Is a mortgage even possible????

[artisticjen]

Here's my situation. I rent. I have never missed rent or been late in 10+ years, $620 a month, I get no type of help with rent. I'm disabled, on diability. I get $850 a month. My current credit score is 668. I could probably get together a $2-3k down payment. Could I even get a mortgage? Do I have any options? I'd like to buy a little condo, I feel like I've wasted all this money on rent all these years. I want to get something that will be mine, and not just renting for the next 30+ years.

Any suggestions would be helpful. I'd like to try next year. That way I have more time to work on my credit and saving money. Jen

[Dapper_Dan]

If I get this right, you're asking if you qualify for a mortgage and you have no source of income other than disability?  Do you know how much it costs to own a home?  At your current rent payment, any mortgage calculator will estimate that you could afford probably a $50k mortgage.  But then you need to consider property tax, insurance, utilities, repairs (water heater, roof, etc) which are monthly repairs on top of the mortgage payment.

Then you need to look at what your existing debt payments are, such as a car loan, credit card, etc and figure out how you're going keep all of that to less than what the lender will consider your debt-to-income ratio.

To be brutally honest, you're better off renting.  The term"house poor" exists for those who cannot afford the house they are stuck holding.  And if the value drops on the home, you lose equity... meaning your going to sell at a loss if you ever want to move.  And if you do end up wanting to move, you'll have to wait for values to go up so that you have enough to pay for the tax, broker fee, and escrow.

Your money for a $2k down payment will be eaten up by escrow costs and you'll never see that money again.

You might be best off with the cheap rent you have.  Then again, everything is relative.

[artisticjen]

No problem with brutal honesty. I don't own a car, I can't physically drive, so no car loan. I have $50 a month in credit card payments. I also pay $100 a month for utilities. I was thinking about it because my sister put $5k down on a $78k house and has a mortgage payment of $520. So she's paying less than me for a home. I want to purchase a condo so $50-75k would be in the right ballpark. Things are tight but the bills are always paid. I just was wondering if a lender would consider it. Jen

[HouseBuyerGuy]

At 43% DTI the max your mortgage payment could be with 850 income is $315. That would have to include insurance, pmi, hoa fees (most condos), and taxes. A $520 payment on 850 income  plus 50 credit payment puts you close to 70% debt-to-income...

You are probably better off renting. If something breaks (fridge, stove, etc) and you have very little money, you are better off with a landlord being responsible...