Profile picture for zuser20140315153152651

Buying a home with long time boyfriend

Hi all-

My boyfriend and I have been together for quite some time now (3 years) and will most likely be getting married soon. Currently, we are leasing a 980 sqft condo in downtown Memphis and just hate that we are throwing away money when we could be investing in a very nice home for that amount. 

 We are both working professionals, my income is about $32k and his is about $47k and we both have credit scores of 700+. We have a down payment ready now, about $8000 saved up and it will likely be more by the time our lease is up here. Just wondering your opinion on if we could qualify for a joint loan and what a good price range for us would be. Neither of us have any major debts, the only bills each of us have are credit cards which are always paid off at the end of the month and he has a $450 car payment. 

 We are currently looking in the $140,000-$150,000 price range. Do you think this is reasonable and would this be possible for us to do? I understand that we have many legal things to think about as far as ownership and property rights, which we will be getting a contract written up for all of that. This is more of a pricing/loan question. Also, he is eligible for a PenFed loan. Is this a good route?  What would you suggest?

Thanks so much!
Hailee


  

 
 


 
  • March 20 2014 - Memphis
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Answers (10)

Best Answer

You seem like a pretty forward easy deal. The general rule of thumb is to take your gross annual income and multiple it by 4 and that's the loan you should be able to qualify for. So for you income level and wanting to buy at $150K property, that's a snoozer deal, a peice of cake. Just make sure you're in capable hands as we have a lot of Rookies out there in our business. Make sure you vet your Loan Officer, I get too many phone calls from stressed out borrowers who were pre-qualified only to get a call in the 11th hour that they loan was denied.

Best of Luck!
  • March 21 2014
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It seems that you have a decent chance at qualifying for a home loan of that range, but more details would be needed to give you an accurate answer to that question. Although you have listed many important details regarding your finances, there are still more questions to be answered. Your ability to obtain a loan relies on multiple factors. A lender will need to look more closely at your finances in order to determine whether or not you can qualify for a mortgage. The best thing for you to do is to speak with a knowledgeable lender to see if you can get started on financing a new home. If you need additional assistance, feel free to reach out. Good luck!
  • March 21 2014
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I think you need to save more money, Hailee. $8000 isn't a lot of money, and if you put most of that into a down payment, you'll be one car problem away from having no savings at all.

Responsibly, you should have six months' living expenses saved up aside from your down payment and closing costs. Anything less than that is courting danger.

Attorneys write up partnership agreements all the time for people buying real estate together; it doesn't matter whether they're dating or living together or not. Donald Trump buys property with partners, and they have written partnership agreements - so should you.

It's not even a question of whether you will stay together - I recently heard of a couple who had bought a house together, then bought another house and kept the first as a rental. One of the couple was asked for money to help out a family member, and guess what? There was a serious disagreement about how the proceeds of the sale would be divided.

Anyway - save some dough, talk to a lawyer, then go buy a house together, you crazy kids!!
  • March 21 2014
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You definitely want to hammer out the details of the purchase with an attorney, to cover both of you if the relationship changes. It can complicate the process of selling if both parties no longer agree. In addition you would want to define your ownership splits as well.
  • March 21 2014
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Profile picture for wetdawgs
Should you decided to buy a home with a friend/partner etc without the benefit of a legal relationship, make sure you sit down and hash out the details and get them on paper (with an atttorney) before signing for a loan and the property.    While we hope you'll never need this, if you do, you'll be glad you had it.  
  • March 21 2014
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Profile picture for Jolynna
Hi Hailee, Ditto on what the others have already said here. You should be able to qualify based on the info you provided, but the only way to know for sure is to get prequalified with a lender. I highly recommend using a local one with a solid reputation of getting loans closed. I'm happy to send you names and contact information with some that I recommend. And if you are looking for an agent to help you find that new home, I would sure love a chance to meet and interview with you! Best of luck to you both. It's a great time to buy a home and a very exciting step!
  • March 21 2014
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Go to a lender and once he runs credit... See if your credit report has stuff that you may need to clean up. I think the odds are in your favor. Good luck. 
  • March 21 2014
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Profile picture for joespake
Hailee,
I always direct my new clients to talk to an experienced local mortgage person.  He/she can review your credit, help you fix any issues you may have overlooked, and give you a reasonable expectation of the costs involved in purchasing and owning a home.  Expect your mortgage person to patiently advise you on the best path to take in your home purchase.
 Please contact me directly for a list of highly qualified Memphis mortgage folks
  • March 21 2014
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Hailee,
I don't think you will have any problem qualifying for financing. There are homes in a number of areas that you could qualify to purchase.  Its just a matter of where you would like to reside. There certainly are a number of issues to consider in terms of how you take title to property but those are questions which should be addressed with a real estate attorney. The first thing to do is to contact a local Realtor who can assist with your home search as well as connect you with a good mortgage professional and a good real estate attorney  I'm sure I can assist you with this. Give me a call or send a note and we can discuss further.
  • March 21 2014
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Profile picture for pknott
Hailee,

Your price range seems very reasonable.  I don't think you'll have any issues getting a loan of that price range.  Conservatively, Dedicating 25% of your income towards household expenses is a good rule of thumb.  (mortgage payments, taxes, upkeep)
  • March 20 2014
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