Need Advice on My Co-Op and Want To Buy a House

[Ms-Kato]

I own a Co-Op ( Live In ) worth about $225.000...

I'm looking at houses in the $400.000 - $500.000 range but more towards $500.000 because

you can't get much here in NYC for that amount so I'm looking in Staten Island NY.

I plan on putting down $200.000 and get a mortgage for $300.000 . I make $80.000 a year and have zero debt

except one Kohl's CC with zero balance. 2 collections totaling under $1000 that will be taken care of .

I was also thinking of taking money from my 401K  ($100.000)  which would bring down

my monthly mortgage payments down even more but don't think that is a wise choice..yes /no ?

So I will be putting down 40% ($200.000)...How much do I actually qualify for ?

One thing I noticed is regardless how much I put down the rates stay the same for my credit rating scores..I thought

the more you put down the rate would fall...oh well so much for that thought.

Do i Qualify for any special programs here in NYC for first time home buyer  ?

Thanks so much

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All Scores Recieved Within 1 week in OCT, 2011


Transunion FICO = 673
Transunion FAKO= 627 Got This From Equifax Complete Advantage Plan
Transunion FAKO= 714 Grade C .Got This From AnnualCreditReport.Transunion

Equifax FICO = 684
Equifax FAKO= 663 Got This From Equifax Complete Advantage Plan

Experian PLUS= 608 Got This From Experian's WebSite.
Experian FAKO= 711 Got This From Equifax Complete Advantage Plan

[cdtotten]

Depending on the type of financing route you take (FHA, USDA, VA, conventional), then your credit score will have different affects on the rate. For the first 3, your credit score won't affect the rate at all. As long as you qualify, it doesn't matter if you have a 640 or a 800. For conventional, you will get the best rate available with a prime score, and go down from there.

I will let someone else run the numbers on what you would qualify for, but I will give my advice regarding a 401(k) loan. IMO, do not do it. In almost all situations, it is a horrible idea. Reasons being: 1) you are losing out on all that potential income from your investments, plus the compounding of those earnings over time. 2) The loan will be repaid with after-tax dollars, and you will be taxed again when you withdraw funds down the road (thus paying taxes twice on some of the money) 3) You will likely pay a loan origination fee and 4) If you happen to lose your job or the plan is terminated for any reason, then your loan will be due in full usually within 3-6 months or will be a deemed distribution, subject to penalties and income tax.

Now, not everyone may agree regarding the 401(k) loan, but especially if you are younger (under 35), I would leave the money alone. If you are 50 and looking to purchase, no big deal... your investments probably won't grow that much. But if you are 25-30, and these funds can grow untouched for 30-40 years, then leave them alone.

[Ms-Kato]

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cdtotten wrote:

Depending on the type of financing route you take (FHA, USDA, VA, conventional), then your credit score will have different affects on the rate. For the first 3, your credit score won't affect the rate at all. As long as you qualify, it doesn't matter if you have a 640 or a 800. For conventional, you will get the best rate available with a prime score, and go down from there.

I will let someone else run the numbers on what you would qualify for, but I will give my advice regarding a 401(k) loan. IMO, do not do it. In almost all situations, it is a horrible idea. Reasons being: 1) you are losing out on all that potential income from your investments, plus the compounding of those earnings over time. 2) The loan will be repaid with after-tax dollars, and you will be taxed again when you withdraw funds down the road (thus paying taxes twice on some of the money) 3) You will likely pay a loan origination fee and 4) If you happen to lose your job or the plan is terminated for any reason, then your loan will be due in full usually within 3-6 months or will be a deemed distribution, subject to penalties and income tax.

Now, not everyone may agree regarding the 401(k) loan, but especially if you are younger (under 35), I would leave the money alone. If you are 50 and looking to purchase, no big deal... your investments probably won't grow that much. But if you are 25-30, and these funds can grow untouched for 30-40 years, then leave them alone.

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 Thanks for taking the time to reply cdtotten..appreciate it ! 

I didn't know that about   (FHA, USDA, VA) Loans. I also think the FHA applies for the NY area up to $550.000....I have

to look into this if the rates are at least close to a conventional prime.