What are something I should be aware of when taking a house loan?

Question

I'm 19 years old and just started working part time for 9 dolloars an hour. This is a 2 room and one bathroom house for sale for $130,000 and I figure that's a okay deal. Anyways, I don't know if this is a good deal but please give me some advice. Maybe I shouldn't buy a house yet. ETC...

What is the best loan for my situation. Maybe a 40 year plan or something?!?! O and when I do buy the house, what are some things a new home buyer should be aware of, the extra bills.

Answer 1

Unfortunately, now is not the time for you buy a home. You can't afford it. At 9 bucks an hour part time you don't qualify for a loan on a 130k home. Because you can have a 35% debt to income ratio for you purchase. Assuming part time means 30 hours per week that is $270 a week that's 14040 per year. That equals a payment of 378 per month not including your taxes and insurance. Without doing the math your payment will end up around 800-900 per month on a 130000 home, you can't afford it. Also you have to have 5 credit lines to qualify for a loan. At 19 I know you don't have that right now. You are on the right track in your thinking but just a little early. Some extra bills you need to think about are repairs, insurance and taxes. If you are strapped to a payment you won't have a life. You also don't want to do a 40 yr note. There are allot of predatory lenders out there who prey on people like you, so be aware. They will paint a pretty picture for you and tell you how you can afford it but they are commissioned sales people who are looking at you as their next paycheck. You should wait about 5 years, become allot more stable and land a full time job that you like. I hope you can appreciate my candor, I was trying to be upfront and honest with you. Your on the right track, just a little early Pat

Answer 2

It is true that on a part-time job making $9/hr, you can't afford this home.

You're still very young, it's ok to be a renter for a while. Keep your housing expenses low and go out and have some fun.

Owning a home means paying (and most importantly, budgeting) for repairs. Appliances can break down. Walls need to be painted. Roofs need patching.

A $130K house will cost at least $1000 per month in payments. You'd need a full time job making $12/hour to afford that. Finding some buddies to rent from you can help, but you have to be able to make the payments if you don't have the rent coming in.

And having some savings first is best, so all the answers above mine were solid too.

Take your time, get a solid full time steady job, get some savings built up, then look at buying.