Can we buy a house if we only make $3000 a month?

Question

Me and my husband want to buy a home in NJ or in TX. We have a income of only 3 grand a month because I am in school for RN and will be for the next 2 - 3 years. We really want to buy a home now because we have 3 boys 6, 4, and 2. My credit is bad and his is O.K . Will anyone give a homeloan for at least $180,000.

I am also a Vet. I can get a VA loan. And now we are paying $1000 a month for rent.

Answer 1

With your current income levels, I'd say you're only chance at buying a home in that price range would be in TX.

If you decided on TX, I'd also say that you could certainly find a house for less that 180K that would be adequate for a family of 5.

Unfortunately, the information you're providing isn't enough to give you an answer. There are several things that would have to be factored in the equation.

1: Do you have a single or double income household? If it's single and you have separate finnances your husband may be able to qualify for a loan. Being the case that is score is O.K., I'd say you woudln't be able to hit the 180K mark unless you have a large down payment. The amount you can borrow, as a rule of thumb is 28% of your gross income. To borrow the 180 you'd need to put down around 16K and would need around 22K for closing costs. Not to mention some reserve monies. See this prequalification calculator

http://www.mortgage-info.com/mortgage-calculators/mortgagequalifyingcalculator.aspx

2: How is your debt situation? Owe money on cards, credit card debt, ect... This will be factored into the loan decision. It can also be input into the calculator link above.

3: The credit score is pretty important, I don't know where the cut off is, but it can affect how much you can borrow and at what interest rate.

It's possible some mortgage loan office would be willing to find a way to get you that loan, but I would suggest you take a very close look at your personal finnances and be honest with yourself. Can you really stretch the money as far as would be needed to buy the home. Don't forget that you may need to do repairs and costs of things such as general utilities go up.

Just because you can get a loan, doesn't mean you should accept it. I'd also suggest staying away from ARMs because interests rates right now are very good and ARMs have a very good chance of increasing in the next few years.

Good luck with the home search. Depending on where you are in TX, 150K can buy you a decent starter home.

***Note
As an owner, there are additional costs that you need to accout for to meet $1000.00. First of all, I'm guessing you got the 180K number by going to something like bankrate.com

http://www.bankrate.com/brm/search/story-mortgages.asp

A 180K would put you at around $930 a month, but this number is only PI. Principle and Interest. The rest of the equation includes TI, Taxes and Insurance. Taxes would be around 2 - 2.4 % in Texas every year. That translates into about 250 to 300 a month just for the taxes. I'd guess the insurance would run near 65 to 80 a month. That would leave you around $670 for the loan, which would put you in the 100K to 120K price range.

It's possible to find a house in TX on this budget, just depends where you're looking.

Mike

Answer 2

The short version is this: Go talk to a lender.
There are many factors in getting a home loan that have not been addressed: i.e. what other debt do you have? any car payments? students loans? credit cards? etc.
Also, the $3,000 a month, is that before or after taxes?
Do you have any money to put down?
Assuming that you need 100% financing, and you are not overloaded with debt or poor credit you should be able to qualify for something - but maybe not $180,000.
The standard lending guidelines say that your housing expenses (Principle and Interest payment) should not exceed 29% of their gross (pre-tax) monthly income. Your total debt payments (car loans, credit card debt, etc.) should not exceed 37% of your gross monthly income, though it is not uncommon for lenders to allow as much at 50% debt to income depending on the circumstances (the fact that you are in school and should, in the near future will be re-entering the workforce and bringing in more income could very well be a factor in their decision.
As for the credit, there is also the option (if he has the income), of taking the loan only in your husband's name, based on his credit and income.

AS I said, there are a lot of factors and only a lender can look at the total picture and see what programs are available.

Answer 3

My boyfriend and I are currently looking into purchasing a house, and our combined monthly income is pretty close to the same as yours. He's still in school. Anyway, we were approved for a mortgage loan, but for a much lower amount than what you seem to want. You can always apply for a higher amount, and then they can approve you for up to whatever amount they choose. Another idea to consider are grants in your area. A lot of communities have grants for first time homebuyers that help with the downpayment and closing costs, that sort of thing. There are special types of mortgages, too, that cut down on the downpayment. Just keep an eye out, and talk to a realtor, they know the community and are usually happy to help.

Answer 4

The honest truth is that you would not be able to afford your home and family. A mortgage for $180,000 would eat up almost half of your income. What ever you do do not fall for an interest only mortgage, that is for people that can switch it over to a regular mortgage in a year or so. If you will still be in school it will not work. Your mortgage should never be more than 25% of your monthly income. But it is a free world and you can do what ever you want.

Answer 5

It's a choice between want and need. A $400k loan @5% interest for 30 years would have a $2147.29 monthly payment for Principle and Interest (p & i) only. Then add the cost of (t & i) Taxes and Insurance. Divide the annual cost of the t & i by 12 (months) for that monthly amount to add to your p & i monthly payment. $3000k minus $2147.29 leaves you $852.71 to pay for taxes and insurance. Your $3000 per month may cover the total monthly cost of p & i and t & i. That's for 30 Years. That's a long time in a "no guarantee job market". Other considerations for additional monthly money needs: Money for living expenses, personal spending, and Savings. "A free and clear house is the new status symbol over the fancy car", quoted from Dave Ramsey.

Answer 6

One of the main qualifying factors for a mortgage is called your "debt-to-income" ratio. Most lenders allow a 50% ratio. This means that your total outgoing monthly obligations including your house payment cannot exceed 50% of your income. Based on $3000, your maximum allowed would be $1500. Subtract your car payment, credit cards, etc, and that is the maximum house payment you can afford.

Answer 7

Your making 3g month and your on here trying to figure out if you can buy a house! Well no I really don't think so, they won't look at you for two simple reasons actually three 1st reason your trying to better your self by going to school and the banker since that's all he is will be jealous 2nd your not making more than $3001.02c Thirdly he qualifies for a VA loan. The banker will be absolutely clueless on why you want a loan from them. He'll probably thingk your trying to either make a fool out them or your trying to pull a fast one on them to make your going to shool easier on your self so that you don't have to scrounge like he/she did.

Answer 8

I make less than that and own a home. However, $180,000 is too much. With kids, you might be able to afford payments on a loan of $130,000 including taxes and insurance each month. My home only cost $48000 and that's the max I can handle.

Answer 9

it'll be difficult for you to get a mortgage for that ammount with your limited income and bad credit. you should lower your price range to a maximum of $100,000, and start looking at older homes. do as much as you can to fix your credit, then after you graduate, you'll have a lot more money on hand, so you can sell the home and buy the home that you really want. don't be suprised if you have to try with several mortgage companies before you get a decent interest rate. best of luck!

Answer 10

You can buy a home. If your credit is not that great talk to the VA and they will calculate how much you could finance based on your income and current debt. My wife and I bought a house on our E-4 pay (both of us), but we bought a $70,000 house in TX.