Few Questions For First Time Home Buyer?

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So I am very new to this whole buying a home ordeal, and kind of dense about it all as well. I had a few questions that I hope you can answer for me:

1) I make about $ 1400 a month, do you think I would qualify for a mortgage? I have excellent credit, and I’d be moving in with someone who has poor credit. Is this a problem?
2) If I do qualify, what would happen if I wanted to purchase a house for $ 90,000 to $ 100,000 with no money down?
3) If I wanted to put 20% down, could I take out a mortgage loan and use that towards a down payment on the house? What is the interest rate on a mortgage loan?
4) Addition to question 3, can I take out a loan as well for closing costs?
5) So figure I put 20% down on a house that costs about $ 90,000, what would my monthly mortgage payment be? About $ 500 or more?

Thank you for all the help! Always appreciated!

  1. Reply
    May 21, 2011 at 3:56 am

    with your salary and exc credit, you are home free at
    the price you are ready to pay.

    a; find a BUYER’s agent or even an exclusive buyer’s agent and
    never ever allow dual agency.

    b; ask your banker for the best interest rate you can qualify for.

    get back to me for more help

  2. Reply
    May 21, 2011 at 4:17 am

    First off, there is no such thing as a “mortgage loan”. Second, the only no money down loans right now are from the USDA, and only in certain areas. Your roommates credit only applies if you are trying to use his income. As for how high of a mortgage you qualify for, it’s your monthly debt(credit cards, car payment, student loans, and anything else that shows up on your credit report) plus your new mortgage, insurance and mortgage insurance. Double that, and that is what your income, before taxes, has to be. Anything less is a problem.

    You can’t borrow a down payment. You can receive a gift from a relative if it’s an FHA loan.

  3. Reply
    May 21, 2011 at 4:52 am

    It would all depend on where you live. Where I live you wouldn’t get much making 1400 a month.

    If the other person is going to be on the loan it will be a problem. If it’s just you on the loan, and that person moves in without their name on the loan it’s not a problem. Hopefully you won’t have any trouble getting money out of that person to help with the bills.

    Unfortunately I’ve been told that there are no more FHA programs that do the no money down deals anymore since the houseing market took a s**t. However, there is a program that I’m using. It’s through the USDA. It’s called the USDA Rural Development Program. There are two types of loans they offer. One is the Guaranteed Loan Program where you borrow the money from a mortgage co but don’t have to pay PMI because the gov’t backs the loan instead of the PMI incase you default. There is a fee for it of 2% of the total loan. In my case I paid 4000 up front. I calculated the difference with paying PMI and I’ll save thousands of dollars. Then they have the subsidized loan where you borrow the money from the gov’t at a subsidized interest rate anywhere from 1% up to full market rate which is somewhere around 5%. There are some restrictions with these loans. You should contact the USDA for further info on these loan products. http://www.rurdev.usda.gov/

    I’m not sure I understand your question in full, but I’ll answer it as best as I can. I don’t think you can borrow the 20% down payment. Me personally, I wouldn’t want to borrow any more than nessarry because you’re already going to be deep in debt with a mortgage. Plus you would pay more in interest.

    I think the rate is somewhere around 5%

    I’m not sure if you can take out a loan for the closing costs or not. There is an FHA program that offers $ 10,000 in settlement help. You would have to talk to a mortgage co to get the full details of it.

    If you put 20% down on $ 90,000 you would borrow 72,000 you’re looking at about 370 principal and interest per month not including property tax and homeowner’s ins. This is also with a 5% interest rate with no PMI. Here is a link to a mortgage calc. http://www.mortgagecalculator.org/

    You really should consult a mortgage company to talk about the different loan programs available to you. Also, contact the USDA like I mentioned above. I’m using the guaranteed loan program and it’s wonderful! I don’t have to pay PMI every month and that saves a lot of money.

    I hope this helps. I couldn’t give every detail of the USDA loan products, because it would be too much typing. Look into it and contact a loan officer or realtor for questions regarding FHA stuff.

  4. Reply
    May 21, 2011 at 5:36 am

    1. Not a problem as long as you don’t expect that person’s income to help qualify for the loan. If the loan is just in your name, you’d be OK

    2. With income of $ 1400 per month, it’s unlikely that you’d qualify for a mortgage that high. And it’s extremely unlikely that you’d find a mortgage with no money down – you’d need 5% or more down, plus closing costs.

    3. The down payments is money you need to have separate from the mortgage – the mortgage doesn’t cover a down payment.

    You might be able to roll some of the closing costs into the mortgage if you qualify for a loan large enough, and the house appraises high enough over what you are paying. But again, on $ 1400 a month income, probably not for a $ 90-100K house.

    If you put 20% down on a $ 90K house and didn’t roll in any closing costs, you’d have a mortgage of $ 72,000. Principal and interest payment on a 30 year, 5-1/4% mortgage if you could get that would be around $ 400 a month – taxes and insurance and PMI would be additional, and would almost surely take it over $ 500.

    Talk to your bank- they can tell you how much of a mortgage you’d qualify for.

    Good luck.

  5. Reply
    †Ask Me Anything†
    May 21, 2011 at 5:38 am

    If you make $ 1400 a month, you cannot afford a 100k mortgage. You can’t even afford a 90k one. Also, you cannot borrow a down payment. Those 80/20 loans that were handed out in the housing boom 3 years ago are long gone, due to people getting in over their head, and since they couldn’t even save anything towards a down payment, they really had no business owning a home. You seem to be in those shoes.

    If you are going to be putting down 20%, make sure it is your own money you have saved up. You cannot borrow it.

    And, yes, there will be a problem moving in with someone who has poor credit, as they will probably at some point screw you over too.

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