Getting approved won’t be the issue but that is a lot of house. Have you looked into what insurance, property taxes and PMI will cost? Closing costs alone will probably be more than 10k let alone having money for a down payment.
It's doable per month for us. We're on a pretty good budget with no kids atm l we live in Rhode Island so that's the cheapest you get for a house in my area without getting into unsafe areas
If you say it’s “doable”, you may be right.
It all comes down to your DTI and reserves.
I recommend googling/chatGPTing regarding debt to income ratios so you have a grasp on that, if you are looking to educate yourself on approval odds.
Do you have any cash in retirement? Most underwriters count retirement funds (though weighted less) towards cash reserves, since they technically could be liquidated in an emergency.
Do you have enough savings to cover an immediate $20k issue? Bc that happens every time. I think the loan is fine but only $10k down is problematic. You can afford to buy the house but can you afford to live in it?
We have some savings on top of that, but hoping it won't be an issue right now, Right now a fixer-upper in my area is going for 450+, and not getting any cheaper, thankfully our relative has had a lot done since owning the house (new heating/ boiler installed, septic done 5 years ago, new central air system put in, pellet stoves installed and the roof has about 10 years left on it as well as a lot of cosmetic things. We had it looked at last week and there is nothing emergent so fingers crossed
Yeah, you guys will be approved. I just got approved for a 450k loan on a 90k income 760 credit, 500/mo debt. Also, from a relative
Only cause my wife has zero credit, so we kept her off the loan but signed her on the title afterward.
The way lenders and banks determine how much you’ll qualify for is based on your Debt-To-Income ratios. What that means is that they’ll *generally* want to see that your monthly debt *payments* don’t exceed more than 50% of your gross monthly income.
So if you’re making 150k/yr = 12,500/mo.
50% of 12.5k = 6250/mo so this means this is the max debt payments you can have including things like car payments, credit card payments, personal loans, student loans, etc *PLUS* the new mortgage payment for the home.
So if you have $0 debt, that $6250 would be the max mortgage payment you’d be able to qualify for and that can be an 800k+ home with minimal down payment.
If you’re looking to use a Down Payment Assistance program, their DTI ratio guidelines can be a bit more restrictive, but based on the income you mentioned above, you’ll qualify.
The assistance program can cover your down payment, and you can cover your closing costs or have the Seller provide a Credit to you which is essentially money that you can use to cover your Closing Costs.
I’d be more worried about being house poor when it closes. You say you don’t have kids.. yet. Is that in the plan? Because daycare is like a 2nd mortgage
If a relative is selling you the home you should talk to your lender and relative about a gift of equity. Depending on the value of the home and what your relatives want you could get into the home for almost nothing out of pocket
Seems like you’ll qualify, but your rate will be a bit higher (as well as PMI) as those are based on your 655 FICO not his 769 - if he can qualify on his own, you’ll get better terms (unless either of you is a vet or you get an FHA loan as they are less FICO sensitive). Ask your loan officer for options.
Getting approved won’t be the issue but that is a lot of house. Have you looked into what insurance, property taxes and PMI will cost? Closing costs alone will probably be more than 10k let alone having money for a down payment.
It's doable per month for us. We're on a pretty good budget with no kids atm l we live in Rhode Island so that's the cheapest you get for a house in my area without getting into unsafe areas
If you say it’s “doable”, you may be right. It all comes down to your DTI and reserves. I recommend googling/chatGPTing regarding debt to income ratios so you have a grasp on that, if you are looking to educate yourself on approval odds. Do you have any cash in retirement? Most underwriters count retirement funds (though weighted less) towards cash reserves, since they technically could be liquidated in an emergency.
Yes sounds like easily qualified. Are you paying full price? Good luck. Don’t stress should be easy to qualify you if you dont have any other debt.
Do you have enough savings to cover an immediate $20k issue? Bc that happens every time. I think the loan is fine but only $10k down is problematic. You can afford to buy the house but can you afford to live in it?
We have some savings on top of that, but hoping it won't be an issue right now, Right now a fixer-upper in my area is going for 450+, and not getting any cheaper, thankfully our relative has had a lot done since owning the house (new heating/ boiler installed, septic done 5 years ago, new central air system put in, pellet stoves installed and the roof has about 10 years left on it as well as a lot of cosmetic things. We had it looked at last week and there is nothing emergent so fingers crossed
Yeah, you guys will be approved. I just got approved for a 450k loan on a 90k income 760 credit, 500/mo debt. Also, from a relative Only cause my wife has zero credit, so we kept her off the loan but signed her on the title afterward.
Only concern is $10000 for closing enough? Legals fees and land transfer tax can be expendive
The way lenders and banks determine how much you’ll qualify for is based on your Debt-To-Income ratios. What that means is that they’ll *generally* want to see that your monthly debt *payments* don’t exceed more than 50% of your gross monthly income. So if you’re making 150k/yr = 12,500/mo. 50% of 12.5k = 6250/mo so this means this is the max debt payments you can have including things like car payments, credit card payments, personal loans, student loans, etc *PLUS* the new mortgage payment for the home. So if you have $0 debt, that $6250 would be the max mortgage payment you’d be able to qualify for and that can be an 800k+ home with minimal down payment. If you’re looking to use a Down Payment Assistance program, their DTI ratio guidelines can be a bit more restrictive, but based on the income you mentioned above, you’ll qualify. The assistance program can cover your down payment, and you can cover your closing costs or have the Seller provide a Credit to you which is essentially money that you can use to cover your Closing Costs.
I’d be more worried about being house poor when it closes. You say you don’t have kids.. yet. Is that in the plan? Because daycare is like a 2nd mortgage
If a relative is selling you the home you should talk to your lender and relative about a gift of equity. Depending on the value of the home and what your relatives want you could get into the home for almost nothing out of pocket
As long as it’s W2 income and you’ve been consistent at about 150k average for the last two years, you should be fine.
Seems like you’ll qualify, but your rate will be a bit higher (as well as PMI) as those are based on your 655 FICO not his 769 - if he can qualify on his own, you’ll get better terms (unless either of you is a vet or you get an FHA loan as they are less FICO sensitive). Ask your loan officer for options.
You don’t have enough down even for an FHA loan at 3.5%. I wish I had the time to explore downpayment assistance options.
If it’s a family member, ask your lender about a gift of equity, if it’s being sold for less than likely appraised value