Foreclosure in Rockville>Question Details

L, Home Buyer in Rockville, MD

50K salary and good credit score! Cant Find an affordable condo to purchase.

Asked by L, Rockville, MD Tue Dec 18, 2007

I make around 50K a year and have good credit score but can't find an affordable condo or townhome to purchase in the DC metro area. I even supplement this salary with PT work and additional income. However, I dont qualify for most affordable housing programs but dont want to waste my money by renting at $1600 a month. Any suggestions ??????????????????????????

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21
HOC's Down Payment Assistance program allows for income - $86,268 for single household and for two memeber househole - $123,240. You must work and purchase in Montgomery County.
to find out more ..... http://www.maryland-fha-loans.com/HOC.html
1 vote Thank Flag Link Mon Nov 16, 2009
Try Pers development web site. All their products are below $260k and all geared towrds first time home buyers. Have lots of programs for people like u and me. I bought a unit last year for 200k (!bedroom). Love it. Their site is http://www.persdevelopment.com

Good luck

Sia
1 vote Thank Flag Link Sat Nov 8, 2008
Hi:

Sure, lots of suggestions. Here are a few:

First, find a good Realtor. One who understands creative techniques and creative financing. Also, one who will actually look through the MRIS, not just build in an automated search to send you properties.

Second, I don't know how much you have in savings or the details of your finances, but if you could afford to buy a $200,000 condo or townhouse, there are plenty out there. Especially if you get creative in purchasing or financing. But even if not, I know of 3 bed/2 bath condos in Reston for $175,000 or less, and townhouses in Woodbridge for around $200,000. In fact, I just did a search for single-family homes or townhouses in Northern Virginia, price under $200,000, minimum of 3 beds, 2 baths, and came up with over 200 listings. In fact, there are about 65 for under $175,000. Most are townhouses in Prince William County; many are foreclosures. So...the properties are out there. As for Maryland, just did a search in PG County--came up with 9 under $175,000. Not a whole lot, but they're out there. And I didn't even search condos...just townhouses and single family homes.

More ideas: I like lease-options. Find a property that's either listed as a rent-to-own/lease-option, or that's listed for sale, long days on market, or listed for rent. Structure a lease-option (some Realtors know how; many real estate investors do, too). You rent for a while, with part of your rent being credited toward the purchase price. During or at the termination of the lease, you can if you choose purchase the property for an agreed-upon amount. Or, if you want, you simply let the lease run out and move on.

Hypothetically, because I don't know your finances (and disclaimer: I'm not a lawyer or accountant, so what I'm offering is not legal or accounting advice): Suppose you find a property you really like. It's on the MRIS for $275,000. It's vacant. You tell the owner: I'd like to rent your property for $1,600 a month. I'd like you to credit $500 a month to the purchase price, if I decide to purchase it. And I'm willing to pay $250,000 for the property. And I'd like a 1 year lease-option, with the right to renew for two additional 1 year terms.

Owner thinks: Hmmm. Property is vacant. I'm being bled dry by it. I don't know what's going to happen with prices. I'd love to sell for $275,000 now, but this is a way to eliminate my negative cash flow, and it gives me a shot at selling for $250,000...probably what I would have accepted if I'd received an offer today.

So, you're in the property. You pay $1,600 a month rent, of which $500 is credited to the purchase price. (That's a heck of a lot better than if you'd gotten an amortized loan.) In one year, if you exercise your option, you'll have accumulated $6,000 in option money, bringing your actual purchase price down to $244,000. If prices have declined, you can continue to rent or you can terminate the lease and move on. If prices have remained stable or risen, you may have a bargain at $244,000. Let's take it out to three years. In year 3, if you exercise your option, you'll have accumulated $18,000 in option money, bringing your actual purchase price down to $232,000. And, though I don't have a crystal ball, 3 years may be enough time for home prices to have firmed up a bit. If the property was actually worth, say, $265,000 at the initiation of the lease-option, it might be worth, say, $280,000 three years from now. And you'd have the option, but not the obligation, to buy it for $232,000.

One other suggestion: The way I bought my first house (through a creative Realtor) was to buy a house and rent out the lower level. The additional rental income helped offset my expenses. The agent even lent me a portion of her commission on the transaction to enable me to fix up the downstairs (to add a kitchen) to make it a complete rentable unit. That was over 20 years ago. (I've put a link to her site below.)

In short, someone with a reasonable salary and a good credit score who wants to buy a property in today's market can do so.

Good luck.
1 vote Thank Flag Link Tue Dec 18, 2007
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
I hate to be the one that breaks the bad news to you, but you probably can't afford to buy in DC on a $50k salary. Your payments would be around $1700 after PMI, taxes and insurance, which is a large portion of your income. It may be nice to own a house, but you need to be in a position where you can pay for repairs if the roof needs fixed or the electrical needs replaced. All you would be doing by buying in your situation would be setting yourself up in a house that you can't afford.

I think one of the most common misconceptions in our society is the belief f that they are entitled to be able to buy a home. DC is an expensive place to live and your salary just doesn't isn't high enough to own a home YET.

Your best bet is to start stockpiling cash and paying off all of your other debts first (credit cards, car, student loans, etc). Once you have the debts paid down and some cash reserves, the loan will not be as intimidating to a lender.
0 votes Thank Flag Link Tue Feb 15, 2011
My personnel recommendation is to temporarily drop the idea of buying a home. Based on your current income level, focusing on your education and career is your best option. As real estate does not seem to be rising anytime soon, your career is currently the best option for investing your hard earned income and time. Obtain a bachelors or masters in something marketable (for example an IT field or business) and come out ready to enter the job market making twice your current income. By then the housing market should be more stabalized and you ultimately will be much further ahead than you would have been purchasing today.
0 votes Thank Flag Link Sun Jun 22, 2008
Have you checked on FHA loans? You should be able to buy a condo right now. There are some in Rockville under 200,000.00 and in decent shape. Please call or email me with any further questions.
0 votes Thank Flag Link Thu Jun 19, 2008
These are all good advises! It all comes to your purchasing power! How much can you afford? Where can you afford to live? Living in the City, or Suburb?

Home ownership is the right way to go, however if your budget is $1,600 that put you around $200K purchase price. (Condos + Town Homes)

Step 1. Call a Loan Officer and discuss your options and explain your credit history http://(www.myfico.com), and learn about your affordability. If you are ready to proceed, give your SSN and get a Pre-Approval.
Step 2. Consult a Real Estate Agent to define your home buying needs, view some properties that within your purchasing limits.
Step 3. Read about Affordability Index (http://htaindex.cnt.org/) to understand location vs. travel to work.
Step 4. Choose a location + the right house + make a decision = Home Ownership

Or you wait to save more money, or get better job and than buy a home!

Word of advice-

Don't wait to buy a Real Estate, Buy Real Estate and Wait!

Need any help, we are here to guide you and bring Joy to your home buying process!

Cheers,
0 votes Thank Flag Link Wed Jun 18, 2008
Wait a few years, houses will be much cheaper. Save your money for a good down payment. Try to have 20% down payment.
0 votes Thank Flag Link Wed Jun 18, 2008
What sales price did your Loan Officer approve you for? Start there, then search the County for homes under that amount. You can do a search at this site and have the search email you when new listings are found that meet your criteria.
(If you don't have a Loan Officer, try choicefinance.net. They will let you know your max approval and show you all options you qualify for.)
0 votes Thank Flag Link Wed Jun 18, 2008
Is commuting an option? I work in the Frederick area and there are plenty of affordable condos here if you're willing to commute as many do. You can contact me if interested, I'm happy to send you some listings in my area.
Web Reference: http://www.sharonbremer.com
0 votes Thank Flag Link Sun Jan 13, 2008
L,
A few things spring to mind as I read your post.

Condo fees in the DC area aren't cheap! A $300-$400 condo fee can make seemingly affordable condos out of reach. Sometimes, you are better off going with a slightly more expensive townhome without the condo fee.

Do you have a lot of other debt that is causing your debt to income ratio to be too high? At $50,000 a year if you have a large car payment, credit card or student loan debt, it can quickly make you afford less home.

As for closing cost assistance programs, if you are in the DC metro area and making $50k a year, I know of at least 2 programs that you should be able to qualify for. You can take a look at my blog, they are in the 2 most recent posts.

********
Patti Shawgo
Loan Officer
My blog: http://www.ThoughtsAboutRealEstate.com
443-802-6864
Carrollton Mortgage Services, a subsidiary of Carrollton Bank
0 votes Thank Flag Link Mon Dec 31, 2007
Hi! There are now many places for you to purchase a townhouse or condo. This would be what I would do...I would first find a Realtor that I felt comfortable working with. I would get their suggestions on finding a good lender and talk to them. I would explore all the areas that I wanted to live in and then try to find a seller that is motiviated to HELP you buy their home. By that I mean find a seller that will possibly pay to buy down a point or two on your loan so that the payment will be affordable for you in the long term, ask them to help with closing costs and maybe even help with your condo or HOA fees for a year. This is a wonderful time to get your first home - you really can do it if you are careful about not overextending yourself.....there are many properties on the market. Please feel free to call 240-997-8654or e-mail at AnnMarieClements@Gmail.com me and I will give you more info.
0 votes Thank Flag Link Thu Dec 27, 2007
Great question and certainly a similar problem that many interested buyers in our market place have. There are a few different avenues that I would suggest you explore. First you may want to check with the lender you are using and compare the program that they are offering you with programs other lenders can offer you. In the past few months, 2 of the lenders I work with have been able to beat almost all the quotes that purchasers have received from other lenders with lower rates and less fees. This can certainly adjust your payment and out of pocket money up front drastically. If you would like me to refer you to either or both of those lenders, please let me know. They will provide you with good faith estimates without you committing to use them. Also, I would suggest that you interview agents and hire one who will negotiate on your behalf and work effortlessly to find you the right home! knowing that you are willing to spend $1600/monthly, there is a large number of homes within the DC metro area that you would be able to afford with little or no money out of pocket, whether in DC,MD or VA. There are going to be many neighborhoods and subdivisions in each county and even city in the metro area where you will be able to find a great home within your budget. If I can do anything to assist you, please call (888.540.5674) or e-mail me anytime!
Web Reference: http://www.jdrrealty.net
0 votes Thank Flag Link Wed Dec 26, 2007
Thanks Lewis, I appreciate your kind words.
0 votes Thank Flag Link Wed Dec 19, 2007
Hi L:
I certainly understand your concern of not wanting to waste money on rent. Renting is basically paying someone else's mortage. There are some first-time homebuyer programs out there that you may qualify for that may help you with something towards closing costs. A good lender can provide you with that information. Another option is to ask for seller help. You didn't mention if you had any money to put down or you were trying to do 100% financing.That certainly will make a difference in your monthly payment.
What areas have you been looking in? If you're willing to go a little further out into the Gaithersburg, Germantown or Frederick area,I know of condo's that have been on the market for a while and may be willing to negotiate.
Web Reference: http://www.northropteam.com
0 votes Thank Flag Link Tue Dec 18, 2007
great answer Lavy -- the most important first step is what do you qualify for. Cash and borrowing power is king! Find that out and then you control the sales cycle......
0 votes Thank Flag Link Tue Dec 18, 2007
Get pre-qualified for the loan, this a good way find out how much you can afford. Once you find out the amount of the loan and you are first time home buyer, then you look for down payment assistance, there are lot of state and national programs to get funding for down payment. Just google 1st time home buyer in maryland. Go to my web page for pre qualification and click on mortgage assistance.
0 votes Thank Flag Link Tue Dec 18, 2007
Depending on your situation. Find a roomate and split a nice rental, or bite the bullet for 2-3 years and rent from a private owner. It also depends on how much you have saved. There are some rents with option to buys, You can also find a girl.boyfriend who rolls big.
0 votes Thank Flag Link Tue Dec 18, 2007
The key is to find out what exactly you can afford; by working with a lender and knowing exactly what purchase price and condo fee will fit into your budget.
Then you can start your search for properties. By hiring a Realtor as a Buyer's Agent - they can show you what area(s) you can then afford and show you those properties which best fit your needs.
Keep in mind that Buyer's Agents are typically paid by the seller - not you, the buyer.
I also have a FREE Internet Search that will allow to search all the properties for sale in the DC area.
0 votes Thank Flag Link Tue Dec 18, 2007
You are wasting your money on rent. Do you have a lot of other bills that are causing your debt ratio to be too high?
Call me at the office - 410-956-0050 and I will be glad to discuss...
Lewis Poretz
Open Mortgage
0 votes Thank Flag Link Tue Dec 18, 2007
Dear Home Buyer, it's really a shame when housing cost exceed the average wage earners capacity to find affordable housing, but with the accellerating cost of housing almost everywhere, a possible suggestion might be to follow the example of some Asian and Mid-East families I know that combine their funds, down payments, and resoources to purchase large homes for sharing. This of course, requires a change from the American living habits of the past. As second option would be to look for employment similar to what you have in a less expensive area of the country. While there may be an adjustement in nominal wages in doing this, there would be greater, compensating benefits in acquiring a lovely home at a decent price. If you need suggestions as to possible areas where homes are affordable, send me an email. Good luck
0 votes Thank Flag Link Tue Dec 18, 2007
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