Can I afford to buy a first home?

Asked by Ashley, Orlando, FL Fri Mar 21, 2008

Nearly all the mortgage calculators I've seen show monthly mortgage payments for less than my current rent. My boyfriend lives with me and splits the rent. If I were to buy a home, it would be in my name, but he would continue to split payments with me. The bank loan calculators I used showed that I'd need to make nearly twice my income to qualify for the loan amount I'd need. I even tried inputing his half the rent as monthly income. I'm very disheartened. If I can afford my rent, why wouldn't I be approved for a mortage of equal or less?

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Dianne Scott, Agent, Eustis, FL
Sat Mar 22, 2008
Hi Ashley,

I am sending you a link to the Orange County housing assistance program website. I would highly recommend you start there. There are various programs that will either give you grant for a down payment, which usually does not have to be repaid if you remain in the home for a designated period of time, or they may offer low interest loans. If for some reason you do not qualify for their particular program, they can recommend alternatives for you. They will counsel and guide you through the process. They usually partner with local Realtors and lenders who will be happy to meet with you at one of their seminars to help you. I am located in Lake County, so I am not totally familiar with how Orange County works, but ask if they have a list of lenders and Realtors they can provide to you. Your Realtor needs to be aware of how their process works for funding in order to avoid delays and pitfalls of working within their programs. By using the lenders on their preferred partner lists, the program usually insures that the lenders will offer you fair deals on financing and rates.

Best of luck to you!

(If this link does not work for you, just copy and paste this link in your browser to reach this website:…
1 vote
Zack, , Westchester County, NY
Mon Mar 24, 2008
A few things from a non-realtor. First, why do you want to buy a house? If you feel you're "throwing away money" on rent, you're wrong, The real return on housing as an investment is very small over the last 30 years, even with our insane runup recently that is being hammered down now. If you'd like to own a home for the stability, having your own place to do as you see fit, etc, then that's fine. Just make sure you can really afford it and have the down payment. Mortgage brokers can still do plenty of flexible things to get you approved for a loan you really shouldn't have, so what they'll qualify you for is not a number to use as a starting point. Ask yourself, what is the maximum you'd pay in rent on your current salary (preferably alone unless you're planning on getting a roommate if your boyfriend moves out). Then compare:

Your max rent payment


your anticipated mortgage payment
+ your monthly taxes (in NYC area, these are easily more that 1500/mo)
+ your homeowner's insurance, which may be high since you're in a hurrican area
+ Homeowners associate dues (if you buy a co-op, condo or townhouse)
+ 10% of your mortgage payments for repairs

remember, when you're renting and the hot water heater goes, you call the landlord and he fixes it for you. When taxes go up, its not immediately passed on to you. Does your rent currently cover any utilities? In NY its common for rent to cover heating the apt which with current oil and natural gas prices, is becoming a huge expense. Anything else your rent covers (water bills, internet connection, etc) add onto the list of things you have to pay for when you own a home. Also, do you have the 20% downpayment? If you do not, with the current market freefall, you could be upside down in 6 months (meaning you owe more on your house that its worth). In this scenario, it becomes nearly impossible to sell unless you're willing to take a loss and pay off that loss over a few years. If you were to become sick/pregnant, does your work pay you short term disability? Will this amount cover your bills and will your job be there are ready for you to come back when you're done? I'm young also and when I hear "getting sick" I think often that I'm too young for serious illness. But consider also getting something like mono. Its not that uncommon and you'll be out of work for 4-6 weeks. Can you cover this?

I'm not trying to be overly negative but all the advice you've gotten so far seems to imply that if your mortgage = your current rent, you should be able to buy. Homeownership is a much greater expense and responsibility and you should be prepared for it.

1 vote
David A Podg…, Agent, Delray Beach, FL
Mon Mar 24, 2008
As a Mortgage Broker myself, I think that you need to consider talking to a qualified Mortgage Broker prior to deciding as to the advice to follow.

Mortgage Brokers have the ability to analyze your specific needs and determine which if any homebuyer programs are available to you... and if they make sense at all.

The bank loan calculators are generic. There are government backed loans from the FHA and Fannie Mae that can help you in your situation...

Your boyfriend's money may potentially be able to be used as an income if he has been paying you over time.

Affording your rent is subjective though - you believe you can which is great... but the bank needs to be sure based on your income history that their investors feel that you are a safe investment.

If you would like to go through a prequalification, feel free to contact me.
1 vote
Mikem, , 01803
Sat Mar 22, 2008
Aside from the advice everyone else gave, which I agree with. Two things for you to consider:
1) There are some other expenses associated with beign a home owner, namely taxes, hoa and repairs/fixes to the house over time.
2) What happens if you break up with your boyfriend and he moves out? Would you still be able to hold the house or would you need to sell it?
1 vote
Myke Atwater, Agent, Santa Rosa Beach, FL
Sat Mar 22, 2008
I would recommend that you contact a couple of different lending institutions--each one has specialties that they concentrate on, and different "products". There is a company in our area that really has a handle on "first time homebuyer" bond issues, there are builders that assist by paying closing costs, rural housing programs that are government funded--there are many different ways to qualify for different grant programs to assist you. Contact at least 3 different lenders in your area and ask about these assist programs for first time homebuyers--prices are down, so it is a good time for you to be shopping, and there is funding out there to help you.
Web Reference:  http://www.Myke
1 vote
Eric Nutting, Home Seller, East Central Park, Orlando, FL
Wed Apr 30, 2008
If you would consider Davenport, Florida, we might have a home for you for purchase. We could do a lease option and finance the first year or two for you. 3/2. Sunridge Woods. Great neighborhood. Just an idea. Good Luck.!
0 votes
Richard Tres…, Agent, Orlando, FL
Fri Apr 25, 2008
A major consideration in this market is credit score and verifable income. As suggested, talk to a couple lenders. If bank financing is not an option, consider rent to own or seller financing to establish a payment history and build your credit. I work with some sellers who will consider both and can also provide you with other homes that may meet all of you needs including the financing. Please feel free to give me a call 407-421-3002
Web Reference:
0 votes
Mark Raponi, , Longwood, FL
Wed Apr 23, 2008
You should speak directly with a lender to see if you qualify. There are several first time homebuyer programs out there and you can still get into a home with little or no money down. Home prices have come down and interest rates are is a great time to buy! Feel free to conatct me should you need a lender referral familiar with the first time homebuyer programs.
0 votes
William Spiv…, , 32803
Tue Apr 22, 2008
I would certainly investigate the available Down Payment Assistance Programs after you've determined a couple of things. 1. Where geographically do you want to live? Each County in Central Florida has different funding and guidelines and even within Orange County, the City of Orlando is dramatically different from Orange County. Both the City and County have dramatically changed their guidelines recently so it's very important that you are working with someone knowledgeable who can assist you, bringing me to the second question. 2. Who is your lender? Not just the company but the individual as well. Many lenders have large departments where perhaps only one or two people have real knowledge about Down Payment Assistance. The difference to you depending on who your lender is can mean hundreds of dollars monthly and could affect your loan amount by tens of thousands of dollars. If you'd like some referrals for lenders, don't hesitate to contact me!
0 votes
Normalina Ma…, Agent, Winter Park, FL
Sun Mar 30, 2008
Hi Ashley,

The first step to understanding how much home you can afford is by becoming fully preAPPROVED. I recommend speaking to a minimum of two mortgage lenders (within a 45 day time frame) who specilize in assisting 1st time home buyers with receiving downpayment and closing costs assistance. They'll be able to look at your credit score, credit history, income, debt, etc. and tell you how much assistance you qualify for depending on your situation. I have clients who have and are receiving $10-45,000 in downpayment and closing costs assistance. I can assist you with finding the right lenders and help negotiate the right deal once you become preapproved. Feel free to call or email for further assistance.
0 votes
Tara Garkows…, , 34787
Tue Mar 25, 2008
Hello Ashley,
I have brand new town homes for sale in Sanford/Lake Mary that start in the $140k. You can own a home for $840 a month principle/ interest. We are paying all closing cost if you choose to partner with our lender. There is a full builder warranty so you don't need to worry about repairs. Check out the link below and make an appointment so we can show you what your buying power is!
Thanks for your time,
0 votes
Hi, , Virginia
Mon Mar 24, 2008
renting is cheaper,
the good news is that housing prices are coming back down to earth.
wait until 2010
save your money
you will be able to afford a nice home.


good luck
0 votes
Phil Fowler, Agent, Brandon, FL
Sat Mar 22, 2008
Hi Ashely,

You have received some great advice. I would also add, try to get a local lender. Should you be approved and are ready to buy your first home, if the lender is local, ask them to come to the closing with you. If there were to be any problems, it's a lot easier to be able to talk to the person face to face than try to email them, especially if in another part of the country.

This is a really exciting time for you, I would also attend a "Builder's First Home Buying Seminar". You don't have to buy a home from them, but the information you will receive regarding the process will help educate you.

Once you have been approved, choose an experienced Realtor to help find your home, whether it is new or resale. Make sure that Realtor will come to your closing also.

Best Wishes,
Web Reference:
0 votes
Voices Member, , Orlando
Sat Mar 22, 2008
Hi Ashley! The best advice I could give you is to call a mortgae expert. They'll be able to look at your credit score, credit history, income, debt, etc...all of which are going to be a factor. They'll impact the dollar amount you qualify for, as well as your interest rate which will vary based on those factors, determining your monthly payment. If you don't have anyone in mind that you know and trust, feel free to give me a call. I can refer you to some great lenders to get a couple of different opinions. They'll tell you how much you can afford, and even more important, they'll ask where you want your monthly payments to be and tell you what price range you want to look at to keep that monthly payment. That's the first step toward buying your new home. I hope to speak with you soon!
0 votes
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