school paid for by the Air Force so that is not a problem, however, I wonder if we make enough money to afford a mortgage payment?
For you people out there who have been paying mortgages and have experience, what do you consider a good “buffer zone” of money each month, i.e. how much extra money do you have after paying all bills at the end of the month? I am trying to gauge our financial situation with someone else’s who has been doing this for sometime.
Also, do you think a townhome is worthwhile? I know they can be kind of hard to get out of sometimes but we would probably be living there for quite sometime.
Oh, and we do not have children. Only a cat.
Thanks for the input in advance!
Missoula Montana Commercial Real estate
Ida Slapter Says:
April 4th, 2009 at 10:30 amVisit Ida Slapter
walk in bathtubs s
Now is a good time - you can get really good deals. I would just make sure that it is a mortgage that could be paid if only one of you was working. Don’t forget that taxes and insurance can/will always go up and that you will need money for repairs. But the tax write-off really helps.
Not to me cause I would rather have a yard. If you choose a condo you will have association fees and have to get permission to make certain improvements.
Try a mortgage calculator for monthly payments.
Chad S Says:
April 4th, 2009 at 5:47 pmVisit Chad S
Semi truck parts
You will still be living on other peoples terms with a towhouse.
richie perez Says:
April 7th, 2009 at 6:54 pmVisit richie perez
Commercial Real Estate San Diego
First of all, congrats on thinking this trough while being young… The income you both get annually is a bit low, and that is the most important thing that will affect your decision. You have to remember that the ability to make your payments only relies on you: based on how much is the value of the credit (value of the house + interests) and how long is the term of it. I suggest you start looking for houses to see what you’re interested in, and to get a range of prices so you know how much would you need to ask for; then make a detailed analysis of your personal finance (how much you earn, how much you spend and how much could you save if you really commit to it); finally, after you have all this information, go to a financial planning office so they help you make a payment plan according to your situation, and to see if you are ready or not to go close a deal with a mortgage company.
?AstrologerJuliAnne? Says:
April 10th, 2009 at 1:13 pmVisit ?AstrologerJuliAnne?
Malibu homes
Are you in the Air Force? Can you get a VA loan? I would say not knowing your debt, that you might be able to swing a 135-140k house. Depending on where you live, this can be a shack or a decent detached house. Unfortunately, without knowing your financial situation, I doubt anyone can give you a buffer zone. Some people have a grand left over every month, some have $1. LOL
In a townhome, you are going to have HOA dues, and you will not be able to *live on your terms* per se. They have rules that will dictate how you decorate the outside of your house, your landscaping, the color of your house, what kind of vehicles you can park in the driveway, what type of fence you can put up…etc…I would try to find a detached house if you can afford it, as they are easier to sell when the time comes, and you don’t have to be dictated to on how you want to decorate the outside!
kemperk Says:
April 12th, 2009 at 3:40 pmVisit kemperk
Brigantine real estate
a; find an exclusive buyer’s agent and if none exist,
find a buyer’s agent and never let that person
rep the seller too [called dual agency]
b; call your county treasurer and see when your county
is having its annual delinquent real estate tax sale.
[if you find one, it is debt free at close; no mortgage needed
–
c; have your buyer’s agent get you to a good mortgage broker
and do not accept any fees out of your pocket; for nothing–can come out of the loan.
available to guide yoiu
loanmasterone Says:
April 15th, 2009 at 9:44 amVisit loanmasterone
Missoula mt Commercial Real estate
The first thing you need to do is get pre-approved for a mortgage loan. It appears as if you were in the military at one time therefore you could possible be qualified for a VA loan.
Buying a home under VA you will not be required to come out of pocket with any money unless you so desire. The seller pays all closing cost.
Buying a town house might be a problem as you should check the by-laws and a document called the CC&R’s to see if they allow animals.
Buying a town house mean you are buying a property that has a Home Owners Association (HOA). This association has rules and laws that tell you things that are allowed and not allowed withing this complex.
You also have to pay HOA dues each month to this association in addition to your mortgage, and interest. You also have to pay taxes. Your insurance is paid through your HOA.
The buffer zone you are seeking will be worked out for you by the mortgage banker/broker that you apply for to get your mortgage loan. There is a certain ratio that you will not be allowed to exceed. They will tell you this amount.
There are many things you should do, but the first thing you should do is contact a mortgage broker that does VA and FHA mortgage loans and get pre-approved. This is the first step. Once you have your pre-approval then contact a real estate agent to look at house based on what you are qualified to buy.
There are a few documents you will need, but one call to a mortgage banker will get you the information about what you will need and when it is needed.
This pre-approval will tell you the amount of house you are qualified to purchase as well as the interest rate, monthly mortgage payments and other necessary things you need to know about your mortgage.
I hope this has been of some use to you, good luck.
“FIGHT ON”
tadpoleInSpace Says:
April 18th, 2009 at 8:30 amVisit tadpoleInSpace
business cash advance
Buying a house is good if you are planning for long term. You should plan to live there at least 5 years. Shorter than that would be hard to recovery to closing cost and a bunch of other costs. With your income you probably can afford 110k house, but in this economy I would not try more than 95k. Mortgage & insurance would probably be anywhere $700-900 a month. Depending on how big the house and your habits, the utility cost (water, gas, electricity, etc…) $150+.
golferwhoworks Says:
April 18th, 2009 at 2:26 pmVisit golferwhoworks
Huntsville Real Estate
not Truly enough info. How long on jobs for both of you and what are your monthly bills on credit cards and cars and other loans? these go into making up your debt ratio.
Get with a mortgage broker/banker in your state and get pre qualified to buy as it is a good time to make the investment. Know this that FHA requires 3.5% down payment but if in the Air Force you may be able to go VA
I am a mortgage banker in TN & KY
Mari Says:
April 20th, 2009 at 6:57 amVisit Mari
Carmel Valley Real Estate
Hi I could relate to you…
My husband (25) and I (21) haven’t bought a place per say since we both are students and work full time. We have a combine income of $70K and to honestly tell you we like to stay within a price range below $1100 a month.
What I decided to do since homes are so affordable at this moment. I decided to ask my brother for help. Obviously there is something for him. I too am tired of renting places from people that I don’t know and helping them out. I ask my brother to buy a place in exchange I will rent it from him for a minimum of 2 years. At the end I am helping him out but I get a place that I want to live in.
We just started searching and are looking at 2 bedroom town home. It does have an association but they allow pets etc. the town home was built in 2004 with an asking price of $95K. I know alot of people here are saying but a stand alone house but the truth is those get expensive, most of them have 3+ bedrooms and if you don’t plan on owning this property for a good 10 years no point since what you can afford will probably get you a house that needs some work.
Like someone said, Get a pre-approval and they will tell you how much they can lend you and go from there. IMO you should stick with something under the $100K and a word of advice DON’T BUT ONE Bedroom anything since it will be very difficult for you to get rid of it in the future unless you intend on having it as an investment.
Miss Katie {B2B 5/15/2010} Says:
April 23rd, 2009 at 2:47 amVisit Miss Katie {B2B 5/15/2010}
Baltimore real estate
Hello,
I am 21 and own my own house, by myself! If I can do it alone, I’m sure that you can do it together. I make about $40,000 a year and was pre-approved for a $150,000 mortgage. However I didn’t use it all, I bought a house for $125,000. My monthly payment is $1,050 with all taxes and insurance included. But it depends on your credit, I have really good credit. Also the FHA loans are the best to go with! Good Luck!
The house that I own is 1655 sq ft, .76 acres and was in move in condition! It was great! The town I live in is not a poor town, it is a nice rural town, but 20 mins to shopping and such.
Pengy Says:
April 25th, 2009 at 11:17 amVisit Pengy
Missoula real estate
Realtor, bankers, loan brokers always state you can afford 3 times your income for a home I say BS. That is part of what got us into this mess to begin with. Would never go more the 2 times. You have no kids now but I expect that in the future there will be and that is a huge expense. Never Never make yourself homebroke. I followed the 3X advice years ago and ended up over my head, always made the payments but when needed a new car etc then had problems. Sold for what I owed and now started again and am very comfortable with my payments, even if I should get laid off (to old for more kids) Have to also remember taxes are always going to go up usually more than income. Make an affordable home your dream home not what you picture as the dream home but only short time affordable.