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Go for it or wait another year?

CivalV
Established Contributor

Go for it or wait another year?

So I am in the middle of a stressful situation. My lease is up March 15th 2021. The rent is nearly $3K monthly not incuding other expenses *Light,Gas, CC payments, Car payment, Car Insurance*. Me and my partner split the rent $1445 per. I would like to purchase a home instead of paying rent for another year but I am not feeling confident in doing solely based on my income. My scores are for the lack of a better term much higher than my partners *640-650* range due to high credit usage from not working for a little over a month back in October. My mortgage middle score is currently 636 which I believe is fairly low. My income alone is $4K which is not much. I am looking for a 3BD 1-2Bath home in NJ. Most of the homes range from $280k-$600k depending on SQ FT and the county. I work in NJ but my current lease is in NY.. Houses and apartments here in NYC for a 1-2BD apt, 1 bath cost $2K monthly for less than 800 SQ FT, no parking etc. 

 

 

Two big issues I am having is my income vs the house I need as I have 3 children and my low Mortgage score due to high utility *80%.. yes I know horrid* ..What would you recommend? If I used the AZEO method paying down all of my low limit cards would my mortgage score increase, while also decreasing overall utility? Do I have a chance at qualifying for a loan on my own or should I suck it up and rent for another year while getting my scores together and possibly picking up a part time/promotion?

 

Also I have not applied for any credit cards for almost a year. My last inquiries were from the purchase of my car back in June-July 2020 to gear up, for my travel when moving to a state that pretty much requires you have to have a vehicle. 

Sept 18: EQ: 578 TU: 583 EX: 576
Sept 19: EQ8: 640 TU8: 645 EX8:640 April 20': EQ8: ??? TU8: 680 EX8: 673
Goal by Sept 20’ EQ: 700 TU: 700 EX:700

AA:


Goal: Auto Lease 2020 Jeep MOAB
Goal: Chase Sapphire Preferred
Goals Achieved Nov 19’: First Chase CC, Marriott Bonvoy w/ lowest APR rate of 17% April 20': First Citi CC W/ 15% APR rate Total CL:$21,400
9 REPLIES 9
FICOlearner123
Regular Contributor

Re: Go for it or wait another year?

Speak with a loan officer to see if there are any loan programs that suit for your score and income and what rates you might get with current score vs a better score. Some other questions and points that would help you get better responses

Are you and your partner planning to share the mortgage payments?

Have you planned for the property taxes and HOA payments?

 

 

 


Goal Cards
Message 2 of 10
CivalV
Established Contributor

Re: Go for it or wait another year?


@FICOlearner123 wrote:

Speak with a loan officer to see if there are any loan programs that suit for your score and income and what rates you might get with current score vs a better score. Some other questions and points that would help you get better responses

Are you and your partner planning to share the mortgage payments?

Have you planned for the property taxes and HOA payments?

 

 

 


Thank you for the reply. Me and my partner will be sharing the mortgage payments but the application and deed will be in my name. We are unmarried. I have also planned for the property taxes. The counties I am most interested in have a yearly property tax upwards of $6-$11K depending on the price of the home and many houses I have looked at do not have HOA fees. 

 

My partner is a veteran and was told that depending his score he could purchase a home with 0% and a low APR rate as well as no PMI. I have considered a joint application for the VA loan but I am worried about the outcome. his scores are terribly low due to recent 5 recent late payments and a newly reported collection. Last I checked his scores about 2-3 weeks ago, his scores ranged in the mid 500s after the collection and lates reported. So the VA option is probably out of the window. 

Sept 18: EQ: 578 TU: 583 EX: 576
Sept 19: EQ8: 640 TU8: 645 EX8:640 April 20': EQ8: ??? TU8: 680 EX8: 673
Goal by Sept 20’ EQ: 700 TU: 700 EX:700

AA:


Goal: Auto Lease 2020 Jeep MOAB
Goal: Chase Sapphire Preferred
Goals Achieved Nov 19’: First Chase CC, Marriott Bonvoy w/ lowest APR rate of 17% April 20': First Citi CC W/ 15% APR rate Total CL:$21,400
Message 3 of 10
dragontears
Valued Contributor

Re: Go for it or wait another year?


@CivalV wrote:

So I am in the middle of a stressful situation. My lease is up March 15th 2021. The rent is nearly $3K monthly not incuding other expenses *Light,Gas, CC payments, Car payment, Car Insurance*. Me and my partner split the rent $1445 per. I would like to purchase a home instead of paying rent for another year but I am not feeling confident in doing solely based on my income. My scores are for the lack of a better term much higher than my partners *640-650* range due to high credit usage from not working for a little over a month back in October. My mortgage middle score is currently 636 which I believe is fairly low. My income alone is $4K which is not much. I am looking for a 3BD 1-2Bath home in NJ. Most of the homes range from $280k-$600k depending on SQ FT and the county. I work in NJ but my current lease is in NY.. Houses and apartments here in NYC for a 1-2BD apt, 1 bath cost $2K monthly for less than 800 SQ FT, no parking etc. 

 

 

Two big issues I am having is my income vs the house I need as I have 3 children and my low Mortgage score due to high utility *80%.. yes I know horrid* ..What would you recommend? If I used the AZEO method paying down all of my low limit cards would my mortgage score increase, while also decreasing overall utility? Do I have a chance at qualifying for a loan on my own or should I suck it up and rent for another year while getting my scores together and possibly picking up a part time/promotion?

 

Also I have not applied for any credit cards for almost a year. My last inquiries were from the purchase of my car back in June-July 2020 to gear up, for my travel when moving to a state that pretty much requires you have to have a vehicle. 


Couple of issues 

Being out of work for a month - this may or may not be a deal breaker depending on what kind of employment you have. 

Without knowing what other debts you have (cc, loans, etc) can't calculate DTI to see how much you could be qualified for except to say that the top end of the range you listed will never happen on your current income 

Scores hover around 800
Haven't been AZEO in over a year
Rome was not built in a day, neither is a good credit profile
Message 4 of 10
CivalV
Established Contributor

Re: Go for it or wait another year?


@dragontears wrote:

@CivalV wrote:

So I am in the middle of a stressful situation. My lease is up March 15th 2021. The rent is nearly $3K monthly not incuding other expenses *Light,Gas, CC payments, Car payment, Car Insurance*. Me and my partner split the rent $1445 per. I would like to purchase a home instead of paying rent for another year but I am not feeling confident in doing solely based on my income. My scores are for the lack of a better term much higher than my partners *640-650* range due to high credit usage from not working for a little over a month back in October. My mortgage middle score is currently 636 which I believe is fairly low. My income alone is $4K which is not much. I am looking for a 3BD 1-2Bath home in NJ. Most of the homes range from $280k-$600k depending on SQ FT and the county. I work in NJ but my current lease is in NY.. Houses and apartments here in NYC for a 1-2BD apt, 1 bath cost $2K monthly for less than 800 SQ FT, no parking etc. 

 

 

Two big issues I am having is my income vs the house I need as I have 3 children and my low Mortgage score due to high utility *80%.. yes I know horrid* ..What would you recommend? If I used the AZEO method paying down all of my low limit cards would my mortgage score increase, while also decreasing overall utility? Do I have a chance at qualifying for a loan on my own or should I suck it up and rent for another year while getting my scores together and possibly picking up a part time/promotion?

 

Also I have not applied for any credit cards for almost a year. My last inquiries were from the purchase of my car back in June-July 2020 to gear up, for my travel when moving to a state that pretty much requires you have to have a vehicle. 


Couple of issues 

Being out of work for a month - this may or may not be a deal breaker depending on what kind of employment you have. 

Without knowing what other debts you have (cc, loans, etc) can't calculate DTI to see how much you could be qualified for except to say that the top end of the range you listed will never happen on your current income 


I am currently employed by amazon. I started a new position within the company, though it was not a transfer. I worked for amazon from Sept 2019-Oct 2020 and then started working the new position with Amazon from the beginning of December-Current. My pay is higher with steady hours and the ability to work OT. 

 

How is DTI calculated? This could very well be the reason, I will have to wait another year to purchase my first home. 

Sept 18: EQ: 578 TU: 583 EX: 576
Sept 19: EQ8: 640 TU8: 645 EX8:640 April 20': EQ8: ??? TU8: 680 EX8: 673
Goal by Sept 20’ EQ: 700 TU: 700 EX:700

AA:


Goal: Auto Lease 2020 Jeep MOAB
Goal: Chase Sapphire Preferred
Goals Achieved Nov 19’: First Chase CC, Marriott Bonvoy w/ lowest APR rate of 17% April 20': First Citi CC W/ 15% APR rate Total CL:$21,400
Message 5 of 10
dragontears
Valued Contributor

Re: Go for it or wait another year?


@CivalV wrote:

@dragontears wrote:

@CivalV wrote:

So I am in the middle of a stressful situation. My lease is up March 15th 2021. The rent is nearly $3K monthly not incuding other expenses *Light,Gas, CC payments, Car payment, Car Insurance*. Me and my partner split the rent $1445 per. I would like to purchase a home instead of paying rent for another year but I am not feeling confident in doing solely based on my income. My scores are for the lack of a better term much higher than my partners *640-650* range due to high credit usage from not working for a little over a month back in October. My mortgage middle score is currently 636 which I believe is fairly low. My income alone is $4K which is not much. I am looking for a 3BD 1-2Bath home in NJ. Most of the homes range from $280k-$600k depending on SQ FT and the county. I work in NJ but my current lease is in NY.. Houses and apartments here in NYC for a 1-2BD apt, 1 bath cost $2K monthly for less than 800 SQ FT, no parking etc. 

 

 

Two big issues I am having is my income vs the house I need as I have 3 children and my low Mortgage score due to high utility *80%.. yes I know horrid* ..What would you recommend? If I used the AZEO method paying down all of my low limit cards would my mortgage score increase, while also decreasing overall utility? Do I have a chance at qualifying for a loan on my own or should I suck it up and rent for another year while getting my scores together and possibly picking up a part time/promotion?

 

Also I have not applied for any credit cards for almost a year. My last inquiries were from the purchase of my car back in June-July 2020 to gear up, for my travel when moving to a state that pretty much requires you have to have a vehicle. 


Couple of issues 

Being out of work for a month - this may or may not be a deal breaker depending on what kind of employment you have. 

Without knowing what other debts you have (cc, loans, etc) can't calculate DTI to see how much you could be qualified for except to say that the top end of the range you listed will never happen on your current income 


I am currently employed by amazon. I started a new position within the company, though it was not a transfer. I worked for amazon from Sept 2019-Oct 2020 and then started working the new position with Amazon from the beginning of December-Current. My pay is higher with steady hours and the ability to work OT. 

 

How is DTI calculated? This could very well be the reason, I will have to wait another year to purchase my first home. 


DTI is calculated by taking all of the minimum payments listed on your credit report (student loans are the exception if they are on forbearance/income based repayment, the actual amount that will be used in the calculation varies by loan type). Then add in the proposed new PITI payment. Divide that number by your gross monthly income to get your back end DTI. It sounds more complicated than it is. 

Alternatively, to calculate the maximum PITI you could be approved for: take your gross monthly income multiply it by the max DTI for the loan type then subtract all of your minimum payments, what is left is the max payment you can qualify for. 

 

Hope that helps 

Scores hover around 800
Haven't been AZEO in over a year
Rome was not built in a day, neither is a good credit profile
Message 6 of 10
CivalV
Established Contributor

Re: Go for it or wait another year?


@dragontears wrote:

@CivalV wrote:

@dragontears wrote:

@CivalV wrote:

So I am in the middle of a stressful situation. My lease is up March 15th 2021. The rent is nearly $3K monthly not incuding other expenses *Light,Gas, CC payments, Car payment, Car Insurance*. Me and my partner split the rent $1445 per. I would like to purchase a home instead of paying rent for another year but I am not feeling confident in doing solely based on my income. My scores are for the lack of a better term much higher than my partners *640-650* range due to high credit usage from not working for a little over a month back in October. My mortgage middle score is currently 636 which I believe is fairly low. My income alone is $4K which is not much. I am looking for a 3BD 1-2Bath home in NJ. Most of the homes range from $280k-$600k depending on SQ FT and the county. I work in NJ but my current lease is in NY.. Houses and apartments here in NYC for a 1-2BD apt, 1 bath cost $2K monthly for less than 800 SQ FT, no parking etc. 

 

 

Two big issues I am having is my income vs the house I need as I have 3 children and my low Mortgage score due to high utility *80%.. yes I know horrid* ..What would you recommend? If I used the AZEO method paying down all of my low limit cards would my mortgage score increase, while also decreasing overall utility? Do I have a chance at qualifying for a loan on my own or should I suck it up and rent for another year while getting my scores together and possibly picking up a part time/promotion?

 

Also I have not applied for any credit cards for almost a year. My last inquiries were from the purchase of my car back in June-July 2020 to gear up, for my travel when moving to a state that pretty much requires you have to have a vehicle. 


Couple of issues 

Being out of work for a month - this may or may not be a deal breaker depending on what kind of employment you have. 

Without knowing what other debts you have (cc, loans, etc) can't calculate DTI to see how much you could be qualified for except to say that the top end of the range you listed will never happen on your current income 


I am currently employed by amazon. I started a new position within the company, though it was not a transfer. I worked for amazon from Sept 2019-Oct 2020 and then started working the new position with Amazon from the beginning of December-Current. My pay is higher with steady hours and the ability to work OT. 

 

How is DTI calculated? This could very well be the reason, I will have to wait another year to purchase my first home. 


DTI is calculated by taking all of the minimum payments listed on your credit report (student loans are the exception if they are on forbearance/income based repayment, the actual amount that will be used in the calculation varies by loan type). Then add in the proposed new PITI payment. Divide that number by your gross monthly income to get your back end DTI. It sounds more complicated than it is. 

Alternatively, to calculate the maximum PITI you could be approved for: take your gross monthly income multiply it by the max DTI for the loan type then subtract all of your minimum payments, what is left is the max payment you can qualify for. 

 

Hope that helps 


Thank you for all of the info you provided! That made it extremely easy for me to understand. I calculated the max PITI I would get approved for and that seems to be $2504. So if i convert that to the price of a home with a 30 year mortgage... How much house could I buy Smiley Surprised

 

Additionally my DTI is around 32% but I do have 4 cards that I am going to pay off so that the minimum payments will no longer be applicable to my total reoccuring payments. 

Sept 18: EQ: 578 TU: 583 EX: 576
Sept 19: EQ8: 640 TU8: 645 EX8:640 April 20': EQ8: ??? TU8: 680 EX8: 673
Goal by Sept 20’ EQ: 700 TU: 700 EX:700

AA:


Goal: Auto Lease 2020 Jeep MOAB
Goal: Chase Sapphire Preferred
Goals Achieved Nov 19’: First Chase CC, Marriott Bonvoy w/ lowest APR rate of 17% April 20': First Citi CC W/ 15% APR rate Total CL:$21,400
Message 7 of 10
dragontears
Valued Contributor

Re: Go for it or wait another year?


@CivalV wrote:

@dragontears wrote:

@CivalV wrote:

@dragontears wrote:

@CivalV wrote:

So I am in the middle of a stressful situation. My lease is up March 15th 2021. The rent is nearly $3K monthly not incuding other expenses *Light,Gas, CC payments, Car payment, Car Insurance*. Me and my partner split the rent $1445 per. I would like to purchase a home instead of paying rent for another year but I am not feeling confident in doing solely based on my income. My scores are for the lack of a better term much higher than my partners *640-650* range due to high credit usage from not working for a little over a month back in October. My mortgage middle score is currently 636 which I believe is fairly low. My income alone is $4K which is not much. I am looking for a 3BD 1-2Bath home in NJ. Most of the homes range from $280k-$600k depending on SQ FT and the county. I work in NJ but my current lease is in NY.. Houses and apartments here in NYC for a 1-2BD apt, 1 bath cost $2K monthly for less than 800 SQ FT, no parking etc. 

 

 

Two big issues I am having is my income vs the house I need as I have 3 children and my low Mortgage score due to high utility *80%.. yes I know horrid* ..What would you recommend? If I used the AZEO method paying down all of my low limit cards would my mortgage score increase, while also decreasing overall utility? Do I have a chance at qualifying for a loan on my own or should I suck it up and rent for another year while getting my scores together and possibly picking up a part time/promotion?

 

Also I have not applied for any credit cards for almost a year. My last inquiries were from the purchase of my car back in June-July 2020 to gear up, for my travel when moving to a state that pretty much requires you have to have a vehicle. 


Couple of issues 

Being out of work for a month - this may or may not be a deal breaker depending on what kind of employment you have. 

Without knowing what other debts you have (cc, loans, etc) can't calculate DTI to see how much you could be qualified for except to say that the top end of the range you listed will never happen on your current income 


I am currently employed by amazon. I started a new position within the company, though it was not a transfer. I worked for amazon from Sept 2019-Oct 2020 and then started working the new position with Amazon from the beginning of December-Current. My pay is higher with steady hours and the ability to work OT. 

 

How is DTI calculated? This could very well be the reason, I will have to wait another year to purchase my first home. 


DTI is calculated by taking all of the minimum payments listed on your credit report (student loans are the exception if they are on forbearance/income based repayment, the actual amount that will be used in the calculation varies by loan type). Then add in the proposed new PITI payment. Divide that number by your gross monthly income to get your back end DTI. It sounds more complicated than it is. 

Alternatively, to calculate the maximum PITI you could be approved for: take your gross monthly income multiply it by the max DTI for the loan type then subtract all of your minimum payments, what is left is the max payment you can qualify for. 

 

Hope that helps 


Thank you for all of the info you provided! That made it extremely easy for me to understand. I calculated the max PITI I would get approved for and that seems to be $2504. So if i convert that to the price of a home with a 30 year mortgage... How much house could I buy Smiley Surprised

 

Additionally my DTI is around 32% but I do have 4 cards that I am going to pay off so that the minimum payments will no longer be applicable to my total reoccuring payments. 


I would double check that math, $2504/$4000=62.6% DTI 

what number did you multiply your gross income with? 0.42 is the conservative number max I have heard about is 0.56

Scores hover around 800
Haven't been AZEO in over a year
Rome was not built in a day, neither is a good credit profile
Message 8 of 10
CivalV
Established Contributor

Re: Go for it or wait another year?


@dragontears wrote:

@CivalV wrote:

@dragontears wrote:

@CivalV wrote:

@dragontears wrote:

@CivalV wrote:

So I am in the middle of a stressful situation. My lease is up March 15th 2021. The rent is nearly $3K monthly not incuding other expenses *Light,Gas, CC payments, Car payment, Car Insurance*. Me and my partner split the rent $1445 per. I would like to purchase a home instead of paying rent for another year but I am not feeling confident in doing solely based on my income. My scores are for the lack of a better term much higher than my partners *640-650* range due to high credit usage from not working for a little over a month back in October. My mortgage middle score is currently 636 which I believe is fairly low. My income alone is $4K which is not much. I am looking for a 3BD 1-2Bath home in NJ. Most of the homes range from $280k-$600k depending on SQ FT and the county. I work in NJ but my current lease is in NY.. Houses and apartments here in NYC for a 1-2BD apt, 1 bath cost $2K monthly for less than 800 SQ FT, no parking etc. 

 

 

Two big issues I am having is my income vs the house I need as I have 3 children and my low Mortgage score due to high utility *80%.. yes I know horrid* ..What would you recommend? If I used the AZEO method paying down all of my low limit cards would my mortgage score increase, while also decreasing overall utility? Do I have a chance at qualifying for a loan on my own or should I suck it up and rent for another year while getting my scores together and possibly picking up a part time/promotion?

 

Also I have not applied for any credit cards for almost a year. My last inquiries were from the purchase of my car back in June-July 2020 to gear up, for my travel when moving to a state that pretty much requires you have to have a vehicle. 


Couple of issues 

Being out of work for a month - this may or may not be a deal breaker depending on what kind of employment you have. 

Without knowing what other debts you have (cc, loans, etc) can't calculate DTI to see how much you could be qualified for except to say that the top end of the range you listed will never happen on your current income 


I am currently employed by amazon. I started a new position within the company, though it was not a transfer. I worked for amazon from Sept 2019-Oct 2020 and then started working the new position with Amazon from the beginning of December-Current. My pay is higher with steady hours and the ability to work OT. 

 

How is DTI calculated? This could very well be the reason, I will have to wait another year to purchase my first home. 


DTI is calculated by taking all of the minimum payments listed on your credit report (student loans are the exception if they are on forbearance/income based repayment, the actual amount that will be used in the calculation varies by loan type). Then add in the proposed new PITI payment. Divide that number by your gross monthly income to get your back end DTI. It sounds more complicated than it is. 

Alternatively, to calculate the maximum PITI you could be approved for: take your gross monthly income multiply it by the max DTI for the loan type then subtract all of your minimum payments, what is left is the max payment you can qualify for. 

 

Hope that helps 


Thank you for all of the info you provided! That made it extremely easy for me to understand. I calculated the max PITI I would get approved for and that seems to be $2504. So if i convert that to the price of a home with a 30 year mortgage... How much house could I buy Smiley Surprised

 

Additionally my DTI is around 32% but I do have 4 cards that I am going to pay off so that the minimum payments will no longer be applicable to my total reoccuring payments. 


I would double check that math, $2504/$4000=62.6% DTI 

what number did you multiply your gross income with? 0.42 is the conservative number max I have heard about is 0.56


OHHHH I did not add the correctly. So if I would like my DTI *which includes my current monthly payments + my possibly monthly mortgage payment* to be below 0.42% then I my monthly payment would have to be around $1700... is that correct? 

Sept 18: EQ: 578 TU: 583 EX: 576
Sept 19: EQ8: 640 TU8: 645 EX8:640 April 20': EQ8: ??? TU8: 680 EX8: 673
Goal by Sept 20’ EQ: 700 TU: 700 EX:700

AA:


Goal: Auto Lease 2020 Jeep MOAB
Goal: Chase Sapphire Preferred
Goals Achieved Nov 19’: First Chase CC, Marriott Bonvoy w/ lowest APR rate of 17% April 20': First Citi CC W/ 15% APR rate Total CL:$21,400
Message 9 of 10
dragontears
Valued Contributor

Re: Go for it or wait another year?

Correct, 4000 × 0.42 = 1680 this amount includes all min payments and the new PITI payment. 

 

42% DTI is a conservative max some lenders apply as an overlay, FHA can go above 50%. 

Scores hover around 800
Haven't been AZEO in over a year
Rome was not built in a day, neither is a good credit profile
Message 10 of 10
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