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Hope for me buying in Los Angeles on 80K income?

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Hope for me buying in Los Angeles on 80K income?

I live and work in Los Angeles. I rent a cute bungalow in a decent neighborhood with my commute to work only about 20 minutes in 7-8 AM rush hour traffic. I have lived here almost 4 years and I could probably continue as my rent has not increased and my landlord lives across the street. I want to take a chance and try to buy my own cute bungalow, but my income is too low for the area I live in. At work, I hear the stories of others who have tried to buy and they are priced out of the market or who have lost several offers and are just discouraged and depressed after the experience.

 

In 2009, I filed Ch. 7 in Florida, and it was also discharged in 2009. I lost two houses to foreclosure after my ex-husband got laid off for almost 2 years resulting in a large loss of income in the household. The foreclosures were completed in August 2010 and January 2011.  I moved to Los Angeles in 2010 for a more secure job, and I have steadily been promoted and my income is increasing.

 

My annual income is $54K in W-2 wages and abt. $27K in court ordered child support. My current bills are rent of $1500, a car lease of $299 including taxes and a student loan of $78 monthly. No credit card debt, but I do use my credit cards sometimes and pay the balance off regularly. The last time I checked my credit score it was at 700 (prior to leasing my car in Feb 2013).

 

Checking the HOW MUCH HOUSE CAN YOU BUY calculators, it shows with 5% down, I can afford a $295K house, which is a lot, but in Los Angeles, it is not! I could possibly stretch it to 10% down but that would be by taking a loan from my 401K, scary! 

 

Should I even bother trying to buy in an area where people are paying $100K over asking and  FHA offers are laughed at (and refused) since I am competing with all cash buyers and investor flippers?

 

Will mortgage lenders even give me a chance again? Over 20 years, I have bought and sold over 13 homes/rental properties and have many successful old tradelines for mortgages that show paid on my credit record, but the recent foreclosures made me feel like a failure cause I could not save them and Indymac refused to work with me on any modifications, so I walked.

 

If I am crazy enough to try, are there any workshops or specific lender programs out there to help me get back into my own home in Los Angeles and not Palmdale?

 

Thanks!

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Message 1 of 5
4 REPLIES 4
BrokeStudent2010
Contributor

Re: Hope for me buying in Los Angeles on 80K income?

Honestly the only way you can probably answer these questions is by starting the process. Don't rely on online calculators. Go to a few banks and seek preapproval. That way you'll know what a bank might really be willing to loan you. And then start looking, whether that is online on your own or with an agent. Since you are relatively new to LA, you might find that an agent will help you find properties that you don't know about that are in your price range. That is what happens me when I started looking for a place to buy in Washington DC. The average price of a home here is over $400,000. But I was able to find something that is in my price range that I love and which was under $250,000.
Message 2 of 5
DallasLoanGuy
Super Contributor

Re: Hope for me buying in Los Angeles on 80K income?

fha might take you.

conv is out with those foreclosures.

 

Retired Lender
Message 3 of 5
tooleman694
Valued Contributor

Re: Hope for me buying in Los Angeles on 80K income?

I was born and raised in California. One piece of advice I would give you, do not own property in California. You are better off renting.

Message 4 of 5
Kennie02
Frequent Contributor

Re: Hope for me buying in Los Angeles on 80K income?

I was born and raised in LA and I can tell you that it's going to depend on where you want to live. Since moving away at 18 (12yrs ago) there are only a few friends and family I know that have purchased a home. My guess is that you live in a Hancock Park type of neighborhood. My in laws, parents own homes in not as nice neighborhoods. My sister owns a home in the valley. I have friends that have just purchased a home within the last year in the Alhambra area. They are in similar incomes as you... I think it's going to be a tough battle between you and those investors (who usually seem to have cash!) and also your choice of location. But it is possible. Like BrokeStudent2010 said you won't know for sure until you start the process.
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