Home Buying in Baton Rouge>Question Details

Marie, Home Buyer in Lafayette, LA

With a salary of about $34,000/yr and downpayment of $25,000,what is the max amount of a house or condo they can afford & what's the monthly

Asked by Marie, Lafayette, LA Thu Jun 30, 2011

payment?

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In Louisiana on a homestead property the first $75k of home value is exempt on state & parish taxes (but not municipal!), thereby increasing purchasing power (ex. home is worth $70k - you pay no state/parish taxes), but at the same time certain areas of Louisiana can have some pretty high homeowners/flood insurance costs, decreasing purchasing power.

East Baton Rogue Assessor's explanation on the Louisiana $75k homeowners exemption: http://www.ebrpa.org/General-Information

It's good to be familiar with the property taxes & homeowners insurance rates in the area as that'll also affect what one can qualify for, and there are quite a bit of other variables too.
0 votes Thank Flag Link Thu Jun 30, 2011
Hi Marie,
A good rough estimate of what you can borrow is 3 times your yearly salary. So 3 x $34,000 = $102,000. So you can probably get a loan for $102,000. But if you have $25,000 down payment, then you can probably afford a $127,000 for a house or condo. Start looking, but wait another year to buy, prices are still declining. Good Luck
0 votes Thank Flag Link Thu Jun 30, 2011
You really need to sit down with a couple different banks or motgage brokers to discuss your specific circumstances and to see what they can do for you. With the home financing market being what it is, there are just so many factors that are changing. For example, people that used to be able to qualify based on their debt-to-income ratios may not be able to now and even if they do, they may see a higher interest rate than they would have previously.

The best answer is that it depends...
0 votes Thank Flag Link Thu Jun 30, 2011
Still would need to know:

1. How much the consumer debt payments are each month (credit cards, student loans, car loans, etc.), as someone with $800/mo in consumer debt payments isn't going to qualify for as much as someone with $100/mo in consumer debt payments
2. How much the monthly HOA/Condo fee is (these can vary quite a bit - have you checked online to see what the range of HOA/Condo fees are for the ones you are interested in?)
3. Credit scores
0 votes Thank Flag Link Thu Jun 30, 2011
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