Financing in Brooklyn>Question Details

Bsns2010, Home Buyer in Brooklyn, NY

1) Is it possible to get a mortgage to buy a $270,000 condo if my income is $25,000; I can put 22% down and I have a good credit score and no debt.

Asked by Bsns2010, Brooklyn, NY Tue Sep 6, 2011

2) can I get a mortgage for the same condo if I will have a SELF-employed co-signer. If yes, how much higher the interest rate would be in this case?
Thank you.

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The question you should be asking yourself is, can I afford to pay the monthly cost? On your income you can't. Your take home income will not allow you to pay ConEd. What about eating, getting to work.
If you have a co-signer, will they pay the mortgage? common charges, real estate tax? If not, don't fool yourself. You have enough trouble on your income to qualify for a rental without having a foreclosure on your credit report.
0 votes Thank Flag Link Wed Sep 7, 2011
Mitchell is on the right track but the numbers seem off a bit - $224k loan amount at a 4% interest rate would have a monthly payment of $1,031.22. Throw in the condo fee of $200/mo, taxes of $250/mo, and insurance of $25/mo (you need "walls-in" coverage on a condo these days)... that would equal $1,506.22.

Bsns2010 income is $2,083.33/mo, which $1,506.22 would be 72.299% of - way too high to qualify. In general your housing ratio should be no more than about 31%, but up to about 45% can qualify, so based on that example you are roughly 27% too high on the debt ratio for the housing payment.

With a self-employment co-signer, their income and their debts (including where they live) will also be included in the qualifying ratios - so while it's possible you could qualify with a co-signer, just the fact of having a co-signer is NO guarantee that it'll be the trick to being able to qualify.

As long as the co-signer has credit scores as good as yours, they should not negatively impact the interest rate you would qualify for since it's still being treated as a primary residence (your primary residence).
0 votes Thank Flag Link Wed Sep 7, 2011
Dear Bsns2010:

You have to speak to a mortgage banker and get your self pre-qualified. If you need to have a co-signer, your co-signer will have to be pre-qualified as well. That is the only way you will get a true answer to your question.

Having said that, let me give you a hypothetical example, lets say a consumer purchases a condo for $270,000 and puts down 20%. The mortgage amount would be $224,000. If said consumer is qualified and gets a 30 year fixed mortgage, the monthly payment would be about $905.00 (based on a 4% 30 year fixed mortgage). Add to that real estate taxes and insurance (estimated at $300.00 per month) to get the total living expense (known as PITI), in this case $1205.00 per month.

With that type of monthly carrying cost, the bank usually would want to see you reporting an income of at least $35,000.00 to the IRS. Keep in mind that these numbers can vary based on the buyers other qualifications so you must speak to a mortgage banker to find out definitively what you can or cannot do.

If you need help finding a great mortgage banker, please contact me and I can refer you to one. Good luck!

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Tue Sep 6, 2011
Unfortunately although our experience could probably answer this question for you, Most agents should not answer this question because it is outside the scope of our Real Estate License.

I would suggest that you contact a local loan officer that can review your financial information to see what financing options are available to you. Every one's situation is different and the basic criteria does not paint enough of the picture for us to give you an accurate assessment.

Good luck!
0 votes Thank Flag Link Tue Sep 6, 2011
For an accurate answer regarding mortgage qualification, do visit with any loan officer....be aware that a mortgage pre-approval letter is required in order to determine your price range and for any offers to be taken seriously.
0 votes Thank Flag Link Tue Sep 6, 2011
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