Does it make sense for me to get a mortgage?

[AK_gal]

Hi,

I'm in a situation where I need to find new housing. Average rents are 1,000/month for a one bedroom. So I am wondering if it makes sense for me to me to purchase a home instead. I own a home in another state, which is rented, and I have a balance of $57,000 on the mortgage. The home value is anywhere from 150,000 - 180,000. For various reasons I do not want to sell right now. My monthly mortgage payment is $451.

1. Credit.  My FICO is 776
2. Income.  My income is $52,400
3. Source of income.  My income is salary and rental income, majority being salary.
4. Monthly debt payments.  I have no debt other than the mortgage.
5. Employment  My employment history is where I may have a problem. I go from employed to self-employed on a regular basis (contracting, with various terms for employment). I currently have a "regular" employment job (receive a W2), and have been in the position only 2 months. Previously I was self-employed for 1 year, and prior to that had employment for 1.5 years receiving a W2.
6. Assets/Reserves.  $20,000
7. Location.  Anchorage, AK
8. Property.  SIngle family
9. Value.  $150,000
10. Occupancy.  Primary residence
11. Transaction Type.  Purchase

I would like to have a lower down payment (ideally 5%). Is this sensible to pursue/available/feasible? 

I appreciate your thought and suggestions!

[HouseBuyerGuy]

Do you report your rental income on your tax returns? They will likely need 2 years worth showing on your tax returns to count it. If you don't, the income will not count as income and the debt will still count against your DTI. If it does show up on your taxes the rental income will offset the mortgage. If you are negative that balance is added to your debt, if over the rest is added as income and there is no mortgage DTI.

Is your work all in the same field? They would likely use your current salary if so.

With no debt and the mortgage being offset, I don;t see why there would be a problem.