Hello I was just wondering how much house can I afford with 20k annual income?

Asked by Standard545, Pennsauken, NJ Sun Dec 8, 2013

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Mary Petti, Agent, Edison, NJ
Mon Dec 9, 2013
I echo Debbies reply. Once you get out of school, you will be making more. In the meanwhile, try to SAVE SAVE SAVE as much as you can so by the time you graduate and get your degree, you will have a substantial amount of money socked away for a house and all the other expenses that come with home ownership.

i know it's tough, but it is doable if you set buying a home as another goal !!!

Good luck !!!
1 vote
Hi Mary! Hope all is well with you - have a wonderful holiday season!
Flag Mon Dec 9, 2013
Debra (Debbi…, Agent, Livingston, NJ
Mon Dec 9, 2013
Hi again!

So, you're in nursing school?
What a great profession!
I wish you much success.

Now that we have more information - here's what I think.............

Study hard and get that nursing degree - you will be making much more than $20,000 when you get your first job. That's the good news.
You will also be in a much stronger position to buy a home then.
Also, you might want to wait until then to buy,, as perhaps you will wind up working in a different town, so you will want to buy closer to your full time job.

It's all good, and you seem to have a bright future!

Best wishes with your new career!
Have a happy holiday season!
1 vote
Standard545, Agent, Pennsauken, NJ
Mon Dec 9, 2013
Thanks for all the great answers.
I was also thinking about a several programs such as habitat for humanity and affordable housing program. I may just wait until I finish nursing school to purchase a house. I tried applying for a second pt job but its hard
1 vote
Mary Petti, Agent, Edison, NJ
Mon Dec 9, 2013
Standard,

I really want to say you can't afford much if anything at all. Debbie Rose is correct in that there is much more than your annual income involved.

You will need a minimum of 3.5% of purchase price for down payment IF you qualify for an FHA loan, which is one of the lowest down payment requirement out there.

You will need about $350-$450 for a home inspection

You willl need approximately $6000-$8000 for additional closing costs. (which you may be able to have the seller finance BUT that increases the total cost of the home to you)

Based on you salary before taxes, you earn about $1666/month. A $150,000 purchase with 3.5% down at 4% interest for 30 years and about $7000/year property taxes (average amount in NJ) and $800/year in insurance the payment is about $1340/month.

Of course you may have a lot of money to use as a down payment, but your credit score, and existing outstanding debt will also play a factor in a mortgage approval.
1 vote
Debra (Debbi…, Agent, Livingston, NJ
Sun Dec 8, 2013
Well, there's more that goes into answering this question than simply your income, although an income of $20,000 will limit the amount you can borrow.

But....the following questions still need to be answered:

What is your debt (total, including any student, car or credit card loans)?
What are your credit scores? Is your credit "good" or questionable.?
How much do you have as a down payment?

If you have debt, low credit scores (in the 500's or low 600's) and little, or nothing, for a down payment, I would say buying a home at this time isn't possible.

Speak to a local mortgage rep to get a definitive answer. Once he or she has the facts, they can better guide you.

Another thing to take into consideration, is........what are the price ranges in your area......speak to a local agent for the answer to that.

Best wishes.........
1 vote
Debra (Debbi…, Agent, Livingston, NJ
Mon Dec 9, 2013
Standard - do you have any savings - over and above what you'd use to put down as a deposit?

If not, on your salary, I am afraid you will be caught really short, even if you find a way to buy a home (and are able to find a home in the 80,000 or under range, as more than that doesn't seem feasible)............you have to factor in costs beyond the mortgage payment and utilities, tv and other basic needs - home ownership has a lot of expenses you don't realize upfront, and unless you're prepared for that and have a cushion, with savings, (broken furnace, leaking roof, etc), you could wind up in a financial hole.

It's one thing to be "pre-approved" on paper for what a bank might loan you........it's quite another thing to be able to make those payments and have a life without financial stress.

New Jersey is not known for its bargain priced homes...or taxes.
I know in some states you could buy something for under $50,000, for example, and that might work for you, but NJ isn't an easy place to buy a home on a limited income.

I applaud you for having established good credit, and your desire to own a home, but I think you need to work on increasing your income (a second job perhaps) and paying off those student loans before buying a home.

Best wishes.........
0 votes
Standard545, Agent, Pennsauken, NJ
Mon Dec 9, 2013
Oh that's is a lot $1300 for a morygage.
When I checked with a lender. I got pre-qualify for only a 80k home. That was with good credit and my income. All i have is student loans with 1 credit card. With FHA I would put down $2500.if I found a 90k home I would have to put down 10k for closing clost.
0 votes
Jason Walter, Agent, Sacramento, CA
Sun Dec 8, 2013
Call any local mortgage lender/broker and they would be happy to assist you.
0 votes
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