No late payments or over the limit charges, Because of the down turn of the economy today i know its a great time to buy a home either now or in the near future... before the buss cycle starts again. so any suggestions as for how much we should be looking at in terms of pricing and time will be appreciatedAre we ready to buy a home?
Hey buddy,
If you are not married, you are not ready to buy a home together. Believe me, this is a powder keg!
You would be better off buying an investment property together with a partnership agreement. It will be much easier to split later if the relationship ends. It would also be easier for you to qualify on, since you can use the property income as an offset to the mortgage payments due.
I would recommend a four-plex in most markets, but I don't know where you live.
As far as making a recommendation based on your figures, you don't have enough cash in reserves. $6K is nothing! A bank wants to see at least two months' PITI payments in reserve in addition to the down payment. You are not there yet.
This could also stand in your way for the fourplex, but there are some ways around that for an investment property, if you decide to live in one of the units.
I would recommend that you determine how much a house in your price range would cost in terms of monthly payment, taxes, insurance, and utilities increase (don't forget water, trash, and maintenance). Take this figure, subtract what you currently pay in rent, and then put this amount into a savings account on the 1st day of every month for one year. If you have a bad month, and you have to pay late, pay an additional 5% of the total amount to your account as a late fee if after the 15th. This makes it real.
If you find that you really can handle this payment for one year, you will also find that you have significant reserves available, and you will then be ready to buy a house. You might get married in the meantime, which would remove my first caveat.
While interest rates may move up in one year, I don't think that property values will move that much. If you have even one month where you are unable to pay yourself on time, you will thank me that it wasn't a real mortgage payment that was going to kill your credit.
Even though it may cost you a little bit more to move forward one year from now, I think that you will be much more confident about moving forward if you know for sure that you can afford the payment (based on experience), and that you have cash to fall back on in case your income situation changes.
Pay off all the credit cards, and pay down the car as fast as you can. Good luck to both of you! Get married. :-)Are we ready to buy a home?
Yes, on the numbers side you are ready to buy.
However, on the personal side, no. DO NOT buy a home with a gf. This person is only a gf and things happen. (note, you didn't call your your soul mate, etc, just a gf).
Forget about the BAD advice posted in response to your question.
Use both a Broker and a Bank to work up a scenario for you. Legally the bank is allowed to hide (';the surprise ending';)fees that the Broker is not, such as back end points or rebate.
So you'll never know what you could have had otherwise.
Using all of the information obtained ask yourself if you're ready to make sacrifices to commit to making the mortgage payment in a timely fashion each and every month, I'm talking a real ';gut check';!
All the while consider the fact that many of the people facing foreclosure right now started out with qualifications just like yours and unrealistic goals, ie; we want to keep taking two vacations a year, as soon as I get my house I'm getting a Mercedes, we want to still eat out four times a week... etc.
Follow these guidelines and you'll not only buy a home, you'll keep it!
i think you answered your own question... just use a good bank not a mortgage co. lock in on a good rate and get what you want... here new house's are about $100 a sq.ft. repos are about 65 cents on the dollar owed..
This really should be more of a personal question than a financial one. If you aren't ready to marry this woman, you probably aren't ready to buy property with her.
Read Home Buying for Dummies.
http://www.amazon.com/Home-Buying-Dummie鈥?/a>
As a general rule, lenders will let you spend up to 1/3 of your gross monthly income on your mortgage (principal, interest, taxes, and insurance). Your combined monthly payments with revolving credit card balances and auto payments can go up to 38 to 43%.
I think the pricing depends on how much income you have left over after you pay your bills. The usual figure is 1% of the sales price is your monthly payment. Example: the home is 139000, your monthly payment with taxes and insurance would be 1390. That is just a base figure and it would depend on the state you live in and how much the taxes are and if your insurance is more due to flooding or natural disasters etc. You make about 80k with your G/F so you could probably get something around 300k but that is if both of you are on the loan. If anything should happen to the relationship you may have issues with the house. You are really the only one who can decide if you are ready or not, buying a home is not a big deal if you are a responsible person which by the looks of what you wrote you are and so is your G/F. If your relationship is solid, why not go ahead and take this opportunity while were in the buyers market. You can always flip (resale) later if you decide you need to get out of it.
Do you feel as if you are ready to buy a home? Real Estate is always a good investment, unless of course you buy outside your means....
Buy modest housing at a reasonable price....and you can't go wrong, unless of course you don't make your payments.
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