How much house?

Question

$20K per year earnings
$9000 saved
799 FICO
No debt

Answer 1

There HAS to be an online calculator somewhere to tell you how much you can afford. Regardless of what area you live in (yes, it does have something to do with cost of living...but your mortgage payment will remain the same depending on the type of mortgage you end up getting), your payment needs to be one that you are comfortable with. People make the mistake of buying what they qualify for and then they are "house-poor" - they live to pay their mortgage note. Decided how much per month you can afford, find a calculator on a website, figure out approximately how much insurance and taxes will be annually, and put it all together to see what you can afford. Don't listed to a mortgage broker - he'll tell you you can get more than you really can (or should).

Answer 2

No more than 25-33% of your income should go towards a mortgage payment on a monthly basis. May not sound like you'd be buying a big house, however, it depends on what a Seller is willing to sell it for.

If its an estate sale and the relatives just want to dispose of it, you may get lucky. Or find a fixer upper.

However, yes, the loan interview will be best. Besides, you don't say what line of work you're in or how long you've been working there. Which is important to a lender who wants a client who has a stable income.

On the other hand, if you don't have any debt, it may be difficult to prove that you can handle a mortgage. FICO 799 is impressive, however, if you've only had a $2000 car in your whole life and no credit card, it's still not showing much provable ability to handle a significant debt.

Answer 3

The best question gets the best answers. You may need to tell us how urgently you need this house and in what area. If it is for an investment I say go to Detroit and buy a house outright with your savings. Since you live far away you can deduct traveling expenses each year when you go to rent the house again after some minor repairs. If your goal is to be in serious debt in California go for it. They will take any offer if you can take over the first mortgage. Ignore the many phony third mortgage foreclosures.

Answer 4

Bankrate.com has on-line calculators that can help you estimate how much house you can afford and how much your monthly payments would be for different priced homes.

http://www.bankrate.com/gookeyword/rate/calc_home.asp

You should also talk to a reputable mortgage broker who is familiar with the area you live in.

At the point I was making $20,000.00/year. I bought a house for $75,000.00. I had enough cash to make a 20% down payment ($15,000.00) and pay all of my closing costs in cash, so I financed $60,000.00.

Good luck.

Answer 5

Above all, it DEPENDS ON YOUR AREA. Your region. Your locality. And your neighborhood within your locality. I cannot say, from my seat in Ohio, what your income will garner you in Fort Worth, Texas, or Palm Springs, California.

It only takes 15 minutes of sitting down with a loan officer at a bank to get a stamped piece of paper of what you qualify for. Do it.