What is the best formula or advice for affording a condo/townhouse? My wife and I have stable jobs, and were already pre approved for an FHA loan

Asked by Sean Michael O'Mallon, Staten Island, NY Fri Apr 27, 2012

I work for the city, she works at a hospital in Brooklyn. We are recently married, and would like to move from a small 1 bedroom apartment to a 2 bedroom condo/townhouse to capitalize on this down market. we can only swing 3.5% down, don't have much in the bank, and have some miscellaneous debts. We both have great credit (above 750 each), and are trying to figure out what is feasible for us to afford in a mortgage. We gross about $120,000 a year combined. Can we afford a mortgage at all? What is the most reliable advice toward seeing what we could afford monthly. I know PMI is a factor, plus HOA fees, along with insurance and taxes. We are just nervous about getting in over our heads, plus, we found a home that we both love, but are too afraid to make a move because the mortgage would potentially be around $2,000 a month with all fees included.

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Andrew Tisellano’s answer
Andrew Tisel…, Agent, clifton, NJ
Sat Aug 11, 2012
another option if you are not ready to buy
Try Curbing your spending and make it a goal to pay off some of your other debt.
Once you accomplish your goal you will feel a lot better about buying.
Best wishes
0 votes
Anna M Brocco, Agent, Williston Park, NY
Sat Apr 28, 2012
Since you state that you are already pre-approved, consider asking your loan officer all your questions; he/she can better advise as it relates to your financials/affordability. Keep in mind that lenders have their income v. debt criteria for qualifying for the amount of a mortgage—oftentimes requiring that housing costs are not in excess of one-third of gross income in addition to a stipulated income v. overall debt-ratio. What lenders don’t know are borrowers’ non-debt spending habits, present and anticipated. You, the borrower, need to consider the economic factors of your lifestyle that would impact on your individual comfort level of affordability. A mortgage outside your budgetary constraints can dramatically alter your overall living conditions. So, be sure to factor micro and macro economic concerns into your mortgage amount deliberations.
1 vote
Christopher…, Agent, Staten Island, NY
Fri Apr 27, 2012
Buying real estate is usually the biggest purchase most of us make in our lives. You can only decide for yourself if paying $2,000/month is within your means, and will allow you to maintain the standard of living you have or would like to have. One advice I would give to a first time home buyer looking at condos and communities is to decide what amenities are important to them or not. Living in a building/community with a swimming pool and tennis courts (for instance) is nice, but if you're not into either one of those, it will just cost you money in a form of higher common charges. Finally, for those having jitters about making a purchase: you are already paying a mortgage as a renter - it's just someone else's mortgage.
1 vote
Christopher…, Mortgage Broker Or Lender, Garden City, NY
Wed May 2, 2012
My Name is Chris Miceli and I am a Mortgage Loan Officer for PNC Bank.I have over 15 years of experience in Mortgage Financing. I live in the Staten Island area and would be more then happy to answer all of your questions. I can go over Mortgage Rates, Closing Costs, and Mortgage Payment. I would be more then happy to Qualify you for a mortgage. Please call me when you get a chance.
Phone (646)-623-2492
Email Christopher.Miceli@PNCmortgage.com
0 votes
Rita Colon-B…, Agent, staten island, NY
Sat Apr 28, 2012
You stated you located a property. Before placing an offer, I suggest strongly, that you receive price guidance from your realtor, if you have one.
The most important thing in purchasing a home in today's market is not to overpay.
If you are not comfortable with paying $2000.00 a month, then figure out what you are comfortable in paying. Mortgage officers do not factor lifestyle expenses when computing debt to income ratios for mortgage allowances.
You are newly married, so thinking long term, a two bedroom is a good investment decision and will allow you to stay longer in the event of an addition to your family.
Other considerations would be travel to and from work, storage, outdoor space & laundry facilities. These conveniences impact your everyday quality of life.
Consult with your accountant to see how taxes, interest, and MIP on FHA would be adjusted to your filing status, tax bracket and taxable income. This will give you a good figure on affordability.
It looks like you are looking at a condo in the $250,000 - $270,000 range, based on $2000 total monthly payment. You should consider overall costs and plan to stay at least five years or more.
I hope this is helpful. If you are not working with anyone we can go over a few more things based on your individual situation.
I can be reached at 917- 533-6234.
0 votes
Joyce Powers, Agent, Staten Island, NY
Fri Apr 27, 2012
I would suggest that you speak with a mortgage professional. Call me and I can give you contact information for a few that I really respect and find very helpful. You can reach me at 917-224-0202 or e-mail me at powersj910@aol.com
0 votes
Sean Michael…, Home Buyer, Staten Island, NY
Fri Apr 27, 2012
I am a first time home buyer, so I am not exactly sure what my opinion is, I have no personal frame of reference to base an opinion on. After giving my full finachial disclosure to a bank, they seem I beleive I can afford it. I was just looking for a more personal perspective on how much I should budget for, such as so and so percentage of my gross or possibly my net. Maybe I am just worrying too much. I appreciate all the help.
0 votes
Deborah Brac…, Agent, STATEN ISLAND, NY
Fri Apr 27, 2012
I assume you discussed your expenses, debts, income, savings etc. in detail with the loan officer and he gave you his professional opinion as to whether $2000 a month would be a comfortable range for you. However, compare your monthly rent and expenses and lifestyle now vs. the extra amount that would be going into the mortgage, would you, IN YOUR OPINION, be able to "swing" it and live as comfortably or would it seem like a hardship?
0 votes
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