Is my husband crazy or am I?

[bruiseviolet]

My husband and I are about to be first time home buyers (FINALLY!)  After bills and necesseties for our children (diapers etc..) with his income we still have 1200 a month that has "nowhere to go" (for lack of better term).  I am growing frustrated, because my husband is 99.9% convinced that we cannot afford more than a $500 a month mortgage payment.  We have 3 children, and I have a home based business, so 3 bedrooms and an office space or 4 bedrooms is a must.  So far it's looking more like with taxes etc, we are looking more along the lines of $600-$750 a month for a mortgage around $100,000 here.  I think we can afford more, we aren't counting my income on the loan (i have really really bad credit from a long time ago that i'm working on fixing still) but his is fine.  So the 1200 a month left, is just based off of his income- it doesn't include the income I earn from my business.  (granted, it varies, but it's always at least a few hundred extra).  

to pay no more than $500 a month that leaves us with getting a 1% interest rate (LOL) or else purchasing a mobile home (totally against that) for $40,000 or so.

Can anyone offer any advice?  I am in the wrong to think we can afford that much each month or is he way under-estimating?

[Anonymous]

You should look into USDA direct or guarantee programs...for low income families &up to 102 % financing and up to 38 yr loan term. The direct program also could subsidize your rate down to 1% . Really good government programs that make homeownership possible   Look up the USDA thread.

[Anonymous]

btw with those programs, ive seen people on here that have bought say a $150,000 home and theyre payments are around $700. Go to the USDA website and look at the income guidelines and area eligibility (meaning what area of your state is eligible for the program) ionly certain areas (townc) are eligible and you have to qualify with income and credit requirments. If you need more info you can message me or contact your USDA local office by phone or email.

[bruiseviolet]

Thanks- we are checking into a USDA loan.  Have an appointment with a mortgage lender tomorrow.  We've already been pre-approved by a local credit union for 100,000 FHA with 5.2% interest.  Hoping we can get a little more with a USDA- the 100,000 mark is an in between mark- and going up 10-20k more puts us into a ballpark for a new 4 bedroom home-  vs. the ones available under the 100,000 mark which are very small, very old homes in downtown or mobile homes.  The areas we are looking in are a qualified area for the USDA, we've already checked into that.  Thanks!

[mauve]

http://www.mortgagecalculator.org/
http://www.bankrate.com/calculators/mortgages/mortgage-loan.aspx
http://cgi.money.cnn.com/tools/houseafford/houseafford.html

The last calculator will give you an idea of what would be considered conservative vs. aggressive. 

[bruiseviolet]

Thank you so much for the links.  The last one, is not one I had run across yet.  Apparently my husband is more in check with reality and the last calculator seems to speak what he is preaching.  =)  I just think that with my income (because we aren't counting it in the mortgage because i cant be on the loan) we can lean more towards the aggressive side and be comfy.  If we didn't have my income- I wouldn't lean on the aggressive side.  Anyways, thank you so much.  

[mauve]

I really like that calculator, too.  If you have less than 20% down, though, it's not going to tell you about PMI.  Property taxes and homeowner's insurance are items you may have to take a reasonable guess at, too.