How much house can we afford?

[angel_baby_1_2]

1. Credit.  FICO ScoreWatch is 685, Discover FICO is 711, Husband's score are roughly the same. Both of these will most likely jump back up to 750+ as they were before after we pay off our credit cards which we are taking advatange of the 0% APR.
2. Income.  Myself 30k; Husband 20k+ (both yearly)
3. Source of income.  Both employed, I'm on salary and he works for his family's business.
4. Monthly debt payments.  Currently have 7k in credit card debts which we would pay off BEFORE applying for a mortgage. Therefore our monthly debt payments would be 0.
5. Employment Both of us are working full time. We both graduated from school last year, and therefore have only started working this year.
6. Assets/Reserves.  ~8k in our bank, 40k safety deposit box
7. Location.  Nevada, Clark County
8. Property. Single family home
9. Value.  Not sure how much we could QUALIFY for, but we would like something in the 300-400k range (we would like our monthly payments to be no more than 2500/month)
10. Occupancy.  Primary residence
11. Transaction Type. Purchase, first time home buyers

[TheGardner]

I'm not sure I would be comfortable in that price range. 28% of your income is a safe number for your mortgage payment roughly $1200 per month. Depending on taxes/insurance/PMI perhaps $200k?

Of course depending on the market in your area will determine if this is a workable number..

Good luck!

[jexxie]

I would definitely n9t feel comfortable either. My husband and I make about the same but only have about 12k in the bank. Only debt is 235 car payment. We have a 5 year old and another on the way. The houses we are l9oking at are about 100k and 2400 a year in taxes and im still terrified we won't be able to afford it!

I would play around w8th the mortgage calculator on bankrate.com and look at your budget and plans for the future. Good luck!

[angel_baby_1_2]

We would be comfortable with that payment because he makes more than just the 20K, hence why I put the + however that is how much he shows. How much the banks would be comfortable lending us with that amount is our main question. We figure it would be a higher amount than normal since we have 0 monthly payments.

[topa]

Think it depends on down payment mostly for your situation. I played around with the zillow affordability calculator and it gave me around 240k with a 20% down.

I think if your dh can come up with a higher income number, say like 80k, your affordability should hit the 400k Mark.
http://www.zillow.com/mortgage-calculator/house-affordability/

[meehan22]

if you show 50k on paper, and your max payment you want is 2500. That means in a year thats 30,000 and your income is 50,000. Leaving just 1,600 a month for expenses. And I am assuming the 50k doesn't include taxes and such that is taken out. Dont see how a bank would approve. Will have to get more on paper I believe for approval.

[wa3more]

Old rule of thumb was to get a mortgage 2 to 3 times annual income. i think it still is valid today.

50k annual income is $4,166 a month. Even at 40% of income going to mortgage at 3.5% for 30 years equals a 370k mortgage almost 7 times income. If you assume this represents 90% financing , you would still need 40k down. This does not include taxes. I would not let me mortgage payment exceed 35% of annual income.

not sure you will get this type of financing in todays market. Lending has loosened a bit but people with 750+ fico scores were having a hard time for a while.

[wa3more]

+ 1 on what Gardner said.

250k or so for a house price tops.

[angel_baby_1_2]

I understand what you guys are saying. Correct me if I'm wrong but, I thought lenders were looking for 45% DTI, which would be 1875$ per month on 50k a year. That would roughly equate to a 300,000 mortgage right? So if we wanted a house for 350k, we could put 50 down and finance the rest of the 300 within our current listed salaries?

[angel_baby_1_2]

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@meehan22 wrote:

if you show 50k on paper, and your max payment you want is 2500. That means in a year thats 30,000 and your income is 50,000. Leaving just 1,600 a month for expenses. And I am assuming the 50k doesn't include taxes and such that is taken out. Dont see how a bank would approve. Will have to get more on paper I believe for approval.

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The 50k is after taxes