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New Member
knowlejboy
Posts: 14
Registered: ‎08-04-2007
0

Home purchase realistic? Please help!

I would like to purchase a home in July or August--here's my situation:
 
Experian: 688
Trans Union: 706
Equifax: 716
 
Current income: $85k/year
Income beginning Aug '08 (can verify with letter from employer) $145k+
 
Monthly payments on debt (student loans, car payment, credit cards): $2200. I have a lot of credit card debt (about $30k) from law school. Working to reduce it but of course that takes time.
 
Employment history: 5 years in field (including law school). Worked one year for law firm, now working for a judge for one year, will return to same firm in Aug '08.
 
Would like to buy a house between $270-300k, with mortgage pmt not more than $2100. Can this be done?
 
Thanks for the help!
Super Contributor
ShanetheMortgageMan
Posts: 8,252
Registered: ‎09-28-2007
0

Re: Home purchase realistic? Please help!

As soon as you are at the $145k income level you should be able to purchase a home in the price range you are considering, with likely a payment on $270k at around $2,100 as well.
 
Few questions though.
 
#1, is the new employment/income in 8/08 going to be salary?  If so, you only need to be working at the new salary for a day in order for it to qualify, but since it's a new employer, lenders will likely want you to get at least 1 paycheck showing that amount.
#2, where are you planning on purchasing?  This will determine what you should expect in terms of homeowners insurance, property taxes, and possibly required down payment.
#3, do you have a down payment, or any reserves/assets (such as savings, checking, 401k, IRA, stocks, etc.)?
#4, will any of the $2,200/mo in debt have 10 payments or less by the time you are ready to apply?
 
#2, & #3 would have some bearing on what your monthly payment would be.
New Member
knowlejboy
Posts: 14
Registered: ‎08-04-2007
0

Re: Home purchase realistic? Please help!

Thanks for the response. Here are the anwers:
 
#1--yes, the $145k will be salary. Probably $5-10k in bonus too, but not able to document that. It won't be a completely "new" employer since I worked for them before and we planned all along that I would be gone for a year, but I'd like to close before I actually get a paycheck from them, if possible (would be nice to be moved before I start working)
 
#2 -- home would be in Charlotte, Mecklenburg Cty, NC.
 
#3 -- trying hard to have $10-15k available for all costs required to move in (down payment, if any, closing costs, escrows, lender fees, etc.) Wish it were more but I've been trying to pay down other debt and have to kids to take care of!
 
#4 -- unfortunately, no debt with less than 10 payments remaining.
 
Thanks!
Super Contributor
ShanetheMortgageMan
Posts: 8,252
Registered: ‎09-28-2007
0

Re: Home purchase realistic? Please help!

95.01%-100% financing is available now in Mecklenburg City/Charlotte area, but if values start to decline you might see lenders requiring 5% down in order to obtain conventional financing.  Taxes/insurance are relatively cheap in that area vs. other parts of the country, so those will keep your payments within your range... would be around $2,200/mo for a $300k home/5% down, or $2,000/mo for a $270k home/5% down.  For the best rates you will also want to have at least 2 times the PITI payment in reserves after your down payment/closing costs as well... so doing 100% financing would obviously make that possible.  Also, values have started to stablize in that area, homes aren't selling as quickly.. so finding a seller willing to pay your closing costs should be possible.  Keep your FICO's above 680 and you should have options for you. 
 
As far as moving in before getting a paycheck, you could find a home for sale that is vacant, and then within your offer you could have a contingency that move in before closing, pay 1 month of rent and get renter's insurance, then close on the sale... that way it's a less stressful closing.  Not many lenders (or any that I'm aware of) will let you use employment/income to qualify unless you've officially started working there.  If they verify you are working there before you close on the home, it should work out... not sure if they are able to do that though.
New Member
knowlejboy
Posts: 14
Registered: ‎08-04-2007
0

Re: Home purchase realistic? Please help!

Thanks! So from what you're saying, I can't qualify for what I want based on my current salary or a letter from my employer, but would need to find some way to actually begin working before closing to make this happen--correct?
 
Super Contributor
ShanetheMortgageMan
Posts: 8,252
Registered: ‎09-28-2007
0

Re: Home purchase realistic? Please help!

It's borderline you could qualify on your current income.. your debt ratio sits around 64.5%, which is within the 64.99% threshold, but these days you'll need strong compensating factors (like 4-6 months PITI in reserves, 5% down payment, 720'ish scores) to get a debt ratio that high to qualify.  But yes, you would need to begin working at the new place before you could safely qualify with no compensating factors needed.

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