Nervous and needing reassurance or advice

[Anonymous]

Hey everyone,

My parents just left. We looked at houses over the weekend and I found one I kinda like. The homes are all in the 140K-150K range. I keep stressing and doubting myself on if I can afford them or not though.

I have no debt other than paying the IRS (I'm self employed,) and some CC bills but since they're reward cards, I put my utilities on them and pay them off monthly. They have small (few hundred dollar) balances. I currently have balances on 3 plus my care credit. By the time I close, I plan to pay 1 off if not 2 and have the Care Credit paid way down. The minimums (and again I pay more, but still,) are around $100 a month. As soon as I move, I'm planning to work out something with the IRS so I can get rid of the back I owe and just work on saving for my quarterly so I end up not owing them anything.

My rent is currently 1137 a month and of course I don't get to deduct any mortgage interest or anything else.

I've been making between 3-4k a month depending on how much I work and how busy it is. Taking the mid 3500, and taking 31% of that is 1090. If I go as high as 150K and get the closing costs wrapped into the loan, my payment would be just a bit over 1000. I know I need extra $$ in reserve for emergencies. I currently have 5K to put down but am planning to go between 7-9K by July when I plan to close.

My parents don't know that I'm self employed. I'm a tarot reader and they wouldn't understand, so they don't know I can take certain deductions off as business expenses and I can't tell them that. That will help me a little also, plus they think my rent is almost $300 a month lower than it is. They were telling me I need to downsize the amount I want.

My rational was that I should be able to get a house I want that I can stay in for a long time. I've always wanted a pool too and I'd prefer having my own. Do you think 31% or so of my income is realistic as long as I have a few months reserves in the bank? I got my GFE for the 150K purchase and am second guessing myself, but I think it's just out of fear and not knowing what's going to happen. Any input would be great!

[Anonymous]

I'm pretty new to this so take what i say with a grain of salt

Our GFE for $135,000 gave us estimated mortgage costs of $1176 a month. Our terms and insurance and such might not be as good as yours so maybe that explains the difference but $1000 a month seems low for $150,000 loan. I just wanted to make sure you're remembering to add the cost of taxes, insurance, etc. into the monthly figure

You seem very conscientous so i'm sure you'll do great managing your first home! Congrats

[Anonymous]

My rate is 5% as of now and I think I forgot to mention I'll have between 5-8K down, so I'm really only borrowing $142K. Thanks! I hope I'll be fine too but I'm just really nervous.

Karen

[WannaHouse]

What you qualify for and what you can afford are two dofferent things. If you feel it's too high, it just might be. We are looking in our "comfort zone", which is about 25K less than we were approved for. You need to figure out what you are comfortable paying and look in that range.

Good Luck