Profile picture for cr2012

Looking to buy a 500k house.

Looking to buy a 500k house. Put 150-200k down. Currently have 450-500k in the bank from an inheritance but only making 30k. After 2 years school will be completed and income will increase to 100k+, guaranteed. There has to be some options out there because of the substantial savings but so far nothing because of the small income. We wanted to make an offer on this house but got stuck when it came to the financing because of our current situation. Any suggestions?
  • February 02 2012 - US
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Answers (8)

Profile picture for gsaraujo1
You have 500k in cash in the bank why don't you just pay for the home in cash? interest will make you lose money. You should just pay for the home in full and have no bills then use the 30k to live and once your 100k salary kicks in you will have no debt. 
  • January 25 2013
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Profile picture for user4223037

There are many insane advices in this thread.

I earn nearly 200k per year and I would never buy a house above $250k.

It's ludicrous how people have abused the credit system just to live a surreal life.

What about other necessities?  Schooling of your children.  Personal professional growth expenses?  Living life outside of 5000 sq. ft.?

It's very sad what I'm reading here.

  • December 10 2012
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What? If you have the money get a deal now. More specifically if you are wanting a $500k home then get one really worth 600k. Even if you were given a low interest rate compounded over 30 years your 500k investment is really gonna cost you depending on the interest rate around 800k easily.Just buy cheap and only pay county taxes. Most buyers are not able to buy outright.
  • February 09 2012
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If you have an income of $30,000 per year the highest payment you'll qualify for is $1,247.50 financing the property with conventional financing, including the property taxes, insurances, and association fees.

Now if you know how much the taxes, insurnaces, and association fees are, you could subtract those from the $1,247.50 and back into your maximum principal and interest payment. 

Then you could use a mortgage calculator and enter your maximum monthly payment, the term of the loan, and the interest rate, and this will give you the amount you can finance on a particular property.

Please keep in mind that each property will have different taxes and may require different insurances, and these figures can vary greatly from neighborhood to neighborhood.

These numbers also asume that you will have no other debt or monthly payments counting against you.

You could have a family member cosign for you to increase your income.

I hope this helps and good luck.

  • February 02 2012
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I am not sure if the new home will be your only debt or if you have other types of revolving debt.   It appears to me that by the $30K that you are earning per year and no other debt, you would be safe purchasing a house with a loan amount of $209,500.00 range.   The reserves that you have in the bank are a very strong point to your approval, however, they are liquid assets and can go out as fast as they came in.    As a bank they look at your income against the debt to ensure that if the reserves are gone you can maintain an ability to afford your home.  

So maybe a larger down payment?  or a smaller home for now until your income increases? 

I wish you the best of luck and hope that you are able to get the house of your dreams!
  • February 02 2012
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I hope you started talking to your local bank. I would suggest you interview at least three lenders. Hopefully someone may say ok with a higher than average rate, but then you can refinance after your income increases. Good luck!
  • February 02 2012
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Profile picture for Gary Bell
You could put down a larger down payment if you have that much in the bank. It would lower your payment. What seems to be holding you up is the debt-to-income given your current earnings.
  • February 02 2012
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Profile picture for shapiroamg
How about some seller's financing? Perhaps put 50% down with a interest only loan for 3-5 years. That way you can make payments, the seller gets some income, and in a couple of years your refinance into a regular mortgage and the sellers collect the rest of their cash.
Would work if the sellers dont need all the funds now.
  • February 02 2012
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