Qualify for mortgage? First-time, no negative accounts, lower income

[mistapizza]

Two-income loan hopefully. (brother and I, really good relationship, still in twenties) this SUMMER.

Credit: I have FICO over 800 (March). Brother credit scores in the 700s

Income: I make 41k gross yearly. Brother makes 35k yearly.

Source of income: I have one full-time salaried job. One tipped job on the weekends (6k/yr). Brother has one full-time hourly paid job (gets overtime).

Monthly debt payments: Only debt we have is revolving credit card debts. These are usually under $200/month

Employment: I have been at my current job for only a month, previously worked for a year at another company, previously graduated with a bachelor's degree. My brother has been at his company for about 2 years (got technical certificates beforehand).

Assets: Our 401k/IRAs are probably about 10k total in value. I have 10k in savings at this very moment. My brother has something like 30k at this moment in savings.

Location: Orange County, CA

Transaction: Purchase single family home for primary residence this summer.

We are looking to buy a home this summer, when we will have saved up significantly more money. I don't expect we will have a full 20%, but over 10% definitely of a 450,000 home. Any help would be welcome. We both are very young and will be making more money in the upcoming years, but dont expect to get raises for a while. We are very frugal and want to have a home as an investment and to live instead of paying rent with the rest of our family (we all still live together and work local).

[Anonymous]

A house is doable, but I don't know about a 450k mortgage.  A combined 76k annual income can't support that size note, but what it can do is buy a 250k house, but I know that doesn't buy much in Orange County.

Y'all are playing in the big leagues, using the quicken calc I ran the numbers.

450,000 purchase price

50,000 down (11%)

3.75 APR

30 year term

Annual taxes ( I didn't know so used 10k, but my guess it would be substanially more)

Homeowners insurance 900?

PMI calculated at 147 a month= total payment 2,903 a month give our take a few.

What y'all want, just not doable on 76k a year, but don't let that discourage ya.  I know most in your generation not patient, but you have to be in this case. Look at homes half of 450k, build a equity in one, work, take your credit serious, work, have goals, always look for ways to better yourself, work, maybe oneday you find a life partner shares your goals, so y'all work together, and when you do all that, you'll be ready for to move to the next level.  And it won't take as long as you think.

Good luck and keep us posted.

[frugalQ]

i agree with BamaGuy.

We just purchased our home and it was 450k....and our combined income is twice the OP's income.  and we have to keep our bills low!

[Anonymous]

Based on what you have told us, you shouldn't have a problem qualifying for a mortgage - just not one of that size. You will be really pushing your ceiling at about $300-$325k. Also, your income for qualifying purposes will be averaged over the past two years. It sounds like your brother's income is consistent over that time period, but you may qualify for less house if you made substantially less in your prior job last year. If you are willing to lower your expectations a bit, you can surely become homeowners in the near future. Prices are shooting up like crazy in our state right now, so it might be a good idea for you to buy at $250-300k, build some nice equity, and flip that into a new home a couple years down the road. Best of luck, and let me know if you have any more questions (I'm licensed in your state)!

[Lemmus]

...the median propety tax on a 450k home in oc ca appears to run about 3k ...its prop 13 territory

...but other than that, bama and frugal have it right ...you'll need a lot more income or a heck of a lot more down payment to afford a 450k home

...you're young yet ...have you thought about relocating to somewhere else in the country where 70k income will buy a lot better life? ...just a thought, eh

[mistapizza]

Is it possible to apply and see how much I get? I would like to keep options open to lower prices property, lower prices cities that maybe 350k for a poor starter home in Orange county are out there. I also may look into buying a condominium instead. If a 250k to 300k loan is out there for me I would go condo/poor starter home hunting just to see.

[StartingOver10]

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@mistapizza wrote:
Is it possible to apply and see how much I get? I would like to keep options open to lower prices property, lower prices cities that maybe 350k for a poor starter home in Orange county are out there. I also may look into buying a condominium instead. If a 250k to 300k loan is out there for me I would go condo/poor starter home hunting just to see.

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A good LO tells you what you qualify for payment wise and does the calculations to arrive at a purchase price by using average taxes, insurance. HOA or condo fees. etc.

You can then find a property that fits your needs within your price point.

Don't max out your mortgage cabability if at all possible.  You can look at two nearly identical properties and they may actually have different payment amounts due to the differences in real estate taxes and maintenance fees, where applicable.

[mistapizza]

Which Loan officers do you recommend I seek? I previously applied online through my personal bank and eventually reached a person that said I didn't qualify for any loan (about 7 months ago).