Hi guys. Let me start by saying that I really appreciate all the help collective minds of ATOT offer. I've had a lot of my questions answered here, saving me lots of time and money (no, I'm not going to share). Now, I've read through numerous mortgage/real estate thread and learned a lot of useful information from them. However, I have several questions that I believe are unique to my situation. So, I'd appreciate any help you guys could give me. Now to real questions.
I decided that I don't want to continue paying $1050 a month in rent so I decided it's time to buy a condo. Decent condos go for $150,000 - $250,000 around here. Including mortgage, condo fees (around $150-$200 here) and any other monthly expenses I can afford $1300 a month. My credit score is relatively high - 780 last time I checked. It actually might be in 800s by now, although I'm relatively young and had credit history only for 4+ years, so that could potentially play against me.
Everything sounds good so far, except for a problem - I don't have much saved up, and therefore can't afford a decent downpayment. My savings account has a little more than required as a safety net. The max I can squeeze out of it is $5,000. Now, I also have a little less than 10k in my 401k account, and I've heard that you can withdraw from your 401k without any penalties (taxes too??) provided you use that money towards purchase of your first home. If that's true I can get 10k-15k as a downpayment, but not a cent more.
Now the first question is - can I even get a loan with that little down? If I can, what kinda interest rate can I expect?
Second question - assuming that I can get a loan, and lets say interest rate is 5% (highly optimistic rate, I'm guessing). I'm looking $190,000 condo, with 30 year mortgage. The monthly payment on that should be $950, which after condo fees should come out to be within my limit. Looking at amortization schedule I'm using only $2500 towards the principal - the rest is interest. Is this worth it? Am I going way over my head?
These are all the questions. I realize it's a long read, but I'd appreciate any advice you guys can give me. I'm planning on visiting a broker this weekend and I'd like to be prepared. Once again thanks for bearing with me.
I decided that I don't want to continue paying $1050 a month in rent so I decided it's time to buy a condo. Decent condos go for $150,000 - $250,000 around here. Including mortgage, condo fees (around $150-$200 here) and any other monthly expenses I can afford $1300 a month. My credit score is relatively high - 780 last time I checked. It actually might be in 800s by now, although I'm relatively young and had credit history only for 4+ years, so that could potentially play against me.
Everything sounds good so far, except for a problem - I don't have much saved up, and therefore can't afford a decent downpayment. My savings account has a little more than required as a safety net. The max I can squeeze out of it is $5,000. Now, I also have a little less than 10k in my 401k account, and I've heard that you can withdraw from your 401k without any penalties (taxes too??) provided you use that money towards purchase of your first home. If that's true I can get 10k-15k as a downpayment, but not a cent more.
Now the first question is - can I even get a loan with that little down? If I can, what kinda interest rate can I expect?
Second question - assuming that I can get a loan, and lets say interest rate is 5% (highly optimistic rate, I'm guessing). I'm looking $190,000 condo, with 30 year mortgage. The monthly payment on that should be $950, which after condo fees should come out to be within my limit. Looking at amortization schedule I'm using only $2500 towards the principal - the rest is interest. Is this worth it? Am I going way over my head?
These are all the questions. I realize it's a long read, but I'd appreciate any advice you guys can give me. I'm planning on visiting a broker this weekend and I'd like to be prepared. Once again thanks for bearing with me.