PiggyBanker
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Location: Pacific NW
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| Mortgage on $52K/year??? |
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Gross (dual) income of $52K. Current monthly debt includes the following:
Credit Cards: $100-$200, depending on how much spouse charges
We really want to get a house; car will be paid off in about nine months; one of us has a temp job that may not last until the fall (if lost, this would result in $5K income loss).
Not sure if we'll be in the same area in 3-4 years; however, with housing prices thought it would be good to invest a condo. Credit scores: high 600s. Another student loan will be added, as I'm in school (and will be for the next six years), but I don't have to worry about those loans until after I graduate.
About how much could we qualify for?
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Wed Mar 23, 2011 5:20 pm |
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oldguy
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The $47,000 from your 'permanent' jobs will be used for loan qualification, the usual factor is 28% of gross - so your payment limit would be $1100/m. If you get a 30 yr 5% loan, the max loan would be $205,000. So, if you put $20,000 down, you could theoretically buy up to $225,000. Of course that is 'high limit', it would be a stretch for you.
What is your major?
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Wed Mar 23, 2011 5:45 pm |
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PiggyBanker
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No way we could put 20% down; 3.5% maximum. Paleontology for a major.
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Wed Mar 23, 2011 5:54 pm |
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coaster
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Your income is enough to qualify. BUT.....
As with any major financial decision you have to ask yourself not "can I afford it" but even more "is it a good decision, financially?" Will this just get you what you want, or will it put you ahead?
A couple things that are against this being a good financial decision, in my opinion: 1) indefinite how long you'll be in the house. Generally, you should plan to be in a house at least five years to recoup your expenses. These days probably longer, and probably much longer unless the housing market picks up. 2) you're still in school; that's your first priority. Owning and properly caretaking for a home is a major drain on your resources: money, time, effort, distraction. It's not going to help you get educated. 3) a condo, depending on the location, is often a poor second to a detached home on its own lot. The only time a condo as a real estate investment makes sense is in a high-density area where that's the principal means of home-owning.
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Thu Mar 24, 2011 7:18 am |
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PiggyBanker
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| Thanks |
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Thanks for the advice; we live in a university town, so I was thinking a condo would be a good choice, but your words of advice have me re-considering...as the town, being located in a desolate area, has been hit hard by the economy.
Neither my husband and I are handy, which is why a condo looked appealing. With my grant-funded position at the university, it's on a per-semester basis, so, as mentioned previously, there's a good chance that income would be lost after two semesters.
My husband wants to get a house because he feels that he should I'm in my early 20s; he's in his mid-30s...and also because his friends are getting houses and the interest rates are so low. We'll have to weigh the advice, but I see renting as more advantageous right now, personally.
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Thu Mar 24, 2011 1:14 pm |
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littleroc02us
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Remember this advice, houses are not always a blessing and not everyone can afford them. On that note, your monthly income is around $3080 and your stated bills are around $880 and that doesn't include things like gas, food, entertainment right? That could leave around half of your income left for saving a down payment on a house. IMO it seems like you have almost a third of your income paying off debt, you are going to be adding debt when you take a student loan for graduate school and there may be a job loss which will reduce income. I'm not seeing a rose petal image here. I would do the following because as you know there is a house on every block.
1. EF fund to start with of $1000
2. Pay off your debt "snowball method" Pay for grad school with cash.
3. Beef up the EF fund
4. save 15% for retirement
5. Save 20% down payment on a house.
* I just think your way is to risky. Your not ready for all the problems a house can entail. What happens if the house goes down in value and you are moving to another state. My advice is to wait unitl you are more financially secure.
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
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Thu Mar 24, 2011 2:18 pm |
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oldguy
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I agree with coaster and littleroc - more to it than 'afford'. I'm a longtime landlorfd, I would never buy a house for a 4 or 5 yr payback - I have one rental that I've owned since 1980, for me they are longterm investments.
quote:
Paleontology for a major.
Great, how far along are you? BS geology, biology? And what does husband do - steady career job with good income stream? After you graduate, do you plan on working for an oil company or a university?
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Thu Mar 24, 2011 5:06 pm |
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PiggyBanker
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Just started...so a good 4-6 years, depending on how quickly I get through the courses. BS, geo and physics. Hubby has a steady income stream, but he's paid very low for the area we live in (southwest).
No, I don't want to work for an oil company; I would like to work in paleontology, so museum or university work will suffice. However, my other concern is the lack of jobs and the competition for those jobs.
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Thu Mar 24, 2011 6:44 pm |
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jerrykhang
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Location: 61b, Toky, HCM
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For me, i want to work for informative technology company, i will help me to overcome my financial problem, and get for new house next year. 
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Fri Mar 25, 2011 3:51 am |
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