I have a few questions on loans. First off, what is the legal age to apply for a loan? What do banks look at? What would you realilistically have to be making to be able to afford a 80k house loan? Thanks, feel free to include more information then what I have asked, I have no idea where to start.
2006-07-23 08:04:22 · 4 answers · asked by Anonymous in Business & Finance ➔ Credit
You would need to be at least 18 years of age to apply for a mortgage. If you're younger than that, you can not legally sign a contract (with a few rare exceptions).
Banks want to see a stable job history and at least 2 years of good credit. They will want you to have been employed for at least 2 years, and hopefully you will have been at the same job or in the same industry for at least 1 year.
You'll need money in the bank as reserves to pay toward incidental expenses, such as repairs and upkeep, as well as money to put toward the down payment and closing costs. If someone gives you money toward the down payment, this money has to be a gift. You aren't allowed to have side agreements to pay back loans (for the down payment or closing costs) without that information disclosed to the mortgage company.
For an 80K loan, if you get a loan for the full amount, your payment will range anywhere from $430 at 5%, 533 at 7%, or 644 at 9%. This is just for the principal and interest.
Your payment will also include your homeowner's insurance and your property taxes in most cases. Those amounts for insurance can vary based on your location and the coverages you select, as well as the type of house. The tax amount will vary based upon what exemptions you can claim and the tax rate in your area. It can add about $50-100 a month for homeowner's insurance (or more), and anywhere from $20 a month to hundreds a month for property tax.
Your real estate agent will be able to give you an idea of what the property tax is on the homes you are looking at.
For a mortgage, you don't want to spend more than about 25% of your income on a mortgage payment. Some lenders will go higher, but it's not a good idea. You don't want to be stretched too thin with your finances. For an 80K loan, you probably should have an income of at least 30K a year.
One more tip. When you're ready to apply for loans, go through a mortgage broker, and not just your local bank. A broker can go through different lenders to find the best deal for your situation, and they usually get paid by the lender.
Good luck, and I hope you find a house that you will love.
2006-07-23 08:23:58 · answer #1 · answered by Mama Pastafarian 7 · 1⤊ 0⤋
Mama's answer is spot on.
I might add just a couple things.
Banks will look at the % of your income you use for mortgage (including property tax and insurance) as well as the % of your income you use for other fixed monthly payments (car, etc.)
You should use no more than 25 to 30% of your pre-tax monthly income for your housing expense and no more than 5 to 10% of your income for all other fixed monthly expenses.
Also, banks want to see some cash reserves when they make your mortgage. What if the water heater breaks or you have a major car repair or you are temporarily out of work. Count on needed 3 to 6 months of reserves
Good luck.
2006-07-23 09:07:56 · answer #2 · answered by Stephen B 3 · 0⤊ 0⤋
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2016-12-10 12:54:23 · answer #3 · answered by lotta 4 · 0⤊ 0⤋
banks have lot of money, they lend it to people at a premium rate, you can easily get 80k loan as bank policy are very liberal nowdays
2006-07-24 01:32:22 · answer #4 · answered by Anonymous · 0⤊ 0⤋