Another Can I Qualify Question for Shane

[Anonymous]

If I understand you correctly on one of your posts as long as my DTI is less than 45% I should be able to get a mortgage up to that amount? so quickly my stats:

Income $47,500 (but expect to be at $52,500 when I try to buy this fall)

$419.85 Monthly Car Payment (will have 25% paid off with 62 installments left $19K owed of a $25K loan amount at time of purchase)

No Other Debt Payments

$10,000 Down Payment  (with $4k extra in savings)

Credit scores 751, 762 and 771

1)      Could I qualify for $175,000 House at Income #1 or do I need to wait for my raise and would I qualify after that?  Looking to buy in 7-9 months

Do I have a reason to get excited?  Housing prices have dropped dramatically here in Las Vegas and I am confident I can find a great house for $180K or even less.

[ShanetheMortgageMan]

I think Las Vegas house prices will drop even further by the time you are ready to buy... Even with the current income you make, you should be fine to buy a $180k home with a $10k down payment.  Las Vegas is in a declining market, so if you choose conforming financing you are going to have to put 5% down, but if you choose FHA you can just put 3% down.  You are looking good.

[Anonymous]

Don't fall in to the "what do I QUALIFY for" trap.  That's how a lot of people got into trouble.  Just because a lender qualifies you doesn't mean necessarily that you should spend that much.

What payment do you think YOU can make?  That's the question.  Qualify, yeah, you'd be OK with a strong FICO score like that.  Comfortable?  You decide.  On $175000, depending on taxes and insurance, at 95% LTV you're looking at a payment PITI between $1350 and $1450 including the mortgage insurance.

[Anonymous]

Thank you Shane and Joe!

I found the house I want to buy and am hoping it is still on the market in 6 months (which from what I have been seeing our here seems likely).  Currently they are asking $168,000 and its been on the market for 3 months now.

Comfortably I want a payment no higher than $1,350 so now I know my price point.

Thanks again!

[ShanetheMortgageMan]

If you go with FHA you could expect your payment to be about $1,240/mo for the $168k sales price.  ($977 for principal interest, $55 for insurance, $140 for taxes, and $68 for mortgage insurance).  You will see PLENTY of homes that you like in Las Vegas, you might like this one for awhile, but I bet you in 30-60 days you'll find one you'd like better.  My FIL was purchasing a home through US Home Auctions (horrible experience) in Las Vegas and he and his wife found a home they loved, went into escrow on it, and then towards the end saw about 5 more homes they loved more that had even lower sales prices.  They didn't end up buying the home they won at auction so it was kind of a blessing in disguise.