Will I get approved for a mortgage loan?

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I’m thinking about purchasing my first home. I’m unsure of new mortgage requirements, so I just wanted to give a little background about myself and hopefully someone can give me guidance:

I’m 24 years old – I live in NYC and since real estate is so expensive here, I was considering in scooping up a cheap property in south florida as a vacation home
I make approx 70k per year gross. 40k student loan debt, 1k credit card debt and 15k savings. My rent is approx 1k per month.

I’ve been looking online at condos in florida from 50-100k. What do you think? I know 10% downpayment used to be standard, but I’ve heard 20% being thrown around as a figure (maybe this is just nyc).
also if anyone has any experience with the south florida market (has it bottomed out yet?) please share!! thanks.

2 Comments
  1. Reply
    sarasoreo
    January 27, 2011 at 5:25 pm

    If your buying a vacation home, your requirements are going to be different than if you were buying a primary home. They are going to be much stricter as lenders see vacation homes as a luxury and not a necessity.

    I’m not sure of the exact requirements, but I believe for a 2nd home (which is what this would be considered) you have to put down at least 25% of the purchase price. You can’t have a debt to income ratio of 40% or more, and your credit score should be 720 or above. I may be wrong about the DTI ratio, but it will be in that vicinity. And your credit can be lower, but you will be charged additional fees or points, or your interest rate will be slightly higher.

    I’m pretty sure that even though you don’t own any other real estate that you can’t call this your primary home because you aren’t actually living there. If it was in the general area of your workplace, you may be able to get around it, but since it’s located in a totally different state, I’m not sure that would count.

    I would suggest calling a loan officer in the area you are looking to buy. Ask them all your questions, they won’t charge you anything until you get into the application process. Just let them know you are looking for information and you don’t want to start the actual process until you know what you’re getting into.

  2. Reply
    Janet P
    January 27, 2011 at 5:39 pm

    You will not qualify, after you pay your rent, taxes and debt there is nothing left for a vacation property.

    That is some cheap rent for NYC you have, congrats on that one.

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