Profile picture for angelzheng987

Am I already to buy

Can i buy and afford a two family house, price range between 600k-700k if I can come out with 100-110K for the down payment, making 70K/yr income with good credit score. Plan to rent out one unit to help to pay my mortgage and I am comfortable to pay 2K every month toward to my mortgage
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December 15 2013 - New York
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Answers (5)

Profile picture for hpvanc
Do your own homework, you can verify that lenders will lend in this scenario and seek advice from many sources, but this is something only you can decide. I recommend making a fully considered and rational for you decision before contacting any salespeople.
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December 17 2013

Not sure which part of the country you are buying in, but if your county falls into a high cost area, you might be able to purchase a two-family home (assuming it will be your primary residence) using FHA financing, with a minimum down payment of only 3.5%.  The county loan limits for 2 unit properties starting January 1st will be up to $800,775.  So if you fall into one of these areas, buying a $600-$700k home would work, and will not require such a large down payment. 

However, if you can come up with 20% down, you would be much better off going conventional and avoiding the mortgage insurance premiums. 

Your rental income would not be allowed to count towards your qualifying income if you have no track record of being a landlord for at least 2 years, with that income showing on your tax returns.  So as stated previously, you will need to be able to qualify using just your regular income.

I would be happy to discuss the various options available and your qualifications.  David

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December 17 2013
You'll need to talk to a lender to go over what the rents will be, what the expenses will be, what your debt to income is and will be, and get a complete picture of what you're looking to do. You'll want to deal in real numbers, to see what the reality on the ground looks like. 

The first house I bought with my wife was a duplex, which ended up being a great decision for us because we were 21 and I lost my job a few months after we bought it. Since we were collecting rent on the other side we were completely within our budget for the short time I was out of work.

But, you have to remember when you do this that you're responsible for the entire mortgage when you don't have a tenant. That can be budget busting, especially when you're looking at such a large mortgage. That scenario is why lenders will take a long look at you, the property and the likelihood you'll keep it rented out.

Good luck!!

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December 16 2013
Buying a two-family house, or multi-unit, is a great way to subsidize your mortgage, and help keep housing diversity in your neighborhood (a critical ingredient to strong neighborhoods seldom discussed). You will need a lender to look at your specifics which include more details than you listed above.

But to prepare yourself, go find a mortgage calculator. Find out what property taxes are in the area you want to live. This can sometimes alter your qualification amount because property taxes can vary property to property.  Find out what rents are in that area as well. And add in another $150 expense monthly for insurance. You have the 20% down needed for a two flat. If you are comfortable with the number that appears after you subtract the rent from your mortgage payment and expenses, then you will at least have an idea if you are being practical.
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December 16 2013
Sit down with your local lender and complete the loan application with them.  The lender will then be able to go over your finances with your and let you know exactly what you can and cannot do.  
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December 15 2013
 
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