Posted on: 25th Apr, 2007 05:21 pm
Hello,
I am becoming quite frustrated and ultimately depressed while trying to purchase my first home. My frustration stems from the fact I am unwilling to discuss anything with a loan officer, as I have a difficult time trusting "Sales" professionals. However, I was hoping some advice from piers might point me in the right direction.
I am going to be getting married this summer, and I am just trying to find a starter house. The starting price for a small ranch in southeastern michigan, is roughly $125,000. However, each time I fill out one of those 'Mortgage Calculators' it says I can only afford a $92,000 mortgage.
My financial situation is as follows. My annual income is $40,000, and credit score is 750+. Currently my only debt is a monthly $250 car payment and a $111 Student loan payment. My fiancee is graduating from college this spring, but will be attending law school in the fall and will not be able to contribute to the household income. She received a scholarship for law school but if we take out student loans can I consider this additional income, and possible be able to afford a higher mortgage? Or are there any mortgages designed to accomodate families while members are in school?
I would really appreciate any and all advice people have to offer. Thank you again for taking the time to read this.
White5312
I am becoming quite frustrated and ultimately depressed while trying to purchase my first home. My frustration stems from the fact I am unwilling to discuss anything with a loan officer, as I have a difficult time trusting "Sales" professionals. However, I was hoping some advice from piers might point me in the right direction.
I am going to be getting married this summer, and I am just trying to find a starter house. The starting price for a small ranch in southeastern michigan, is roughly $125,000. However, each time I fill out one of those 'Mortgage Calculators' it says I can only afford a $92,000 mortgage.
My financial situation is as follows. My annual income is $40,000, and credit score is 750+. Currently my only debt is a monthly $250 car payment and a $111 Student loan payment. My fiancee is graduating from college this spring, but will be attending law school in the fall and will not be able to contribute to the household income. She received a scholarship for law school but if we take out student loans can I consider this additional income, and possible be able to afford a higher mortgage? Or are there any mortgages designed to accomodate families while members are in school?
I would really appreciate any and all advice people have to offer. Thank you again for taking the time to read this.
White5312
Hi White,
Don't get frustrated, you should be happy few months down you are going to get married. :)
Many online calculators give different figures and the one I used gives me figures which tells you can afford a $125,000 house.
With your annual income of $40,000
Total monthly debts - $250 (if there is no student loan payment after she gets scholarship)
Credit score of 750
I am assuming other figures like,
down payment of $25,000
Property tax rate (1% = $1000/yr for 100K house)
Home Insurance rate (0.5% = $500/yr for 100K house)
Mortgage of term 30 years
Interest rate of 6.5%
if your actual figures match with the assumptions I have made then you can afford a house up to what your requirement is.
If you can give the exact figures then I might tell if a $125,000 house could be possible for you or not as I have made quite a few general assumptions (like the downpayment amount and tax rates).
Miller
Don't get frustrated, you should be happy few months down you are going to get married. :)
Many online calculators give different figures and the one I used gives me figures which tells you can afford a $125,000 house.
With your annual income of $40,000
Total monthly debts - $250 (if there is no student loan payment after she gets scholarship)
Credit score of 750
I am assuming other figures like,
down payment of $25,000
Property tax rate (1% = $1000/yr for 100K house)
Home Insurance rate (0.5% = $500/yr for 100K house)
Mortgage of term 30 years
Interest rate of 6.5%
if your actual figures match with the assumptions I have made then you can afford a house up to what your requirement is.
If you can give the exact figures then I might tell if a $125,000 house could be possible for you or not as I have made quite a few general assumptions (like the downpayment amount and tax rates).
Miller
White you should also check how much down payment you can afford for the house. Your debts are quite low and this would help you with getting qualified for a mortgage. Plus your credit score is excellent. You should not have much problem in getting a mortgage.
Hi White,
Welcome to our community forums.
First of all, leave aside your frustration. This is the first time you are buying a home. So, be happy. Enjoy feeling that you will be getting your own home within a short time. I can understand that you may be coming across some problems but don't lose hope. Give some time and things will turn out well. There are lots of people like you who wish to become homeowners after going through a lot of hassles. So, have patience and keep your cool.
I must say that you have a good credit score which will help you to get loan program at a reasonable rate of interest. You don't seem to have a large debt amount, so your debt-to-income ratio will be optimum. So, don't worry about that. Now, your fiancée may be getting scholarship and it's a good thing to happen but the student loan cannot be considered as additional income which will help you to afford a higher loan amount.
What you should do right now, is start shopping for a loan with some lenders/brokers and see what they have to offer. Take a note of what they say, write down the rates, fees and the payments that are offered to you and then compare how much they are providing you and what you can afford. You may also consider using the Shop and compare lenders worksheets or our community booklet – 9 Steps to financing your home prepared specially for first time buyers.
I must tell you something – not all loan officers will give you incorrect advice. There are some who are really trying their best to help people. Our community also gets very good advice from loan officers like Ken Stampe. He's been around for quite some time and really doing a great job. It's just that for few bad people, many good people are under scrutiny.
All the best :)
Regards,
Jessica.
Welcome to our community forums.
First of all, leave aside your frustration. This is the first time you are buying a home. So, be happy. Enjoy feeling that you will be getting your own home within a short time. I can understand that you may be coming across some problems but don't lose hope. Give some time and things will turn out well. There are lots of people like you who wish to become homeowners after going through a lot of hassles. So, have patience and keep your cool.
I must say that you have a good credit score which will help you to get loan program at a reasonable rate of interest. You don't seem to have a large debt amount, so your debt-to-income ratio will be optimum. So, don't worry about that. Now, your fiancée may be getting scholarship and it's a good thing to happen but the student loan cannot be considered as additional income which will help you to afford a higher loan amount.
What you should do right now, is start shopping for a loan with some lenders/brokers and see what they have to offer. Take a note of what they say, write down the rates, fees and the payments that are offered to you and then compare how much they are providing you and what you can afford. You may also consider using the Shop and compare lenders worksheets or our community booklet – 9 Steps to financing your home prepared specially for first time buyers.
I must tell you something – not all loan officers will give you incorrect advice. There are some who are really trying their best to help people. Our community also gets very good advice from loan officers like Ken Stampe. He's been around for quite some time and really doing a great job. It's just that for few bad people, many good people are under scrutiny.
All the best :)
Regards,
Jessica.
Golly....
Samantha named me personally. how cool!
White, different mortgage companies offer different programs and while some use the term "first-time homebuyer" as a marketing gimmick there are lenders who have specific programs for people in your situation.
To answer specifically one of your questions, student loan income cannot be used to qualify for a loan. It has no guarantee of continuance for 3 years.
The best advice I can give someone who doesn't trust loan officers is to minimize your risk by diversification. Intially, talk to several lenders and ask lots of questions. Take the answers from one loan officer and ask another to see if the information holds up. Don't give out your social security number or pay any application fees yet. You need to start in INTERVIEW mode.
then pick 2 or 3 that you feel are most trustworthy and have them all pull your credit within a 24 hour period and have them all put together a basic loan and good faith estimate of closing costs. Then have them compete to explain whey their loan is the best. Bring the information here and let others give you feedback and questions to ask.
that's the best advice I can give you.
Good luck.
Samantha named me personally. how cool!
White, different mortgage companies offer different programs and while some use the term "first-time homebuyer" as a marketing gimmick there are lenders who have specific programs for people in your situation.
To answer specifically one of your questions, student loan income cannot be used to qualify for a loan. It has no guarantee of continuance for 3 years.
The best advice I can give someone who doesn't trust loan officers is to minimize your risk by diversification. Intially, talk to several lenders and ask lots of questions. Take the answers from one loan officer and ask another to see if the information holds up. Don't give out your social security number or pay any application fees yet. You need to start in INTERVIEW mode.
then pick 2 or 3 that you feel are most trustworthy and have them all pull your credit within a 24 hour period and have them all put together a basic loan and good faith estimate of closing costs. Then have them compete to explain whey their loan is the best. Bring the information here and let others give you feedback and questions to ask.
that's the best advice I can give you.
Good luck.
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