basic rule of thumb is income x3 equals safe loan to be able to afford.
$40k x 3= $120k loan. But consider, all of your debts together should be under 40%. That includes student, house, car and so on.

We are going to see interest rates rise, but house prices will drop to make that up. The $1000 a month payment that people can afford remains the same payment no matter what interest takes from it. If interest takes $50 or $400 the payment of $1,000 is all that can be afforded so prices will reach down to that price. They reached up when interest rates went way down.

Be careful, it is very easy to say that we had a nationwide drop in prices of 19% last year so it must be done. But ask this, when we have 10.2% unemployment, almost 16 million unemployed and tougher lending standards why would prices go up? But couldn't those bad economic numbers drive house prices down? I tihnk so, so do many others.

We do have serious foreclosures now and coming. The time to buy is not now nuless you get a great buy.

Foreclosure Filings Fall: A Delay of the Inevitable?
http://www.nuwireinvestor.com/articles/foreclosure-filings-f…
Where's the "Shadow Inventory" Crash? Maybe Just around the Corner
http://www.dsnews.com/articles/wheres-shadow-inventory-crash…
Foreclosure Activity Sets New Record in Third Quarter: Report
http://www.dsnews.com/articles/foreclosure-activity-sets-new…
Delinquencies and Foreclosures at Record Highs, with Shadow Inventories Looming: LPS Report
http://www.dsnews.com/articles/delinquencies-foreclosures-at…
Housing Crash to Resume on 7 Million Foreclosures, Amherst Says
http://www.bloomberg.com/apps/news?pid=20601087&sid=aw6_…

I hope you look at some of these links, it is a short cut to an education of what is happing in the real estate market. Look at house prices around 1998-2000. That is what I expect prices to go down to. If a house sold for $70k then with 30% inflation it should be around $90k now, not these greatly inflated prices we see.

Washtenaw County has received grant funding to assist home-buyers with down payment & rehab costs, and provides a GREAT deal of valuable resources for first-time buyers including education, budgeting and referrals.

There is a class being held next Monday, in case you want to see if there are still seats available. Check out the Washtenaw Housing Education Partners at the link below, and good luck!

Great answer Dunes! I agree.

Ms. Vanae, check the links out Dunes gave for the HUD site,about steps to buying a house and the loan programs available,but I do not suggest that my clients go the foreclosure or HUD route,simply because I have had MANY disappointed clients due to the fact that on those homes,they are bid on (many times you cannot see what the highest bid is so far)and on HUD homes, you are over bid most times and lose the chance of a home that you think was a great deal. Many people bid on those same houses. It has even been said ( no accusation here),that there are certain people that have teams of people that they pay to sit at the computer and watch the HUD site,making sure that their payer,so to speak, wins the highest bid. In that instance, you really have to have money to make money.

You are young yet and this doesn't have to be your home forever,so consider that when making an "informed decision",which a GOOD REALTOR can help you with when you are ready to buy. Agents are a dime a dozen,no matter where you are from. GOOD Agents are still out there! :=) Interview as many as it takes to find someone that you feel comfortable with and you feel will do the most they can do to find you a nice home.
Check out the REALTOR.com site as well. Alot of good resources there, and you can even find agents there for your city. I have provided you with the link. Once at the REALTOR.com site,look on left side of page,under "tools & trends",click on "advice and ideas" and then click on the buyer's guide". That has alot of info that you should read before making your decision about what agent to go with and what steps to follow in the home buying process.

Don't forget about the just extended Tax Credit for buyers! You can get $8,000 to use as part of a down payment now. Also,ask your agent to look for homes that have incentives, e.g. "Seller will provide $5,000 towards buyers closing costs" or some other amount),which will also go towards your bottom line of your mortgage.

There are alot of ways to get a down payment,a gift from a family member is one,but there are many down-payment assistance programs for 1st time buyers that are offered by banks, local governments and charities. Many are open only to low- or moderate-income buyers and some are targeted to specific communities. It's always good to check because you may be surprised at income levels that qualify, especially if you live in a high-cost area.

Real Estate, in my opinion is always a safe bet! The stock market is MUCH riskier, and once your money is gone, you have NO chance of recouping that,you might as well take your money & toss it in the trash! However, EVERYONE has to live somewhere! Just like Doctors & Nurses,Real Estate is and will always be in demand. Why pay someone elses mortgage off for them? That's exactly what you are doing when renting.

Hope this helps. :-)
Good Luck in all you do!
Vick

Do not see anything in the question inviting spam......(No spam please! When in doubt, please refer to our Community Guidelines.)

Ms. Vanae, You will be making decisions that have an impact on what may be the largest financial obligation of your life....These are extremely important decisions and it would be very unwise in my opinion to not be come informed enough to have some idea of what is going on....

Agents sell Services and you€ need to be informed enough to choose an good Agent to assist you in attaining your goals...This cannot be done by just contacting any Agent or Lender, that is just a foolish plan

The Hud site has an excellent breakdown of the steps in Buying you need to consider and become informed about and I would suggest going over it, the sorces provided and the tools you can use...
http://portal.hud.gov/portal/page/portal/HUD/topics/buying_a_home

This site has all current Fed Gov. Housing Loan programs. You can get specific information, compare options, or take a short questionnaire to determine your eligibility for each program.
http://www.govloans.gov/govloans_en.portal?_nfls=false&_…

Choosing an Agent is an important decision which can impact you in many ways (Good and bad) so be sure you are ready to interview Agents and know enough to ask the questions you need answers to before you Hire an Agent to provide the Services you feel you need. Do the same with any Lender you consider.

This is YOUR Obligation and YOUR Decision making process, there is no one else to blame if you do not give it the time and effort necessary to protect yourself...Learn, ask questions and good luck

Dunes

Hi Ms Vanae,

We would love to help you and teach you the steps necessary to purchase your first time home.
The price range you should be looking is is determined by many factors, not just your income but your debt to income ratios.

Do you get child support? In many cases that would count.

Send me an email and we will get your started on homeownership.

"I admire your initiative to want to OWN and believe that you should explore the possibilities. "

The sad reality is that the bank will own the home for the term of the loan. Afterwords you will have paid 3 to 4 times what the home is actually worth because of interest. Lots of people want to see you go into debt so that they can profit.

Be wise.

Dear home buyer in Ypsilanti ~ the place to start is with a lender. They will look at your income vs debts and expenses and let you know if purchasing is a possibility. If the results are that you are not ready to buy now, a good lender will help you develop a plan to put you on course to purchase in the future. I admire your initiative to want to OWN and believe that you should explore the possibilities. There are some low-priced / bank-owned condos in Ypsilanti that might be good for you. I have attached a link to 50 potential homes.

You should be renting with level of income. In fact, any level of income should be renting as realty will continue to bleed down in value for at least another 10 years.

Read throught these posts and you will discover that the only folks trying to buy realty are young and inexperienced. Today's buyer is next year's foreclosure.

Shadow inventory will keep prices down for along time. Put your money anywhere instead of realty.