I am looking at buying a property for 180,000. This is my first home and I can put down only 5-10%. My salary is 55,000 per year and I have a small business online that generates 20,000 per year. The property is a 5 unit apartment complex with all units currently rented and producing 2380 in monthly income currently. The total costs involved in the property if I were to own it would be 2000 per month. Should I get approved for the loan?
I have good credit but I am not sure what the rule of thumb is for a mortgage loan amount and its ratio to my income. Anybody with home buying experience that can give me some insight?
2006-08-28 03:55:24 · 6 answers · asked by truthsense 1 in Business & Finance ➔ Renting & Real Estate
Typically lenders want to see your mortgage payment no more than 28% of gross income and total debt service of less than 35% of gross income. Generally a lender will look at a 5-unit building as an investment, not a home, even if you are living there. This will tend to tighten the lending criteria and raise the interest rates a bit.
Self-employment income generally isn't considered until you can prove 2 or more years of regular income from the business.
2006-08-28 04:13:32 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 0⤋
Getting approval on loan give you a good guideline on how much you can afford. Personally, I would like to get approval from a bank as well as a mortgage broker. You will be surprised the difference between the 2 loan amount approved.
30/70 is a good ratio to use, but it still come down to how comfortable you are with the monthly payment. Because of an increased the variety of loan available, borrower can now assume a much bigger loan then before.
Hope this helps.
2006-08-28 11:16:23 · answer #2 · answered by jloh 1 · 0⤊ 0⤋
Well if your under 40% DTI which is debt to income then well your pritty much set but if your not its ok it realy depends on the type of loan your going to qualify for. If you dont have the income there plenty of other ways of qualifying for a loan. You could go stated or stated/stated. Well then if you have any other questions go ahead and email me at banconeroman2@yahoo.com
2006-08-28 14:27:13 · answer #3 · answered by business creature 2 · 0⤊ 0⤋
the ratio is 70/30. only 30 percent of your income can be going out in bills.
2006-08-28 11:01:57 · answer #4 · answered by Anonymous · 0⤊ 0⤋
depends on the type of loan you are getting, Va, Conventional, FHA
2006-08-28 11:22:58 · answer #5 · answered by Marianne 2 · 0⤊ 0⤋
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2006-08-29 20:30:43 · answer #6 · answered by Anonymous · 1⤊ 0⤋