Do I make enough to buy a home?

Question

Ok here is my info.

I make $43,000 a year before taxes. I am single. I have a $325 a motnh car Payment and $156 month Insurance payment.

Home interested in: I put an offer in for $110,000 taxes yearly are $3,112.

Credit score of :795

Can I afford this home and all expenses?

Answer 1

my answer is yes. i ran a hypothetical scenario looking at 100% financing with PMI (since you did not mention a down payment) at a rate of 6.65% for 30 years. your front debt ratio (projected housing expense divided by monthly gross income) would be about a 29.75% for my scenario and your back end ratio (housing expense plus other monthly debts) would be about a 38.82%. your monthly auto insurance is not factored into your debt ratios just as utilities are not. if you had credit card monthly minimums, student loans, other personal loans, they would be factored in to your debt ratio. your credit score is well about average which would be a compensating factor as well.

since you have not mentioned any assets, i am hypothetically assuming you have enough for closing costs. depending on which state you live the closing costs could range from approx $2500 to $5,000 which you could negotiate for the seller to contribute up to 3% of the purchase price towards your costs, but you would still need to have a minimum of $500 into the transaction for certain conventional mortgage products.

Answer 2

You should be able to afford the home. The rule of thumb is that your home should cost 2-3 times your income. If you have saved your money and can pay 20 percent down, you will avoid mortgage insurance. With a 6% 15 year loan, you payments will be around $1,100, including taxes and insurance. About $215 less with a 30 year loan.

Now is a good time to buy a home. Over time its value will increase. Maybe not in the next 2 years, but you have a long way to go. Much better than paying rent.

Answer 3

Well, you have a great credit score.

How much rent are you paying now?
How are you managing with the payments you have now? You do not mention what else you have in outstanding credit. That will be important on an application.

Your mortgage payment would probably be around &1200.00 to $1500.00.

Lay out a budget and see how it looks. Use the above payment as an approximate. It should include the principle, interest, insurance and taxes.

Of course you do realize you should have done all of these before you put in a bid on the house.

I say these words to you PREAPPROVAL. Go to your bank, finance company, mortgage broker or who ever , and get approved BEFORE signing a contract. That is the way to find out what you can afford, or what a financial institution will lend you. Any contract should say upon financial approval.

Annual payments...
House...................... 15,000.00
Car payment.............. 3,900.00
Car Insurance................ 800.00
House electric............. 1,800.00
Gas for house............... 600.00
Cable............................. 600.00
Food............................... 5200.00
Gas for car.................. 1500.00
Credit cards ???????
Total anual outgo. $29,400.00

These are estimates. Good luck.

Answer 4

In theory YES, you can afford this home even at 100% financing. Speak with a mortgage professional that you know AND trust. have them explain ALL your options.

Your Realtor should have asked you if you were pre-qualified before you actually put in an offer. How many days until your closing? Depending on your state - 30 days in the normal rule of thumb. But, in generally you need about 2-3 weeks on a purchase.

Hope this helps, Good Luck

Answer 5

Do you have a down payment? I would say just on a quick look at the numbers it looks ok but I would like to see lower taxes & car payment with a decent down payment of $10k-20k. I just hate to see people up to their eyeballs in debt. I will say that owning is certainly better than renting and at least you are investing in yourself and that is a good thing.

Answer 6

No problem with your income and credit score and you should get a good rate also. Go to your local credit union and apply for a loan.

Answer 7

Don't you have a real estate agent? And didn't your agent tell you if you qualified to purchase a home, before you made the offer? Are you seeking answers, or do you just need people to know you're buying a home? Seriously.

Answer 8

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Answer 9

Calculate your total monthly payment. First, see if YOU are comfortable with these payments. You know best if it fits into your budget. Sounds like you'll have no problem qualifying. http://www.choicefinance.net/calculators/index.htm