Home Buying in Raleigh>Question Details

Redwhite, Home Buyer in Raleigh, NC

I currently make $34,000 a year, have zero debt and excellent credit. I have $10,000 to use toward a downpayment on a house. As I browse homes in

Asked by Redwhite, Raleigh, NC Wed Oct 7, 2009

the city I am relocating to, what price range should I be targetting for? Is it completely unrealistic to look at houses around $200,000? I have my heart and mind set on living in a certain area (because the nature of the city I'm relocating to) but the houses are more expensive. However, the homes in the area have high and reliable resale value. While I know I cannot rely on having a roommate forever, I do plan on having one to help offset monthly payments. Is a $200,000 home out of the question and/or should I focus on less expensive homes?

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Hi...your lender can help answer those questions for you, but a good rule of thumb is that you don't want your monthly mortgage payment to be more than 1/4 to 1/3 of your income. Keep in mind as well that you may want to keep personal financial information confidential as all agents represent the seller of real estate in NC unless we have an agreement otherwise w/a buyer... here's a link to the agency brochure that explains agency to buyers/consumers http://www.fmrealty.com/site/fmessenger/WorkingWithRealEstat… Not that what you're sharing reflects anything but having good credit, but it may affect negotiations should a seller know too many details about your personal financial situation.

When my income was around that level, I was only able to handle a mortgage of around 100K on my own (no roommate). It may be better for you to buy a home that you can afford on your own because roommates are never a guarantee and having a roommate can also cause the property to be considered an income producing property, which would affect homeowner's insurance and interest rates...and the roommate's rent would be considered part of your income (and taxable). One option for you could be to consider obtaining an FHA loan, which allows a non-occupying co-borrower (a family member)...you'd be the one who officially 'owns' the house, but having a non-occupying co-borrower can help you afford more house (as long as your family member has good credit, sufficient income, and is willing to co-sign on a loan for you). You can check with your lender to verify the information or talk to a tax professional & insurance professional if you're not sure about the effect of having a roommate documented for your loan application will affect you financially.

Which city are you relocating to? Our company can match you with a Realtor in the area you're moving to if you don't already have one there...we have relationships with companies all across the U.S. (and abroad).

I hope that information helps! Have a wonderful evening!
0 votes Thank Flag Link Wed Oct 7, 2009
Hello Home buyer,

I'd encourage you to talk to an experienced local real estate agent who can guide you through the whole buying process, starting a buyer consultation to closing on a home. You do have have to pay their fee. Seller will pay for the fee.

Thanks,

Jean
0 votes Thank Flag Link Wed Oct 7, 2009
You're certainly on the right track by asking these questions now before you get your heart set on a property that is outside of your price range. I like working with the lender in my office, Brad Benham with TowneBank Mortgage. You need to sit down with someone and look at all of the factors involved, not only income and debt but the differences between the various loan programs you can qualify for. There may also be special programs available for select zip codes and your lender, in combination with a top-notch Realtor, can guide you to the home that offers the most for your money.
0 votes Thank Flag Link Wed Oct 7, 2009
Redwhite,
As a licensed mortgage banker we look at your gross monthly income not net. Homes in this price range might work for you. There may be a few types of loan programs you could qualify for depending on your credit, down payment, future taxes and insurance. Debt ratios in some cases could go up to 50%. I would be happy to discuss your situation and pre-qualify you for a loan and send you a pre-qual letter. This will help your Realtor select homes in your price range.

You can email me at billn@fifcorp.com or call 1-800-999-2489 x7978

Thanks,
Bill
0 votes Thank Flag Link Wed Oct 7, 2009
Everybody is on the same page! Find a great lender. I'd suggest you speak with Chris Earnhardt at Hearthstone Mortgage here in Raleigh, NC. His number is 919-539-1210.

He's great and honest. They are also a bank and can handle loans in all 50 states. I'd don't know where you're headed, but start with the $$ before you fall in love with a home. It's a lot harder to go down in price than to head up.

Also, life can throw some curve balls. Make sure you're smart about buying instead of buying off of emotion. A great Realtor can dig up some deals or provide an alternative location that still fits your needs for a little less. It's worth doing research.
0 votes Thank Flag Link Wed Oct 7, 2009
Your first step toward purchasing a home should be to talk with a lender to find out where you stand. Too many times folks go out shopping for homes not knowing what they can actually afford. You may be able to afford more house than you think or you may need to shop in a lower price range, but in any case, first step, first step, first step...sit down with a lender and be aware of your position. Any real estate broker worth your time will have you do that first, so take that initial step first and foremost. As far as the roommate goes, their contribution toward helping offset your mortgage payment won't matter to the lender. It's your income alone that will determine what you can/cannnot purchase so don't even think about that at this point. Good luck in your journey. It's a great time to buy! :)
0 votes Thank Flag Link Wed Oct 7, 2009
Lenders look at ratios, usually they would want to see that your housing debt is is no more than about 28% of your income and your total monthly debt is no more than 36%. There are special loan programs that allow you to be a little more flexible with those percentages, but you would want to be careful not become cash poor and house rich.
The best plan would be to talk to a local lender. I would be happy to put you in touch with a caring and reputable lender in your area. In addition I would be happy to help you find a Realtor to help you search for the place to call home. Please email me through my website.
Do you know about the $8000 first time home buyer credit? You must close by Dec 1, 2009
Laura Grace
http://www.LGRealtor.com
0 votes Thank Flag Link Wed Oct 7, 2009
Redwhite,

The first thing you should do is sit down with a lender and discuss the options that are available to you based on your credit history, income, down payment etc. He/She will give you an idea of what you can afford and feel comfortable paying every month. Afterward, you should begin looking based on that amount.
I always recommend that buyers stay within the range that they can comfortably afford and not spread themselves out too thin. In the event you lose that roommate you'll be held accountable for making the mortgage payment every month. Also, there are taxes, insurance, HOA, and other incidentals that arise when you own a home. Often renters are not aware of these and they will increase payments as well.
Remember, you also don't want to be cash poor. So think about all of your options and invest wisely.

Good luck!
Lizete
Web Reference: http://www.LizeteSantos.com
0 votes Thank Flag Link Wed Oct 7, 2009
Less expensive.
You take home.... ? $2200/month?
That $190,000 mortgage + Taxes + Insurance will eat half your take home.

But, what you really should do is sit with a lender ASAP to figure out what you will qualify for, and your comfort range.
I don't think a room mate contribution should be a part of your calculation.
Web Reference: http://www.MikeJaquish.com
0 votes Thank Flag Link Wed Oct 7, 2009
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