[ADVICE] buying my first home...i think

I would say the payment is too high for you, is that what we are suppose to debate about?

 

Sauces say... no. Maintenance and upkeep are probably more than you think.

As a rule, your house note and taxes shouldn't exceed 25% of income. Save your money, put more down.

 

I don't think the banks will approve the loan if payment is more than 30% of you income

 

Not in this Trump economy.

 

You either need to wait, or settle for something less. Your payment is $900 more than mine and we net about twice that.

 

That is based off gross and he gave net. He could probably get the loan as long as he doesn't have much debt service outside of the mortgage.

 

Those payments are too high relative to your income. You don't want to get into a situation where you're house poor.

Also, what kind of down payment are you looking at?

 

You are correct, but i still think it is too much, there will be utlities, hoa etc, the house is more than mortgage.you can expect 400-500 on top of mortgage at least.

 

Definitely agree. What you can borrow and what you should are not the same. Spending 50% of take home on a mortgage greatly limits you. He needs a payment about half of that. You don't want to struggle to make ends meet.

 

You might be able to afford it if you are willing to be house poor. You will have a home but not be able to afford much else. If that is a sacrifice you are willing to make, then go ahead. Banks want you to do that because they win.

 

No you should not buy this home. It's very risky to get a home that will cost you a higher percentage of your income. If the housing market declines you are underwater. If you lose your job you are likely to default. You have very little to save and would be struggling living paycheck to paycheck.

You would get some tax benefit from mortgage interest and property tax deductions but you may not make enough to realize the full benefit.

You want your rent / mortgage to be no more than 1/3 of your after tax income. So $1,100 is your max.

 

How long is the term and what is the interest rate? Does that $1650 include taxes? In order to get $200000 to be $1650/month, the interest rate has to be over 9% for a 30 year loan unless that amount includes taxes and other fees.

 

Are you getting an fhi loan?

There is a high risk the value of your home will decline as the economy is at its peak and interest rates are rising

 

Depends on other factors like how much you pay rent right now ! is it close to your payment. Is it possible to lease or split part of the house with someone else so you could slash some cost, is your income stable , did you save some money for the past a few years,how much money is sufficient for other expenses, is there a moonlight job you could do etc

I bought a 4 apartments building so it can pays for itself, wasn't the glamorous place I wanted to live in though and 2.5X of what a nice house cost but I have some peace of mind about this investment though it can be a financial burden from time to time

 

10 years ago I’d say you’d be fine with a low down payment because you could just refi once you got 20% equity in the home.

However rates are about to go up and will be raising for some amount of years.

Your home payment is so high because of PMI. It’s okay to deal with PMI your first few years as nobody can really be expected to have 20% in cash to put down on their first home, but you need to give yourself the ability to get off that loan in a few years.

Hope that makes sense. I’d try to find a starter home in the 120 to 150 range if you can based on what I’m reading here. It might not be everything you want, but you can start building equity and get in a loan you can manage.

 

Another way is borrow two loans one for the twenty percent down and other for the rest of the the 80% standard loan, that way you could tighten your belt for a few years and get rid of the 20% loan then it would be just like a regular loan the rest of the way.