Will we be able to buy a house?
My wife and I want to buy a house when our lease is up in ~4 months.
My wife has been at her current job for about three years, but has sub-par credit (not horrible, but not good…low 600′s).
In August, I will have been at my job one year (though I started as a temp in May 2007), and I have ‘ok’ credit (mid to high 600′s).
We will have about -5k to put down (maybe more if absolutely needed). We make 00 per month (pre-tax), have about 0 per month in debt (car payment and credit cards) and could afford up to 00 per month on housing, which from my understanding would put us at about 0-275k.
HOWEVER, we want a mortgage that is easy to pay, and are looking at houses more in the range of 0-175k (and hopefully have a mortgage payment of 0 per month or so)
Even though we are not ideal borrowers (in terms of job longevity and credit scores), will the fact that we are looking for a mortgage that is well below our means make it easier to get a loan?
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March 6th, 2011 at 6:38 pm
I think you have a pretty good chance. Banks are going to look at your income to debt ratio (yours is pretty good) as well as your other factors like income, credit ratings, etc.
Anything you can do between now and when you start looking for a house to lower (or eliminate!) your credit card debt and raise your credit scores will help your search greatly.
Your payment of $800/mo is too low. You’re probably looking at between $1300-1500 if you go with a lower priced house and a standard 30 year fixed rate mortgage. Yes, you can get lower rates with an adjustable rate mortgage (ARM) but be VERY sure you understand how these mortgages work. An ARM can be useful in some situations, but you have to be careful you don’t get caught when the rate adjusts.
March 6th, 2011 at 6:38 pm
I think you are in a position to do that with buts. the buts are the credits that you have accumulated mid $1000 both of you and the credit cards the car too is a burden and loans for a mortgage won’t be easy to land coz banks are weary . Are u doomed? not necessarily.
Assuming you are in the US you can get rid of the car and enroll in a car pooling company will save you allot of greens, pay off your debts and get rid of the credit cards those are temptations that not only make you buy on impulse, but you get card for that card.
Cut on other unnecessary spending and you will pull it off. I hope you are feeling me because if you lease was of about $1500 a month you are in a position to buy a house. getting rid of the car and the card an other ‘bad behaviors’ u will save about $800.
Some new trend that is coming up in the states is Mortgage counseling enroll your wife and you in such a program and they will fix you where i couldn’t reach to you.
grts
March 6th, 2011 at 6:38 pm
I don’t think that you can finance anywhere near $175,000 with an $800/mo payment. Remember, you have to add taxes and insurance (possible PMI) also. Check out some of the on-line "mortgage calculators" to get an idea of what you may qualify for and what the payments would be.
March 6th, 2011 at 6:38 pm
You are seriously over estimating what you can afford. You are pretty low income at only 66k a year. You need to stick with 100-125 for a price. After insurance and property tax that will be about all you can manage until you have better paying jobs.