I only make $36,000 how much house can i Afford?
December 24, 2008 · Print This Article
zonkietheterrible asked:
I don’t make much and i live in Miami,Fl where houses are ridiculously overpriced! I found pre-construction downtown from the 160’s to 250’s. i would love to own but is this unrealistic and dangerous? i have excellent credit.
Well I have always lived in Miami, and am currently living with my family. So I don’t pay rent, and my monthly expenses are basically my car and cell phone. and about $1000 in Credit card debt. Thats about it.
how does pre-construction work though? do you immediately start paying a mortgage or is it just the construction and contract deposit at first to reserve?
$140,000 doesn’t exist in miami unless you live in a hole. thats the problem.
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I don’t make much and i live in Miami,Fl where houses are ridiculously overpriced! I found pre-construction downtown from the 160’s to 250’s. i would love to own but is this unrealistic and dangerous? i have excellent credit.
Well I have always lived in Miami, and am currently living with my family. So I don’t pay rent, and my monthly expenses are basically my car and cell phone. and about $1000 in Credit card debt. Thats about it.
how does pre-construction work though? do you immediately start paying a mortgage or is it just the construction and contract deposit at first to reserve?
$140,000 doesn’t exist in miami unless you live in a hole. thats the problem.
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Josh Dunaway has been a certfied Realtor in the suburban Chicagoland area for over 20 years. Aside from starting his own real estate company, he also owns a mortgage company as well.
I wouldn’t over extend myself on So. Fl. real estate but if you were going to try and do it, I’d buy with the intentiones of perhaps renting a room to someone or getting in touch with one of those services that places professionals temporarily in housing until their time here in Miami is done.
What is your existing monthly debt? Without additional information, nobody will be able to answer your question. Do a search for “Mortgage Calculators” and find the one that calculates how much you can afford.
Best of luck.
Banks work of what is called a Gross Debt Service Ratio. Depending on the bank, it’s usually 30-40%. Meaning, they will allow you to borrow an amout that has payments up to 40% of your gross income.
Using 40% and a 36K salary, that would be 1,200 a month. This 1,200 would have to cover all your other debt (if you have any), propery taxes and mortgage payments.
Let’s assume you have no other debt. $160,000 mortgage will cost you about 1,000 a month. That leaves you $200.00 for property taxes. Note: some banks include utilities in this figure.
Realistically I would aim for about a 140,000 mortgage. If you have a 20,000 down payment that puts the lower end property you mentioned in your range. You could always borrow a little more by amortizing the loan over more than 25 years. 25 years is fairly standard though.
Good luck.
You can’t afford one. Sorry. I would try to get a second job. Not everyones garrenteed a house.
If you can only afford a 5% or 10% down payment, it could very challenging. Would it be possible to rent out one of the rooms for a few years? Do you have a 401k that you can borrow from? It also depends a lot on taxes and fees. Try to figure out how the first two years would work. If you get that far without too much trouble, it should be good.