Alright Ive been on the hunt for a house the past month. I'm not going to actually start the process till November after I'm married though, only because of all the money I need for the wedding. Which leads me here. I dont want to get pre-approved to just wait another six months, and in the mean time just letting my credit get better.
I'm only buying the house based off my income and credit.
Gross Income- $33,000 roughly
Credit Score- 747
3 Car loans Paid off
All Debt Paid off besides regular credit card usages for every month, but less than 3% usage every month
If someone who is involved in the mortgage or loans can maybe give me an idea of the price range I should be looking at, I would greatly appreciate it
The simple rule of thumb is to buy a house that is 2.5-3 times your income. Example: 33k/yr income = $75k - $99k home price. In your situation though, will you new wife be working and if so, will you be including her income? This will be a determining factor on how much you can be approved for. I wouldn't apply until you're close to being ready to buy as your situation (and the housing market) will change. Congrats on your upcoming wedding!
Is $33k/year your salary?
Whereabouts are you looking to buy?
How much of a down payment were you looking to put down?
There is also another formula that is often used to calculate how much you can afford per month (e.g., what mortgage payment you can comfortably carry).
Gross Income X .28/12
$33,000*28%/12 months = $770.00 monthly mortgage payment
Then, your credit score and other factors will determine your loan finance rate. Depending on the finance rate you qualify for and the length of mortgage you wish to carry, this will determine the principal amount of the loan.
Depending on how you run the numbers, there can be a fairly broad range of home prices you could shop for. For example, for a 15 year fixed rate mortgage at an extremely low rate of 3.75%, you could possibly swing nearly a $120K loan. Assuming you've saved 20% down, your house price could be around $150K. You could shop for homes ranging all the way up to $175K, with room for negotations.
For a 30 year fixed rate mortgage, though, you could still keep your payment around $770-$850 house payments but afford a much higher principal. Just know that the total interest you'll pay over the life of the loan will be much steeper. You'll pay around $40,000 in interest for $120,000/15 years and $130,000 interest for $200,000/30 years. Each will have nearly similar monthly payments, but in one case, you'll end up paying almost $100,000 extra in interest over time.
So, you can see that how much house you can afford will largely depend on the loan terms you qualify for and the duration of the mortgage that you want.
I set mine (rent payment) at 24%. This seems to be an easy amount for me to manage/save and have some useful cash flow.
The simple rule, of thumb is to buy a house that is 2.5-3 times your income. Example: 33k / year income = $71k - $96k home price. In your situation though, will you new wife be working and if so will you be including her income? This will be a determining factor, on how much you can be approved for.