my bf wants to buy a house but I'm afraid with our current situation now is not a good time what do u think

Question

ok we both are in our 30s and soon to be married.i make about 50k and he makes about 80k.the problem is he has a huge debt from his divorce(28k)and a large child support payment to his exwife.between these 2 things he can hardly make his share(half of our bills) of the rent/house bills with is total $900 a mon.if we bought a house our mortgage alone would be about $1100 each than tack on food,electric,cable ect.his child support is not going away but i feel he should pay off his debt 1st before we get into a house.he feels we are just throwing money away renting and need to buy a house soon as possible as a house would give us a huge tax brake.if we buy a house now i would have to pay all the closing costs,down payment as my bf has no money put away.i don't mind that part i'm just afraid after i do that we would have a problem making the monthly payments and would lose the house.is this worth the great tax break my bf talked about or would u wait till he had more money put away?

Answer 1

Well for one, before they approve your mortgage your debts must be paid off or you must show that you are current on payments. If you can fix that up you might be okay. I would suggest that you get a cheaper house if your payments will be 1100. That means you are trying to buy a house in the 200's you can find a decent starter home for around 120 and get payments less than you are paying in rent now. If you can afford 900 rent you can afford a mortgage. But your b/f probably needs to get his credit score up a bit if he has this debt. Stay current on the debt for at least 6 mos. If this is your first time buying a home you can probably qualify for a first time homebuyer's program. There are so many out there right now. If you don't have 20% to put down you will be responsible for PMI but if you go through a good first time buyer plan and they guarantee your loan you won't have to pay PMI. I went to USDA's first time buyer plan and I don't pay PMI, I didn't put any money down, and I got the seller to pay the closing. All I had to pay were the mortgage broker fees which were only about $1,000 and I ended up getting a $500 check at closing anyway. Also we are in a tremendous buyers market right now which means they are practically trying to give houses away right now. My BIL is a Realtor and he says people are cutting 15-20,000 off of homes now and even giving away vacations trying to sell homes. But if he is having a problem with his debt clean it up over these next 6 mos to a year and then try to buy a house b-cause 900 is a huge waste on rent.That's almost 11,000 a year. You might even try putting the mortgage in only your name that way they will look at your credit and not his. You can add his name later on. Just make sure you don't do an ARM or interest only mortgage. Only do a fixed rate mortgage and make sure your FICO score is at least over 650 so you can get a decent interest rate. My FICO was about 725 and my rate is 6%. But if you can afford 900 you can afford a decent house.

Answer 2

Your concerns may be the answer to your own question.
It seems like his track record with finances isn't great.
The only advise I would add is that maybe if you look around, you can find a home - a small starter one- that you could afford one with a payment as close to what your rental payments are now as possible.
Paying a mortgage is better than rent payments as at the end- you actually have something to show for the money.
Then, as your financial picture changes, sell & upgrade to a bigger or nicer home.
I think before the wedding though you two need to sit down and seriously discuss a budget and goals to get things started off on an open and agreed upon plan. Financial issues are one of the leading causes of relationship stress and failure - get it out in the open and deal with it from the start. Good luck to you both.

Answer 3

Something is amiss here. BF makes 80,000 yr,

80,000.00 yr
- approx 18,400 yr for taxes
- 28,000 for divorce
- 900 x12 his share of current expenses
Totals = 57,200

Child support $ 22,800 a year ???????? is that possible ?

It's natural to be afraid , it's a big step.

I think the issue here is not can you afford the home ? but that YOU are not ready to make that commitment.

If your credit is really good you may be able to get a home for little or no money down.

Also many sellers are willing to pay closing costs or help pay a percentage of the cost.

Your afraid you won't be able to make the payments?
Establish a realistic budget and a number in mind for the house you can afford. Buy a home that fits your current needs ..example you don't need a home with 4-5 bedrooms if it's only yourselves living there or a 3400 sq ft home with bling!

Answer 4

I am in a similar situation. My boyfriend and i want to buy a house. I have been a bit nervous about it also. But women have gut instincts. To figure out what you can really afford, write a complete approximate budget, including a savings account budget. Next, if you are really worried, maybe you can compromise......say, OK we'll buy a house, but it's going to be for this amount and not one penny more because here is our budget (and show it to him). Sometimes seeing is believing. This also gives you breathing room just INCASE something happens. Later you can sell this house and get a better one once things are paid off. But also make sure and tell him that renting really is NOT throwing money away. No, it's true you aren't earning 'equity' but you are exchanging your money for a roof over your heads......and that is priceless, really! Plus rent can also be tax deductible. If your boyfriend is still being unreasonable in my opinion he is being selfish......for realizing that you will be footing most of the bills, and he doesn't care about your wants, concerns and needs. This is just my opinion! GOOD LUCK!!!!!!

Answer 5

That's a LOT of baggage.

PROS
With a house, you can raise your deductions to get more money in your paychecks.

You will gain equity in the house over time. It will take a while, but it will happen.

CONS
No matter how livable a house is, you always make improvements and repairs. What will you do if, 3 years down the line, the house needs a new roof, pipes or other?

Bottom line, if you wait "until things get better," you'll never own a home.

Answer 6

Sounds like you are getting setup to support him. That is fine, provided you are rewarded in the long run. If you want to buy a house in your name for YOUR benefit, do it. He can "pay rent" to you and YOU take all the benefits. If and WHEN he finally catches up on his debts and his kids turn 18, you can strike out together.

In any event, if you proceed get an attorney or someone objective to draw up a split. I'm trying to do this same thing for my mother-in-law and her new boyfriend. Guy seems great, but she is the only one who can put the down payment together. In essence, he will benefit from her fiscal responsibility - do not get taken advantage of, you work too hard.

Best of luck.

Joe...

Answer 7

I say wait...make a plan for paying off his debt and at what point you would feel comfortable buying a house. It sounds like the pair of you make enough money to really put a dent in the debt and get a savings for the house going before you buy it.

Answer 8

I don't mean to offend you, but I think there's something you need to understand.

Our lives are substantially better WITH God's blessings than WITHOUT. Similar to the schools, who after kicking God out, wonder why everything there is going so poorly..... by living with your boyfriend before marriage, you're basically telling God what you think of Him.

Even if that were not the case, He does warn us not to be "unequally yoked". You and your boyfriend are unequally yoked in how you believe money should be handled. More fights in marriage arise out of disagreements in how money should be handled than any other thing..... you already know that you don't see eye to eye on this.

Lastly, even after 14 years as a Realtor, it still shocks me when I hear married couples and almost married couples talk about "your money" and "my money" and "his half of the bills", etc. and the words "we", "us", "our" never enter into the conversation. It sounds like two roomates.... not a marriage.

Answer 9

i'd propose that you do not purchase the homestead now mutually. yet another idea will be so that you'll be able to purchase a house that you'll be able to manage to pay for (on your call purely), and enable him attempt to assist with funds. He ought to pay off his debt and get in a good monetary situation previously he buys a house--he ought to drag you down with him (to having spotty credit).

Answer 10

Take a deep breath (ok)....First if you are haveing doubts - than hold off. Now that you have taken the deep breath, sounds like you have considered your options. On a piece of paper write down the pros and cons. That normally works for me. Consider this.......Can your b/f soon to be husband, go back to court and see if he can lower his child support some, based on his income? Can he call and see if the payment on his 28k be lowered and extended over time (based on his income alone). just and idea.

2nd: Get approved on just you alone - so his debits do not show. If it is court ordered, when they run a title search, it will more than likely show up on the title as a judgement. What you need is 2 years job time, 2 years w2's, and rental history for 2 years. If you do not have this, than it is workable by explaining it to a underwriter.


Now - there are 100 percent loan programs available and the rates are not bad. How much are you looking to finance? Have the seller pay up to 6 percent (allowed by state laws) of your closing costs. You would not need the full 6 percent, but that will allow you not to have to pay out of pocket. You would have to put earnest money down if you go with a realator. Or you can do a For Sale By Owner. With a For Sale By Owner, they do not have to pay a realitor, so they are more willing to pay your closing costs.

. Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down. Try to find someone (broker) that will pull your credit one time, and submit your loan application to company's that will go off his credit report. By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). This will tell you the up-front closing cost (etc) associated with your loan. This is a estimate only - not the final - but it does help you figure things out. Some companies want you to escrow you taxes and insurance. Other's may not require it...Some companies add a .25 to the interest rate if you want to escrow waver...FHA loans have to escrow.

A 100 percent loan - is not totally out of your reach - There are FHA programs, payment assistant programs to help you. Lenders look at your middle credit score (should be 580 +, to get 100 percent financing).If you do not know your credit scores - have your lender tell you, or pull your credit from the 3 credit reporting agencies - BUT the person you are working with should tell YOU.

If your credit is low, than you will be going SUB-Prime, and any amount over 80 percent does not have MI - There are a lot of companies I underwrite for that does NOT charge MI - normally the rate is slightly higher.

If you go with a FHA loan, FHA has MI included. (With a 580 + you will be going sub-prime the rates are higher by about a 1 percent, but you have no MI. (MI is mortgage insurance in case you default on the loan, it is a way for lenders to have added insurance. It is not the same as Home Owners insurance, ok) VA loans Lenders look at the middle score to qualify a person - With a 580 or higher you can get a 100 percent do not have MI insurance.

I know this is alot of information to digest. Going to these websites are very informative.


http://www.fanniemaefoundation.org

http://www.fha-home-loans.com

http://www.freddiemac.com/