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When is it my time to own a home?

Okay,
So I am not looking to buy a house right now BUT I want to as soon as I can. Here is my situation.
I graduated college last year, got a job within my degree, making 30 grand a year with 19 thousand in student loans and a 19 thousand car loan. My Fiancee did not graduate because she had to take care of her terminally ill Grandma. Even though she has not graduated on time, her student loans have kicked in and she owes 28 thousand. Since I have a job within my degree, I don't have to have it for 2 years to buy a house (so I am told) with the FHA loan. My Fiancee just received a job at a hospital where she will make approximately 21 grand a year. 
So what is the best option for the future and buying a home? I doubt I get approved for a decent mortgage and I doubt as a couple we even would. Will she have to have her job for 2 years before it is considered? Do you think out debt to income ratio is too high?

I am so confused and it just seems as though owning a home is so out of our reach.

I appreciate any advice you can give me on what our best option would be before buying a home together.
  • July 10 2013 - Cincinnati
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Answers (9)

 Here is my two cents, and I am speaking from personal experience. You said your fiance just started her job at the hospital. You need to sit down together and make a monthly budget and see if you can stick to it. Make sure you place at least 5% of your income into a savings account each month. After 3 or 4 months (typically longer) you will know how much you can comfortably afford to pay for housing expenses.
  Example--you pay 500.00 per month in rent now. A mortgage payment on the house you like would be 1000.00 per month. Are you currently able to pay all your current expenses, save at least 5% and put the other $500.00 away and still live comfortably?
  Sorry, don't mean to preach, but I am going through the same scenario with my son :)   
  If you are "chomping at the bit" right now, then sit down with a Loan Officer and go over everything. You may be surprised, one way or the other.  
  • July 11 2013
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You really need to sit down with a mortgage professional in your area, who has a lot of experience and will review your situation and recommend 2 or 3 mortgage options.

As far as a house or condo, there are also several factors to consider there too.   A condo may be less expensive, but what are its monthly condo fees?  Also, some condo complexes may not qualify for the type of financing that you'd qualify for.

I've owned a condo as well as homes and with a condo, you have to realize that financially you and everyone else in the condo community are all financially responsible for things that happen within the complex.  Also. with a condo, do you want to have people living above you or below you or next to you?  A house gives you more space from your neighbors.

If you want a mortgage professional recommendation, please contact me.

Good luck!  Dan


  • July 11 2013
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You're right. So long as you are working in the line of work you went to school for, you do not have a 2 yr waiting period. So far as your fiance, does she have any sort of work history? If she has a 2 yr work history and the new job is in the same business type/line of work then we can use her income without delay. If you elect to not include her income then her debts wouldn't be considered either. (This is for Ohio only - some other States do require a non-purchasing spouse's credit history etc to be reviewed/considered.) Sorry - had to include that since people from all over read these messages. ------------- So you begin asking questions, best option for the future..? Options not really sure what you're asking? Loan Options? Depending on your credit there are many options (530-580 credit scores 10% down and plan on 6 months reserves being required for worse case planning.  580-620 3.5% down, depending on your overall profile would determine if reserves would be required. 640+ a lot of options open up ie all loan programs (pending on credit ie any late payments or other items on credit) and the loan/rate pricing is better for each. Also with 640 plus for a first time home buyer, owner occupied, you "shouldn't" need reserves). Hard to say what you qualify for without knowing more information.  Debt to income.. it's calculated off obligated monthly payments not total balances. The loan program we use to underwrite your file would predicate the debt to income ratios we look for. As a general rule of thumb we're looking for 28/43. The front end ratio (28) is just the new proposed mortgage payment and the back end ratio includes the new proposed mortgage plus all of your other monthly debts. Debts that report on credit not utilities so on. The only other thing that I could add is that if there are compensating factors like reserves when you don't need them, bigger down payments than required, rental history (if its not already a requirement) and good job time (if applicable) are examples of compensating factors. The more a loan requestor can show the easier you make the underwriter's job in making his/her decision. If I can answer any other questions you might have, I'd be happy to help. Best wishes to you both, Kim Lawson, Ohio Licensed Mortgage Loan Originator, Licensing and contact information can be found on my profile.
  • July 10 2013
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Well first of all it will not always be out of your reach. Owning a hope is like setting up a site plan. We all have stepping stones we have to conquer before we move forward. I understand how it feels to feel like it just is not within reach. patience though, you don't want to make the wrong decision by acting to hasty. Just so you can understand, down payment is extremely important when purchasing a home. The more you can save the better off you are going to be. I also suggest having a nest egg in the event of an emergency were to occur, i.e. loss of job, unforeseen car repairs etc, and I know sometimes life does not allow us the option to exercise a plan of action but putting forth some effort towards the goals give us satisfaction and build momentum to do more. Bare in mind too that although there are first time homebuyers programs in place to help first time home buyers acquire the dream it also takes effort to sit down and effectively plan out a budget monthly based on your current bills. Do not forget to calculate clothes, tooth brushes, toothpaste, food, electric, water etc when doing so because living just to pay bills and a mortgage payment = unhappiness. Best of Luck :)

  • July 10 2013
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Profile picture for user21421179
Like 100 grand are you thinking or lower? I live in an area where I can get a nice house for around that.
  • July 10 2013
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Profile picture for Rebecca Marvel
Condos tend to be cheaper than houses.  Could be easier to qualify.
  • July 10 2013
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Profile picture for MyAgentSarah
The amount you are approved for is based on your debt to income ratio - which does sounds like it might be around 28, which will qualify you for a loan. However since your income is just $30k, you will likely be approved for an amount that is smaller than you had hoped for. 

It sounds like you definitely want to buy without your Fiance being on the loan, but your lender can run the scenarios and give you a better idea of what makes the most sense for you.

As a first time buyer, keep in mind that buying something just to get in the real estate game is key. As you build equity, in a few years you can turn around and invest that in a nicer home.

Good luck!  
  • July 10 2013
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If you don't mind me asking, why do you say a condo? We have been renting for 4 years now and we are sick of it. We wouldn't mind a condo but prefer a house.
  • July 10 2013
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Profile picture for Rebecca Marvel
How about a condo?  Good start I think.
  • July 10 2013
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