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First time home buyer - any advice?

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swbsam

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I'm a little bit wary of the process and would love some advice/thoughts. My wife and I have mediocre credit (hers better than mine) but our income allows us to easily afford a mortgage, our rent already being significantly more than we'd be paying to own. We've just started our mutual careers and make about $110,000 a year, but we're living comfortably spending $1,825 in rent, and expect to do fine with a mortgage. We're relatively young (26 and 27) and have what we think is a decent down payment ready to go ($30-40k for a $350k handyman special - will we have a major problem getting a mortgage? My parents offered to co-sign if necessary and they have wonderful credit, but will that even be necessary?

We're looking for a 2 family house and hope to rent out one floor, which would seriously cut down on our out of pocket expenses.. But is our search premature? We, of course, will talk to experts when the time comes but I actually hate wasting people's times, especially bankers/real estate agents.
 
I'm not a financial expert but I'll say this - in today's market and the bank situation the way it is, I'm not sure - but with those numbers I don't think ordinarily it'd be impossible to get one. They look at your income, your current savings, and determine if it's feasible for you to sustain a mortgage / return the loan. Are you sure you can't wait till you reach 20% for the down payment? Borrow from parents?
 
Originally posted by: rh71
I'm not a financial expert but I'll say this - in today's market and the bank situation the way it is, I'm not sure - but with those numbers (similar to ours when we started) I don't think it'd be difficult to get one. They look at your income, your current savings, and determine if it's feasible for you to sustain a mortgage / return the loan. Are you sure you can't wait till you reach 20% for the down payment?
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Well, we could technically save the 20% in time, but we have 6 months before our current lease ends and are hoping to not have to move again to another rental. Rent where I live (Brooklyn) seems to be going up and up and we don't want to move twice in say 2 years. Of course, if that's what we have to do then we'll do it.
 
350K is too much house on a 110K income. So let's throw that out the window. You won't need a cosigner, you're adults now. Just go get pre-approved then shop around for a house. But seriously lower your price, that's too much.
 
Originally posted by: spidey07
350K is too much house on a 110K income. So let's throw that out the window. You won't need a cosigner, you're adults now. Just go get pre-approved then shop around for a house. But seriously lower your price, that's too much.
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That's actually our ultimate high, but we're aiming around $250-300k, probably a real shit hole for that price but we're handy and have some good handymen ..well.. handy.
 
You shouldn't have a problem, but the only way to know is to go get pre-approved for a mortgage.
 
FHA is going to be your best bet......

Minimum 680 mid-fico from both of you if you want to really be serious.
 
Originally posted by: spidey07
350K is too much house on a 110K income. .
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😕

Where do you get your info?


There are some people who afford it just fine. There are also people who make $300K a year that cant afford it due to 2 BMW payments and a boat.
 
Originally posted by: Ocguy31
Originally posted by: spidey07
350K is too much house on a 110K income. .
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😕

Where do you get your info?


There are some people who afford it just fine. There are also people who make $300K a year that cant afford it due to 2 BMW payments and a boat.
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An online calculator suggested no more than $400k for a place, but we figured we'd be comfortable with even that considering the hopeful rental income. But $300-350k seems safer, based on the assumption that we may not find a renter for a while. If things don't work out we can still make the rent, if they do we can .. gasp.. Save!
 
Originally posted by: MagnusTheBrewer
Aside from the financial situation, please pay for an inspection before signing on any house.
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Will do that, for sure. Thanks for the good advice 🙂
 
Originally posted by: cHeeZeFacTory
banks still give loans to people with 10% down? Are you only considering FHA?
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Yes, even less with FHA.


It doesnt matter how much you put down as long as you can really afford the home. You just have to pay Mortgage Insurance for anything < 20%.
 
Originally posted by: spidey07
350K is too much house on a 110K income. So let's throw that out the window. You won't need a cosigner, you're adults now. Just go get pre-approved then shop around for a house. But seriously lower your price, that's too much.
Click to expand...

it's not... you financial people with safety netting on the mind kill me... as long as he has the initial down payment he'll be fine. Something like a $2k monthly mortgage is perfectly sustainable on that income and they'll have around $1k each monthly for savings after other expenditures.
 
350K house is a lot for your guys income I would say. You should instead prolly be looking at 200-250K. That's just my two cents.
If both of you are making $110K/year and are comfortable you must live somewhere not so expensive ... which means 350K home in you living area would be like a mansion.
 
Originally posted by: rh71
Originally posted by: spidey07
350K is too much house on a 110K income. So let's throw that out the window. You won't need a cosigner, you're adults now. Just go get pre-approved then shop around for a house. But seriously lower your price, that's too much.
Click to expand...

it's not... you financial people with safety netting on the mind kill me... as long as he has the initial down payment he'll be fine. Something like a $2k monthly mortgage is perfectly sustainable on that income and they'll have around $1k each monthly for savings after other expenditures.
Click to expand...

I guess ... say 25% taxes on the income - 2K mortgage leave you with ~$4400 a month to live off of...that's plenty to live and save for rainy day.
Now if you're going to have kid things will start to get tricky maybe.
 
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