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Valued Member
Posts: 47
Registered: ‎01-05-2013
0

How much of a house should I buy.....?

[ Edited ]

Me and My wife bring in about 6K after taxes, 401K per month....We have 0 debt. Our month expenses currently is about 2K with the rent. I have about 60K in cash and about 16K immegency fund.....how much of house could I afford? and should I buy?

 

We are really interested in house and it 379K I am trying to negotiate to get it for a 370K. House is new and nothing to do. I have about 15K less for 20% down payment and wondering if I should role the closing costs to the mortgage. Which would make my mortgage about 379K. Is this affordable? Should I wait further.......

 

Loan rate I have got so far is 3.5%

 

 

Appreciate the help.

 

thanks.

New Contributor
Posts: 167
Registered: ‎12-04-2012
0

Re: How much of a house should I buy.....?

 With rates the way they are, you can figure on about 4x your combined gross yearly income as an approval figure.  Your numbers threw me off a little, but if you meant you two are bringing in 6k per month after taxes then you should be fine especially with the downpayment you have saved up. 

 

You sound like you're in great shape considering your emergency fund.  Rolling closing costs into the loan is completely up to you, but I would avoid it if you can comfortably do so.  Why pay interest on it for years when you can cough it up upon move in?  Chances are any furniture or appliances you finance will be on no intro APR plans anyway, so it's tough to justify rolling closing costs into a loan to be able to afford that sort of thing.

 

Just my 0.02 at the end there.  Good luck!

Valued Member
Posts: 47
Registered: ‎01-05-2013
0

Re: How much of a house should I buy.....?

[ Edited ]

yeah you got it correct it was 6K. Corrected the OP.  379K houses 20% down is about 74K+11K of closing cost is about 85K. If put everything I got minus the emergency fund. It would be around 70K. That is 15K short. This where I run into an issue. I do not want to use my emergency fund for this....I feel my emergency fund is way less as I want 8 months emergncy....with the taxes and new mortgage our monthly expenses are going to move upto 3.5K which is a jump of 1.5K so I am very short on my emergency fund now itself.....

 

 

I am in majoy issue. Appreciate the help.

 

Thanks.

Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
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Re: How much of a house should I buy.....?

Do you have to put so much down? You make $6K net income per month, so if you put down about $32K, your payment will be about $2300 with PITI plus PMI. If you put $38K down, your payment will be about $2000 minus the PITI as your down is 10%.
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New Contributor
Posts: 157
Registered: ‎01-09-2013
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Re: How much of a house should I buy.....?

I thought you pay PMI for anything less than 20% down? (I assume you meant PMI in lieu of PITI)

Lender Pull EQ 745 EX 734 TU 722
Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
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Re: How much of a house should I buy.....?

Isn't that just conventional? I guess I was thinking FHA.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
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Re: How much of a house should I buy.....?

Whoops, I made a mistake. I meant to say if you put 10% down on FHA, your payment will be $2000...about minus $300 for PMI not PITI. Everybody has to pay PITI! LOL!
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
New Contributor
Posts: 157
Registered: ‎01-09-2013
0

Re: How much of a house should I buy.....?

I thought PMI was required accross the board with a LTV less than 80%..

Lender Pull EQ 745 EX 734 TU 722
Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
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Re: How much of a house should I buy.....?

I have heard discussions on this forum of folks putting 10% down to avoid PMI. I don't know how accurate it was but I will check the FHA.gov website again.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
Valued Member
Posts: 57
Registered: ‎01-19-2013
0

Re: How much of a house should I buy.....?

I did find a loan program that let me out of pmi for 10% down but my loan is not fha. Its part of my credit unions portfolio. There is probably a program available in your area that could give you a similar option.
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Goals: TBD, possibly a mortgage refi to a fixed rate or better adjustable
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