Buyer first home … do not know about FHA loans or mortgage amount for my income?

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I live in Colorado, just purchased a new job where I have a minimum of 68 500 (the medical field, so I adapt to changing my income to about 75,000 hours of overtime) to make. I really want to buy a house, but being a new graduate, I have basically very little for a down payment. I do not know how payment of housing I can afford per month and still save money, etc. No student loan must be paid, the government has done for me, and I have other small monthly payments without children, and I’m single … My question is, are there any disadvantages to an FHA loan? Can someone give me a clear answer to how I can afford a mortgage, rather than generic online calculator? DO NOT REPLY general advice, which I have available. I want someone to hear personal experience. As a first time buyer, I will not live too far over my income and another crash in the housing market … Thank you!

  1. Reply
    Margaret I
    February 3, 2011 at 3:37 pm


    There is a good site at and the professional there might be able to help you out

  2. Reply
    February 3, 2011 at 4:28 pm

    So you think that you’re ready to buy your own home? Hopefully you’ve done a little research online to make your first home buying experience a good one. First of all you should contact a mortgage broker that will preapprove you for your new mortgage. This is now more important than everloan application. The mortgage broker will also run your credit. With all this information in hand the mortgage broker will see if you have enough income for the price of the home that you would like to purchase.

  3. Reply
    February 3, 2011 at 4:36 pm

    If you’re a first time buyer then you have to do your homework before you jump into the biggest investment of your life. Many big cities offer free courses and sometimes financial assistance if your income is within ranges. There are also non-profit organisations that will educate you and help you get financing. FHA is just one program. Look in the phone book for “Acorn” or “Affordable Housing Dept” or “Community Developement” in your city. It’s worth a day isn’t it?

  4. Reply
    Tara S
    February 3, 2011 at 5:29 pm

    I have an FHA loan which I got in 2005. I live in the bay area, California (homes are expensive here – not sure how Colorado compares).

    The upsides were:
    – I bought with no money down (I had similar income to yours and 720 credit score)
    – They even covered closing costs, so my loans (total of 3) came to 103% of the purchase price
    – The rate I got at the time was unbelievable (4.75% 30 year fixed, I think now they are at somewhere around 5.75% but I could be wrong)
    – It is a fixed rate for 30 years, no worrying
    – I was/still am not required to make any payments on the 2nd and third loan.

    The downsides were:
    – You have to pay PMI (private mortgage insurance) no matter what for the first 2 years, after which you might be able to get it removed if your home’s value rises and fits certain criteria. This part is really irritating because (in my case) it is about $ 220/mo that I am basically throwing away for the priviledge of having this loan.
    – You must live in the home for the life of the loan (you are not allowed to rent it out for any reason)

    The rate difference between then and now is quite substantial. If I was in your shoes, buying now with no down payment I think I would:

    – buy a home with CAL FHA (their rates aren’t THAT much better than rates you can get elsewhere, but it’s nearly impossible to find 100% loans elsewhere these days)
    – they have no prepayment penalty (I think – please check on this as it’s been a while for me) so you can refinance if you need to
    – you can buy with no money down which is nearly impossible to do otherwise these days
    – I would ONLY do this if I was buying a foreclosure or a short sale in a GOOD area in your state (a place more likely to weather the housing crisis right now) where I would be walking in with equity. Make SURE your agent gives you comparable RECENT sales of same size/same lot properties, you want to have equity on day one, in case values come down.
    – I would ONLY do this if I wanted a *home* as opposed to a get rich quick scheme. You could be in this home for the long haul before prices stabilize and we start seeing growth again. If you walk in with equity there’s less/little risk that your value goes down and you get stuck owing more than the home is worth, BUT keep in mind that it will be difficult to sell your home because everyone is having a harder time getting loans, and that means less people can buy. So you need to think long term.

    I do think it is a good idea to buy right now with no money down because prices are low, and if you can get a good deal and a good loan that you are confident you can maintain for years (think 5 years) then you will come out ahead in the long run.

    Note that if you did have a down payment, I would have suggested to explore other loans, because the PMI is money down the drain, and if this is your first home and you’re single with no kids then it’s unlikely you’ll be living in it for 30 years anyway. But (not knowing anything about the Colorado market) my opinion is that going with CAL HFA in your situation is a great choice.

    (And if I can be annoying for a minute and suggest about something you didn’t ask — don’t fall into the temptation of leasing a car or buying a brand new car with payments … really bad way to spend your money with no appreciation whatsoever! You’ll do much better to buy a used car and get yourself into a home. I see so many people buying $ 30K-$ 40K cars with payments, it’s killing me!)

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