is $15,000.00 a good down payment on a 250,000 house?

Question

My middle credit # is 542, highest is 591, my income is 32,256 per year before taxes. that is not including my wifes income, I make more and have a better credit score. it will be my first home.
and I was wondering what my monthly mortgage will be in prince georges county md? if you know.

wife makes 15,000 per year does that help alittle bit?

Answer 1

$15,000 would be on the low side, but it would be sufficient for a down payment. However, if you take a $235,000 mortgage, assuming a 30 year loan at 6.75% interest (which is around the going rate today), your payment will be $1,524.21, plus you will be paying taxes. You may also have to pay PMI (Private Mortgage Insurance) -- I am not going to get into it here because it's a long discussion.

You probably will not qualify for such a large loan with your current income. While you don't tell me how much your wife makes, you say she makes less. If both of you make $32k, for a total of $64k, and assuming you have no other debts, the most you would qualify for is a $215,541.80. It would probably be pretty tough for you to get by if you took this size loan.

You probably will not qualify for a no income verification loan, because your scores are not high enough. Usually 600+ is required. But anyway, the interest on such loans may be as high as 10%. Assuming you find 9%, your payments would be $1,890.86. I do not recommend going this way even if you qualify, because you will absolutely stuggle with the payments.

There is also such a thing as an interest only loan. You could decrease your payments a little, but you aren't building equity, the interest is higher and I still think it will be difficult for you to pull off.

My advice is that you look for a cheaper home. If you combined income is $50k per year, you would qualify for a $150k loan.

Also, meet with a mortgage broker to get a pre qualification letter and discuss your options further.

Answer 2

It's an ok down payment. Ideal is always 20%, b/c that is generally the threshold that helps you avoid paying PMI (Private Mortgage Insurance). Banks usually want to see a LTV (loan to value) ratio of 80/20, where they lend up to 80% of the appraised (their appraiser) value of the home.

At a 15000 down payment (not counting your outlay for closing costs), you are asking for a loan of about 94% of the home's value. In that case you will likely have to pay a higher interest rate, as well as a monthly PMI payment (some fractional percentage of the loan amount). The issue is that PMI is NOT tax deductible in most cases, while your mortgage interest is.

You'd probably be looking at 1800 or more per month. You could buy points to pay down the interest rate, but that's still more up front money.

All that being said, when we bought our first home in MD, it was about 235000 and we put down 5% (around 12k) using an 80-15-5 loan product where the bank actually loans 80% of the sale price as a first mortgage, and then an additional 15% of the sale price as a second mortgage/home equity loan. The second carried an almost 2% points higher interest rate. This was 1998 and our rates were 7.5% and 9%, respectively. Our monthly payment was close to 1600 I think (including taxes and insurance), but our credit score and income were higher than what you have, so your monthly payment will likely be higher.

Good luck.

Answer 3

first of all, you should try to put 20% down, becaus if you don't you have to pay PMI (private mortgage insurance), which is dollars that you pay every year until you have 20% down - this is to pay off the mortgage company if you don't pay your mortgage. If you put 20% down, you are less likely to walk away.


With your income, you are way over your head in mortgage payments. Since it's your first house, you will have to buy a lawn mower, a snow thrower, a washer and dryer, other appliances if not included (stove, fridge) more furniture, your gas and electric bill will be higher, and you will pay $4,000 a year in taxes, and probably at least $1,000 in homeowners insurance. If you use your wife's income to qualify, then if you decide to have children she won't be able to quit work and raise them because you'll be tied to the house.

Your mortgage, including taxes and insurance, will be $1744 a month ($1344 for the mortage, 100 for the insurance, and $300 at least on the taxes) on a 30 year fixed - with interest rates going up, you don't want an ARM (variable) - so hope you don't want to do anything else (like buy a car, or go out to eat, or buy formula for the baby) unless your income increases dramatically.

Answer 4

YES! You can buy a house.

It is great you are starting the search for a home and financing early. The best thing working for you right now is time. Since you are not pressured to by a home in the next 60 days there are many options to help you obtain your dream of homeownership.

1. Check your credit - You have already done this step. Get a copy of your credit report with credit scores. You can get a free copy with out scores from the Federal Trade Commission www.ftc.gov or you can buy a copy from the credit bureaus themselves. (websites below)

2. Improve your score - Everyone’s situation is different. Some things you can do to improve your score are:
- Pay your bills on time
- Get credit balances below 75%, 50%, 35% of available credit
- Do not open any new accounts or apply for additional credit
- Do not close any accounts
- Dispute errors on your report
For more information on credit go to Fair Isaac's site (they created the credit score) www.myFICO.com
There are companies that can assist you in improving your score. Please note everything they do, you can do for free on your own.

3. Consult with a loan officer to see what programs you qualify for now and what you need to qualify for better programs.

4. Many cities and states have First Time Home Buyer (FTHB)Assistance. There are income and credit requirements. most of these programs become available with scores in the low 600s

5.100% Financing starts with credit scores in the high 500s

6. Payments based on your current credit status for a $250,000 purchase with 10% down would be about $2200 PITI (principle, interest, taxes, insurance) If your score go up this payment can be dramatically reduced. and the down payment can be less.

~Danke Schoen

Feel free to contact me with any other questions or a second opinion.

Nathan
[e-mail]
888-602-4622 ext 12
925-250-6067

Answer 5

If you can come up with 20% down, that would be ideal, which would get you a better rate on your mortgage.

Would you consider delaying your purchase? In most area of the U.S., housing price stopped going up as inventory continues to build up. It is normal to see a correction as a boom that lasted for several years.

If you are investing new money in to real estate, this may not be a good time as the potential return on investment is small compare to the high risk of lower home price.

If you are doing a side way move, meaning you are selling one to buy another one, then it is acceptable.

Nothing is absolute, but housing market is very likely undergoing a correction and this is only the beginning. Some say this would be a soft landing (0 to 10%). Some say a big crashing is coming (10 to 20%).

http://money.cnn.com/2006/08/24/news/economy/newhomes/index.htm
http://money.cnn.com/2006/08/23/news/economy/homesales/index.htm

Answer 6

You need to apply for a FHA loan, whose credit score requirements are 580 min. You really need to shop for less home as you appear to have champaign tastes and beer budget to work with. The FHA mortgage payment guidelines allow payments that will equal about 29% of your gross pay, and total debt including that payment can not exceed more than 39% of your gross pay, to include credit cards, day care, child support paid, car payments, student loan payments, or any existing debt that will take longer than 9 months to pay off basically.

The main objective is not to buy what you want but what you need to start. Pay additional payments on the principle for a few years, build equity and then you can sell and buy what you want with a substantial down payment. I suspect that over the next few years as the real estate market slows and repossession rise that you'll be better positioned to buy "up" as lower priced homes have special incentive loan rates etc that higher priced do not, and you'll be able to sell yours and buy "up" with a better deal.

FYI: Your principal and interest payment alone on a $235,000 mortgage that you propose will run $1,524.21 plus taxes, insurance and the PMI. Based upon FHA calculations, you qualify for a $1,142.02 payment. That is figured at income of $47,256.00, interest of 6.75%, 30 yrs. amortization schedule. When you add the taxes etc that payment will rise another couple hundred dollars, far above what you qualify for and at that assuming you have no other debt.

Answer 7

You can probably handle a mortgage of about $75000 to $90000 without undue stress. If you gave your wife's income then I could give a much better estimate. The cost of the house you are looking at is totally out of your reach. The only way you could do it is with a balloon mortgage and you pay the interest only for 5 years, you then default on the mortgage. Not a good plan.

Answer 8

You will get the best rate at 20% down. Your credit isn't very good so you probably won't be able to finance 95% of the property. If you only have $15,000 and you want to put 20% down you can only afford $75,000 with seller paid closing costs.

Expect to pay $450 a month for $60,000 loan or $2,200 for a $250,000 loan which you probably won't be able to get with your credit.

You are way out of your league at $250,000.

Answer 9

Go to any bank website & you can calculate mortgage rates.

It dosen't sound like you earn enough to have a mortgage that high. They usually calcuate 3x your salary less your debt. You may need to include your wife's income or have a bigger down payment.

$25,000 would be 10%, but you could probably get a 1st time mortgage deal & pay only 3-5% down.

Good Luck!

Answer 10

that is been executed for the previous a number of years, regrettably with some disastrous outcomes if you happen to were given in without down price and now won't be able to refinance into more effective prices or promote because the resources is nicely worth decrease than they offered it. maximum lenders have executed away with the single hundred% purchases (which replaced into 2 loans blended frequently to cover one hundred% financing), yet FHA facilitates 3% down price- and money should be proficient, and FNMA presented useful June a million, they are going to also enable 3% down funds.