Thinking about buying a condo with my fiancé in Los Angeles…Do you think we will qualify and about how much?
His Score EX 750
Mine EX 710
No negatives
INCOME
Gross income combined is 51k
My fiancé makes another 4k a year but is not reported or taxed…I know this won’t help us.
EMPLOYMENT
I am done with school and I am currently working in the same field I studied. I have been working with my current employer for a year and 3 months. Prior to that I worked at another company in the same field for 1 year.
My fiancé has been at his employer for a year and 6 months. Before that he worked for a sporting goods store for 3 years.
DEBT
Together the only debt we have is a 239.00 monthly lease payment on my car.
No school loans.
We have plenty of Credit cards but all balances are very small and paid off every month if any.
I also contribute 0 a month to a IRA retirement account.
ASSETS
25000K in savings to spend on down payment AND closing cost.
My fiancé has a 2006 truck with 15k mileage –Paid off… (I don’t know if that counts)
I have been looking at those online mortgage calculators but I don’t know how true they are.
Let me know what you guys think… THANKS!
Kind of a tough question. Typically, banks want your debt to income ratio to be less than 40% which based on what you said, your current dti is about 6% (car lease). Looking at that, to get to 40%, you could have an additional $1,400 in monthly payments. You’d have to back out your escrow (taxes and insurance) from that. Just assume that to be around $300 per month. (just a guess). That leaves you with about $1,100 per month for just the mortgage. You should honestly ask yourself if you can afford a total house payment of $1,400 per month along with you other expenses.
Considering $1,100 per month mortgage, on a 30 year note at 5.5%, that’s a balance of about $190,000. Add in your $25k down payment and that gives you about $215k that you could afford.
That’s based on a 30 year note. There are millions of financing options that could change that.
Generally speaking, you can qualify for a total of approximately
$ 1,600.00 per month in term debt. $ 1,600 less the $ 239 would leave you with $ 1,361 for a mortgage (PITI-principal, interest, taxes and insurance). Other items will be considered and could increase or decrease the amount of the mortgage you would qualify for….
You should qualify, especially with the good credit scores and money to put down. You also don’t seem to have much debt, which will help your cause.
Time at job is a factor, but you both have been at your jobs over a year, so that is good. Being at your job under three months can count against you.
The only thing that might be a negative is the low combined income. That can hurt you if you go for something really expensive because mortgage companies don’t like to see too much of your income going towards your mortgage.
You could talk to a lender to find out what you can afford. A Realtor could also help in this area.
Good luck.
I don’t know why you are asking that question here, you need to go to a bank and see about getting preapproved. They are the only ones who can honestly answer that.