I am currently paying $1250/mo for a 2bd/2ba apt. in SoCal. I really hate throwing that kind of money away, though, and I want to buy a house after my lease is up in Sept.
I have good credit (score is 750), minimal bills each month (just two credit cards), and I can afford payments of $1500-$2000 each month on a mortgage.
I have looked into several first-time-buyer programs, both locally and for the State of CA. It looks like I can get some help with the downpayment, although I have about $20k for that already. Most of the 40-year loans seem to show that I can only afford $200k for a house at the most, and that's not going to get me much here in SoCal (I want at least 2bd/2ba, and not a bad neighborhood...I'm looking at the Long Beach area).
So, can I somehow buy a $400-$500k home in this financial situation? If so, when should I start looking? Any help would be appreciated.
2007-02-20 05:27:45 · 10 answers · asked by Sophie832 3 in Business & Finance ➔ Renting & Real Estate
You'll need another approach, maybe another co-signer. I figure by yourself you can afford about a $250M purchase, and in Long Beach you're going to need at least $350M to buy a 2-bedroom condo. But here's the math:
Purchase: $250,000
Down pmt: $ 17,500 (7% down)
Principal & Interest: $ 1,432(30 amort. at 6.25% - don't do a 40-yr.; a 30-yr. will only cost you about $51/mo more)
Property Taxes: $ 229 (1.1%/yr)
Homeowner Ins. $ 38
PMI $ 151
HOA $ 150
Total monthly $ 1,999
Probably your best approach is to get a good co-signer (parent, maybe?) to improve your affordability issue. You could then maybe approach something in the $350M range, costing you about $2700/month, but if you could also get a roommate and rent the second bedroom out for at least $700/month, then your net cost would still be below $2000/month. I've been there - it's tough starting out, but you can find a way to do it. Good luck.
2007-02-20 06:08:29 · answer #1 · answered by Marko 6 · 2⤊ 0⤋
No you can't no matter how you look at it. You are forgetting about the big taxes and insurance you will also need to pay each month along with your mortgage. What you can afford is what you can afford. Your best bet if you want to ease the pain of living day to day is to move. You can buy brand new houses that look like million dollar house in a lot of cool places in this country, but everyone is hell bent on staying where they are comfortable. Look at the state of Colorado for example or Arizona if you like warmer weather. I was born and raised in California and swore I would never leave. I was a Naval Officer and had no choice to leave my beloved CA after 30 years of calling the state my home. Now I would never go back. I have lived all over the country and love how much more I get for my money. I know own three houses in three different states. Break away and make your money work for you instead of you working for your money. I still love California, but living in a slum type house that I can buy for $400K+ is just stupid. You can get a great new job that probably pays you more anywhere else and you will be able to have a great house. Don't mortgage your future for a shack in CA. Think about it, do some research.
2007-02-20 05:58:48 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I would try to only do about a $250,000 mortgage. If you do more than that, your mortgage payments are going to be much higher than $2000 a month. You can do some trial and error for yourself using a mortgage calculator (one at http://www.bankrate.com/gookeyword/search/story-mortgages.asp).
There are many options that you have that will allow your payment to vary a little (i.e. shorter/longer term mortgage or variable vs. fixed interest), however if you can only afford the $2000 per month you are going to be restricted into a getting a lower mortgage.
Obviously the more money that you put down on the house, the less your mortgage payment will be. I don't know if the laws vary from state to state, but if you have a 401K look into borrowing against it. I know in NJ you can borrow up to $10,000 without incurring any penalties as long as it is used for a first time home purchase.
Good luck.
2007-02-20 05:44:54 · answer #3 · answered by mychelleb25 2 · 0⤊ 0⤋
What's holding you back is your DTI and down payment. Debt to income ratio. Banks have a particular # that's allowed usually 40%. You can get a loan with out using your income. It's called Stated Income. Where you state how much you make. Now to over state your income is against the rules so to speak. The mortgage company or lender can get into trouble for allowing it. Also there's another type of loan qualification called a NINA no income no assets. They don't even want to know what you make or what you owe. Ask a local mortgage company or call the Bret or Edward at the company I used to work for One Earth Mortgage. Last I heard they were opening a branch in Calif. you can go to their website www.oneearthmortgage.com to get the 1 800 #. They are very, very honest and will tell you exactly what programs are open to you.
Good Luck.
2007-02-20 05:49:18 · answer #4 · answered by flfox 3 · 0⤊ 0⤋
You really need to call a few mortgage companies (start with your bank) to find out if you would qualify for that type of loan. You might be able to qualify depending on your salary (your credit is good), but you will probably need more than $1500-2000 per month for that much of a loan, unless you put down more than $20K. There are many sites on the web too that will estimate how much your monthly payment would be. This site has some helpful information on loans & mortgage calculators. Good luck!
http://loan.divinfo.com/
2007-02-20 05:36:10 · answer #5 · answered by Reenie 3 · 0⤊ 0⤋
Im going to say no, unless you can get a lot more for a down payment.
House values should remain stable, or go down in the next few years in So Cal, especialy in less popular areas like hemet, riverside, hesperia etc.
The house values are really skewed there, how does Las Vegas or Phoenix sound?
By the way...if you afford an extra $750 a month, you should be investing that money...like through TD ameritrade, or one of those other online brokers....if you invest 750 a month for 30 or 40 years, you will be way further ahead than if you bought a house.
2007-02-20 05:34:01 · answer #6 · answered by bubba 1 · 0⤊ 0⤋
Look into an FHA first time home buyers loan and see where you qualify. Talk to Country Wide Home Mortage. Stay away from borrowing from your bank there lending rates right now are about 1.75% to 2.3% above the prime right now. An FHA will keep you right at the prime or just bellow. Good Luck.
2007-02-20 05:50:23 · answer #7 · answered by scokeman 4 · 0⤊ 0⤋
There are ways, if you can show more income, like a roommate who is going to rent from you in a long run. However, do you want to become a "house-poor"? Got a house, but can't afforad anything else.
2007-02-20 05:36:32 · answer #8 · answered by paobay 4 · 0⤊ 0⤋
Not a snowballs chance in hell sad to say....there is no way you will find a house in a decent area for 220K
Look into Fresno...much cheaper there.
2007-02-20 05:38:04 · answer #9 · answered by Johnny A 5 · 0⤊ 0⤋
No, unless your stripping on the side
2007-02-20 05:35:02 · answer #10 · answered by Yvonne 4 · 0⤊ 0⤋