Home Buying in Tucson>Question Details

Sarah.murch10, Home Buyer in Mesa, AZ

Is it even possible with my salary that I can buy a house on my own?

Asked by Sarah.murch10, Mesa, AZ Fri Apr 25, 2014

I'm only 20 and would love some basic advice on what type of home I would be able to afford. With a monthly salary of about 1200 a month, if I'm lucky. Therefore the mortage payment would have to be around $500-$600max. Is it wishful thinking to even think that I could buy a house? Especially since I haven't really established credit yet? Any advice appreciated. Thank you.

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Hi Sarah, Bryan and you are about right about the mortgage payment and a monthly payment of $500-$550 a month is approximately a mortgage of about $70,000-$90000 (the mortgage payment includes your taxes and insurance and any mortgage insurance you might need),. but you also mention that your $1200 is only if you are lucky. Some of the things we look for when underwriting a mortgage is that the income is dependable and that not only is a potential borrower/homeowner able to afford the mortgage payment but is also likely to want and intend to pay it. So we look at your credit history to see that you have both the ability and intent to make your payments on time. So it sounds like you need to work on a few things. Developing a credit history and developing a dependable source of income. Happy to discuss further with you how to make it work for you.

This information is not intended to be an indication of loan qualification, loan approval or commitment to lend. Other limitations may apply.
http://www.GoodMortgageInTucson.com
Minette Goldsmith, your Tucson Mortgage Loan Officer at V.I.P, Mortgage, Inc. 520-975-3909 mgoldsmith@vipmtginc.com
Company licenses National - 172492 State - 0115261
Individual licenses National - 261487 State - AZ: LO-0912618
VIP NMLS#145502

Equal Housing Lender
0 votes Thank Flag Link Wed Jul 16, 2014
Sarah,

I purchased my first home when I was 23 and I can empathize with the position you are in. The best place to start is definitely a local lender where you can sit down and discuss your finances and how much home you can afford. Recent changes in the lending laws dictate a debt-to-income ratio of no higher than 43% which for a $1200/month salary would be $516; this ratio includes all of your scheduled monthly payments (student loans, credit card minimum payments, car payments, etc).

I hope that helps a little and be sure to talk to a lender who can look at the details of your individual situation and advise you on how to proceed. They can also provide you information on how to establish and build your credit. Lastly, there are free sites like CreditKarma.com and Credit.com which can assist in monitoring and building credit.

Good luck!

Regards,

Bryan K. Taylor, REALTOR
(520) 345-4548
Tierra Antigua Realty I East Office
http://www.SouthernAZHomes.net
0 votes Thank Flag Link Wed Jul 16, 2014
It is free to find out, talk with a local lender. There should not be an obligation or cost for you to do that. The best part is a good local lender should not only show you where you are at, what you can get approved for now, interest rates, mortgage calculator, etc. but what you can do to increase your credit scores. That way you can work on it, take the "wishful thinking" and turn it into a reality in a couple of years.

Next, talk with a good local Realtor when you are ready. Best of luck.
Spirit


Spirit Messingham, PLLC
3rd Generation Full-Time RealtorĀ®
Tierra Antigua Realty
Direct (520) 471-6900
SpiritRealty@cox.net
http://www.TierraAntigua.com
0 votes Thank Flag Link Fri May 2, 2014
Sarah, I think the answer is not yet. Most loans allow debt service of less than 50% of your income. And, that includes your principal and interest, real estate taxes, home insurance and any other minimum monthly payments on your credit cards, car loans, student loans, etc. And, if you are lucky to get to the $1200, then you may be better off not buying quite yet, because you might not want to be unlucky and still have a mortgage payment due. Every transaction is different though, so it might be worth discussing one on one. You are welcome to call me to get some direction. 520 975 3909.
1 vote Thank Flag Link Mon Apr 28, 2014
Hi Sarah. Check out http://www.hippoteq.com. Hippoteq is a great online tool that chooses the best mortgage for your needs -- kind of like a broker on steroids. It's free and asks for no personal information.

If you answer the questions truthfully and get results, it means that you probably qualify for a loan. If you don't get any results then that probably means that you're not ready yet. Even if you don't qualify (don't get results), you can still ask any questions you may have in the "Conversations" tab in the loan results page and a licensed mortgage loan originator will answer them in a timely manner.

Here is Hippoteq's process:

First, they assess your personal situation through a series of questions, all done online, to help determine your personal needs, preferences and risk tolerance.

Next, they get quotes from multiple lenders based on these needs. Their proprietary loan scoring system (HippoScore) then matches users with home loans based on compatibility, making it easy to evaluate multiple options.

Finally, you are given access to a personalized mortgage management portal that keeps the entire mortgage process running smoothly and facilitates communication with live mortgage guides.

If you're comfortable using online services like TurboTax and Mint.com and are in the market for a home purchase, this is a great service to check out!
2 votes Thank Flag Link Sat Apr 26, 2014
Hi Sarah,

No agent who has answered your question is speaking from a point of discouragement. We are answering from a place of knowledge and professionalism.

While I see you've posted in Tucson, let me tell you about Mesa since your profile says that's where you are, or are from. It is my opinion your options won't change much in Tucson.
Up to a $40,000 purchase price, there are nine places. Six of them are manufactured (mobile) homes in need of repair, and one of the six is in an age restricted community. The remaining three are patio homes which are also in poor condition and have an HOA fee of $110 per month.

Financing a mobile home is "extremely" difficult (bordering on "ridiculous") and FHA financing is not available for condos and patio homes where the lion's share of units are rentals. What that means is ALL nine would require cash to purchase and more cash to repair.

Take your time. You're only 20 and as such your life is just beginning! You need a stable job whose income is reliable. You also need to establish credit. FHA financing (as of today) requires a 3.5% down payment. You should also be prepared to pay closing costs which average 3%. On a home costing $100,000 - that's $6,500. From there, you need more cash for: furniture, appliances, utility connections, etc. Plus, you'll need money in savings.

You aren't ready now, but answers to your question put you in a great position to take action in the future.

Good Luck!
1 vote Thank Flag Link Sat Apr 26, 2014
Nice answer.
Flag Fri May 2, 2014
Hi Sarah,

Don't allow others to discourage you. I have helped many people your age with your salary purchase homes.

I am more than happy to speak with you and see if there are any options.

Sincerely,

Lisa Markham
Envoy Mortgage, Ltd.
NMLS# 947738 / AZ# 0921717
(O) 520.612.0480
(M)520.240.9602
lmarkham@envoymortgage.com
https://lmarkham-envoy.mortgagewebcenter.com
0 votes Thank Flag Link Sat Apr 26, 2014
Unless you have a pile of cash you will not be able to purchase a home.
Why?
Using very rudimentry projections, the purchase price of the home you could buy will be in the $40,000 ball park. It may be very possible to purchase a condo at that price. It may be possible to purchase a house in need of extensive repair for that price.

Chances are you will need to finance your purchase. Wells Fargo is the only lender I know who will fund such small loans. But you have no credit history. After you pay for the inspection and appraisal, Wells Fargo will deny your loan. You will be left about $1,000 poorer as a result.

What should you do?
You are 20, plan to buy a home when you are 30.
(good things could happen and you buy at 25)
-
Establish a budget. You must include a savings component for your down payment. You may not use this money for a down payment, but you will most certainly need it to appear in your bank statement.
-
Live below your means.
-
Reduce your debts
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Increase your income. You clearly have access to the internet, which is the great equalizer, so use this resource to make some money.
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Pay your bills on time.
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When you have $5,000 (or more) saved, and a timely paying history, contact a REALTOR to review the existing real estate market and determine what is practical for you to buy. The REALTOR will refer you to a lender who has a successful history of providing loans for people like you purchasing real estate like yours. If you start with the lender first, you won't realize your mistake until your loan is denied 4 days before closing, and you will be left poorer.

Finally, temptations will cross your path. These temptations wear suits and appear as Rent-to-Own or Lease Options. Don't do it! You will be left poorer as a result.

Best of Success,
Annette Lawrence, Broker/Associate
Remax Reattec Group
Palm Harbor FL
727.420.4041
0 votes Thank Flag Link Sat Apr 26, 2014
Hi Sarah.

Have you considered you'll need a down payment of 10% to 20%? For a $100,000 house that 's a lot of cash. In this economy there's a chance that house might go down in value. What would you do if the house you put $20k down on dropped in value to $80k next year? Ouch.

At this stage of your life do you even want to be tied down to house? The debt would be such a large part of your income you may wish you hadn't burdened yourself with the debt. Rent a cheap place, save your money for the day you're ready to buy a house.

I'd say you should think carefully about what you really want. Ask advice from family and people who care about you.

Mike
0 votes Thank Flag Link Sat Apr 26, 2014
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