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As said above, you guys just don't make enough to be able to afford a house at that number. You would be in such a better financial position to look at houses, condos, or coops in the $85-175K range as a starter home. Put 20% down and live there for 5-7 years. Save the remainder of your money. Then in 5-7 years when you are both making more money (hopefully), you'll be able to afford that expensive house.
You will be in foreclosure within 2 years if you continue on your current path.
I would never buy a home with that low income and nice nest egg, or if I did it would be a much cheaper starter home that you can stay in for 8-10 years while your salary climbs and you can let that nest egg build in value through investment. Then you can buy a much nicer home and be able to afford monthly payments with salaries. 200k in investments at about 6% a year = 12k a year that compounds = over 100k more money saved in 8 years. By then you should both be making considerably more and you can buy a great home.
Why have such a low income and then dump all of your capital into a home where you can't access it, that is not guaranteed to rise in value, when it can be in the markets making a lot more money?
She just got certified in what she studied for seven years. She has been working same job for two years making more each job she goes to.
So she has 2 years of employment history, you either none or a couple of years "on the books". Have you factored in your reserves? The bank is likely going to want to see 6-12 months of money in the bank to pay your mortgage given the short work history, low income and high DTI.
This doesn't have to be cash, but I don't imagine either of you have this sitting in a 401K.
If you're desperate to buy I agree with the other poster and suggest you buy a condo. Because your income is so low you won't benefit from the tax writeoff, and you won't build much equity in the first 10 years anyway of a 30 year mortgage. If you are planning a family any time in the next 5 years the last thing you want to do is be house poor with the prospect of the main breadwinner taking 12 weeks off.
So she has 2 years of employment history, you either none or a couple of years "on the books". Have you factored in your reserves? The bank is likely going to want to see 6-12 months of money in the bank to pay your mortgage given the short work history, low income and high DTI.
This doesn't have to be cash, but I don't imagine either of you have this sitting in a 401K.
If you're desperate to buy I agree with the other poster and suggest you buy a condo. Because your income is so low you won't benefit from the tax writeoff, and you won't build much equity in the first 10 years anyway of a 30 year mortgage. If you are planning a family any time in the next 5 years the last thing you want to do is be house poor with the prospect of the main breadwinner taking 12 weeks off.
The issue with the condo is that we need a home with a side entrance or back entrance for her to privately practice rather than shelling out 500-1000 to rent an office.
The issue with the condo is that we need a home with a side entrance or back entrance for her to privately practice rather than shelling out 500-1000 to rent an office.
Depending on where you are situated and your wife's business, that can open up a whole different can of worms...
Depending on where you are situated and your wife's business, that can open up a whole different can of worms...
Exactly, now you're talking about needing the house to be both a residential and business, which, depending on the town, can require different zoning and permit prospects.
Exactly, now you're talking about needing the house to be both a residential and business, which, depending on the town, can require different zoning and permit prospects.
Understood. Good point.
What would you guys suggest as price range for us? 299 and below will bring us into undesirable areas. We would like to be in the 300s.
What would you guys suggest as price range for us? 299 and below will bring us into undesirable areas. We would like to be in the 300s.
I, personally, wouldn't want to put that full $200K down on a house. I'd want to save most of that. I'd look at small starter homes, condos, or coops. You can get coops in nice areas for low prices. There are some in Sayville that can be had for between $85-$125K if you want 1 or 2 bedroom units. Buy that, stay there for 5-7 years. Save, and earn more. Then you can buy that dream house, in the nice area you want, for $400+K.
Oddly enough when I spoke to a loan officer without running our credit I just wanted to know what type of loan the bank would give us at 200% down and 1000 in taxes etc. and the guy said $289,000 loan. That's what confused me because when I looked up homes for 450k our debt to income was at 50%. The math for me was 289+200 is $489,000 home to afford.
We can surely rent locally for 1800 a month. But why rent what we can afford a home and pay $1700 for rent and start a family in a few years and start building equity?
I completely understand where you are coming from. I am living in my first house for the last 6 years and I can tell you that owning has been much more expensive than I anticipated. There are alot of hidden costs and sometimes its very frustrating. I think your attitude in this discussion is great... Learn from what others are saying.. but I think you need to be concerned about over-extending.... Like any project, you need to adjust your budget for a 10%, if not 20% cost adjustment, so factor that in... It will help you in the long run, and you will be much happier for it. You can do a lot with 68,000 if you overcome the housing issue. Once you go down this path, there are costs that you wont recoup for a long time.
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