Financing in Kansas City>Question Details

Betty Ayres, Home Buyer in Kansas City, MO

i make 13.50 an hr. is it possible to get a home mortgage making this low income?

Asked by Betty Ayres, Kansas City, MO Sun Sep 4, 2011

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If you are working full time, then $13.50/hr comes out to $28,080/year ($13.50/hr x 40hrs week x 52 weeks) or $2,340/mo - and depending on the sales price range you are looking in, how much of a down payment you are planning on putting down, and your monthly consumer debt payments (car loan, student loans, credit cards, etc.) that may just be enough to qualify. If there is overtime income and you've received it for at least 2 years, then that can also help you qualify too.

KC, MO has a wide range of sales prices - what is the sales price range you are looking in? Depending on the other variables, you could be looking as high as a $140k sales price.

What type of total monthly payment were you looking to have? That includes principal & interest on the mortgage, property taxes (annually divided by 12), homeowners insurance (annually divided by 12), and homeowners association fees (HOA fees they will be often abbreviated as).

As a general rule lenders prefer that to be no more than 31% of your gross monthly income, which would be about $725/mo based on $2,340/mo of income. However up to about 45% can qualify if you have good credit, which would be about $1,050/mo based on your income.

Using FHA financing (low down payment at low interest rates for people who don't have perfect credit) you could expect about a $100k sales price with a 3.5% down payment to equal a monthly payment of about $725/mo.

Using FHA financing you could expect around a $140k sales price with a 3.5% down payment to equal a monthly payment of about $1,050/mo.

What are your monthly consumer debt payments? Do you have a car/auto loan? Student loan payments? Carry balances on credit cards? The more of those payments you have, the lower your "buying power" will be.

Have you been saving up for a down payment? How much are you looking to put down?

Credit is also important, you don't have to have perfect credit, but your credit in the past 12-24 months needs to be relatively clean (longer for events such as a bankruptcy or foreclosure), and of course the higher your credit scores are generally the more easily of a time you'll have in regards to your credit being approved.
1 vote Thank Flag Link Sun Sep 4, 2011
Hello Betty, the short answer is "YES" you can buy a home with your income. Hopefully, you don't have a lot of debt right now and you have some established clean credit. The answers below are correct; you need to start by talking with a lender or mortgage professional to get your pre-approved.

All the best and good luck!
Web Reference:
0 votes Thank Flag Link Sun Sep 4, 2011

Yoru first place to start would be to talk to a lender. There is bond money available in Kansas City and the city also has a program called the KC Dream program. These allow for very little up front from the buyer and allow you to get into home ownership. They have income guidelines and to be honest, I don't know that information but the lender will.

The lender will look at your DTI which is debt to income ratio. So, if we take your $13.50 and multiply it by 40 hours we get $540 gross income per week. The multiply that by 52 weeks in a year and you basically make $28,080/yr or $2,340/mo. Then the bank will want to know what you have for monthly debt. This is for the most part, credit cards, car loans, installment loans, child support, alimony, etc. The bank will then pull your credit report to verify the debt and obtain your average FICO score between the 3 bureaus. Your FICO score plays a very large role in what interest rate you will be able to get. The better the score, the better the rate.

The reason it is your first stop is because you don't know what you can buy until you know if you can get a loan and for what amount. Buyers must be prequalified in todays market because sellers will not accept an offer from a buyer who hasn't gotten preapproved.

I have some wonderful lenders if you would like to call me. I am happy to help. God Bless!

Sheila Vardakis
0 votes Thank Flag Link Sun Sep 4, 2011
Shane is correct! I have new first time byers that have purchased homes around 80 to 100K. Duplexes are a great place to start, I sell quite a few to first time buyers getting out of apartments and getting use to a little more of a payment, then they call me back later to upgrade and that way they are experienced and know what they are looking to do in the future market. there is a great market for these in my area.
0 votes Thank Flag Link Sun Sep 4, 2011
You will want to talk with a mortgage broker and/or lender. They will look at you credit, the amount of money you have to put down on your home, your current expenses, and other things. My team and I sell bank foreclosure as low as $10,000. Many of these are in poor condition and cash only. There are some that qualify for financing and/or special renovation financing. We've been able to help a lot of people that didn't think they could to stop renting and purchase a home. I hope that you are able to do the same.

Here is a website that you can search mortgage brokers and/or lenders

Joe Sauter-Florida Licensed Real Estate Agent
Prudential Florida Realty-Southeast, Florida
0 votes Thank Flag Link Sun Sep 4, 2011
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