Reasonable or not?

Question

I'm 24 years old, currently making about $60k/year and have begun a search for my first home. My current monthly expenses are $600 for car payment, gas, and insurance plus another $1,100 for other expenses. I am single, no kids and have no student loans or other debts. I have $30k to put towards a down payment. I'm looking at places between $215-300k. I've estimated a monthly payment of approx. $1,300/month depending on whether I purchase a house on the lower or upper end of this range. Is this reasonable?

Of my expenses, the only thing required is my $300/month car payment. The rest is made up of food, gas, car insurance, cell phone, hobbies, etc.

Answer 1

They say you can afford 3 times your salary which would be around $240k. Try going to one of those mortgage calculators on Yahoo! Real Estate. They can be very helpful to determine how much the payments will be. Also, get with a realtor. They will tell you exactly how much home you can buy and what your payments will be.

Answer 2

$60,000 per year is $5000.00 per month. 45% a reasonable debt to income ration) of that is $2250.00, minus your current stated other debt this would allow you a PITI of $550 a month for a payment on a new house and that isn't going to get you anywhere near what you re looking for.

The good news is that mortgage lenders do not count things like gas, insurance, or food. They only count your monthly installment and revolving debts (think car payments and credit cards) because the qualifying rations factor in those other things that we all have to pay.

Schedule an appointment with an experienced mortgage banker and find out what you can and cannot afford before you go out and fall in love with a house you can't qualify to buy.

Answer 3

I’d say no. In my area, a $150K mortgage payment (here it also includes insurance and taxes) is around $1200.

Bankrate.com has a lot of good info, but I’m thinking their mortgage calculator doesn’t factor in insurance. http://bankrate.com/brm/mortgage-calculator.asp