It will depend on your credit score. You can get conventional financing with as little as 3% down but it requires 720+ credit scores.
Part of the reason you've been limited to 125K is because of your down payment. FHA requires 3.5% or $4,375.00 on 125K but the principle, interest and mortgage insurance payment is only $714 per month. Depending on what the taxes and condo fees are you still have $536 to work with based on your budget.
How much do you need for the places you're interested?
The no money down USDA loan is a great option but you would have to look at homes in the following areas.
There are other areas but these appear to be the closest to Lynn.
Please feel free to contact me for more information on the USDA loan or if you need more help.
If that loweset middle score is below 680 then FHA might be your only option. It is possible to raise your score in a month or two as well. Since you mention Sutdent Loans, I am wondering if this is what is causing your score.
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William Raveis Legends Realty Group
We are focused on condos because we feel that owning a house would be too much (i.e. if something major was to happen). We feel more comfortable knowing that we would be part of condo association. I know that if something goes wrong within our condo than we are responsible but on the other hand anything goes wrong on the exterior of a condo my condo fees would protect that. As far as our middle score is concerned we are around 672 for both of us. One last issue we had with FHA loan was that we had to justify our student loan as it is applied to our debt to income ratio and it something that the current mortgage broker feels is working against us. Our student loans donâ€™t got into repayment until the earliest of June 2012, in which case we still have on average another year plus of forbearance we can apply and this is something we are tying to convey to our current mortgage broker.
Thank you again.
At 140K you should be ok to go FHA since the down payment would be $4,900 and you have $5,000.
As far as figuring out what's available on a conventional loan, I would need to know what your middle score is.
The other "issue" here is that any loan program is going to require that the condo is "warrantable" so that issue isn't just an FHA issue.
Is there a particular reason why you're so focused on condos?
Allison (asker's wife)
I want to thank everyone so much for your responses and suggestions and my wife and I am really hoping we can find a great place within our budget level. We are definitely going to look into the USDA loans and I had a question outside of the USDA loans and FHA loans and that is with conventional loans if you have a lower credit score than 720 and only have about 3.5% for a down payment will we still be eligible for a mortgage? And what would be the forecasted interest rate and potential monthly mortgage payment on a mortgage loan of about approximately $140K, as those are condo price range we are enjoying though we can still find a place for under $125K? Anyway Thank you again and please keep the suggestions coming, I know my wife is very pleased with the responses so far. Thank you again.
Fannie and Freddie both have 3% down products
I think you need to move beyond keeping the mortgageh housing payment (P&I, Taxes, Condo Fee) equal to your rent. There is a tax benefit to home ownership where if you are able to itemize and deduct your interest paid and property taxes, a slightly higher monthly mortgage payment might equal out to your current rent when income tax savings are considered. It might be helpful to see the difference if you have a tax professional show you on a tax planning program.
My suggestion that you take a first time home buyer's class (you will need it if you apply for downpayment assistance program) where you will learn all your options and become aware of programs available to you - for a list of the classes go Lynn Housing Authority,12 Church Street or online at http://www.lhand.org
Some towns offer a grant for downpayment assistance with either o% interest or very low interest. For instance, the city of Lynn has grants and loan programs where the assistance for downpayment (up to $5000) can be forgivable - see http://www.lhand.org/resources_pages/grantsandloans.html. If you are considering living in the North Shore, please go to http://www.northshoremahomeprograms.com/
to find out what kind of programs are available to you.
Do not give up, this is the time to buy - never in 40 years have the interest rates and prices been down at the same time. You are in the driver's seat, take advantage of it, yes you can!