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How much home can we afford?

Hi guys, my girlfriend and I are planning on buying a home within the next couple of months in north NJ (Union City, North Bergen, etc). We are probably going to go the condo route since we can't find any nicer homes in our price range in the area. I know there are calculators online but I wanted to see if anyone one here, an actual person, could help us figure out how much house we can afford after all expenses are taken into account.

Let us know what information you need from us. I have been pre-approved for a 300k loan without including my girlfriend and that is the price point we have been looking at when searching for a home. My income is about 72k/year and her's is 45k. Any help is greatly appreciated. Thanks!
  • February 26 2011 - Union City
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Answers (4)

Yes, $300k loan is about right number, if you take 28% of the gross monthly income to pay for the mortgage (Principal+Interest), the mortgage monthly payment is $1,680 ($72k / 12 * .28). With the interest rate 5.125% for 30 years term, you can borrow $308k. The home price that you can buy is $308k + downpayment.

http://homesand.net/Mortg ... ipal.aspx

Contact with this agent for more information about the property tax, home insurance, etc...
http://www.zillow.com/profile/Livingston-NJ/
  • February 26 2011
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Profile picture for the_country_hick
House prices should fall a lot more for at least 3 years. Waiting and renting would probably be your best bet. Many who buy condos hate them for reasons of noise and smells from the neighbors. If you have kids you will be back asking how to sell a condo that is to small you owe to much on. It is better to wait and buy right one time. It takes around 10% of a sales price when trading houses.

Check out how many months of housing inventory there are in your area. Also how many sales are foreclosures or short sales. Then see how buying activity is compared to last year and past years. Buying was down 23% last year nationwide. Some areas saw over 40% fewer sales.

Use the local info tab above to find out some useful facts about your area before buying anything.


Take a look at the site below. It shows what should happen to house prices this year.
New Jersey

The expansion of the federal government's Hardest Hit Fund to $112-million is intended to help homeowners who are unemployed and under-employed in New Jersey as a result of the U.S. financial crisis. Lower housing prices accompanied by near record low mortgage rates should stimulate buying activity towards mid-year, but not before home values decline further in New Jersey, which has the highest population density of any U.S. state.

Before buying see if it makes financial sense to do so. The link below shows how to decide that using your numbers.
"Does it make more sense to buy, or to rent? Here is the way to find out for sure."

Sometimes renting a a slightly higher monthly payment is really he best and cheapest way to go. For a very different perspective read below.
"Why rent if you could buy for less money? Valid reasons inside."
  • February 26 2011
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Actually you need a professional mortgage loan offcer and the rates as far as I know is 4.50%-4.75% for FHA loan with 3.5% down !So shop more for mortgages before you lock your self up .Also, you need to fill a financial sheet of your expenses, and depts to income ratio at that time can be calculated ...Good luck to you and your girl friend !
  
  • March 01 2011
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Adding on to HomeSand's response, also consider the monthly Property tax (which will run you between $7K-8K annually for a condo in that area), the monthy maintenance (HOA) fee and your monthly outstanding debt.  
Good Luck!
  • March 02 2011
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