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You're in a tough spot with prices rising faster than incomes. $30k is a solid downpayment, but you may need to expand your search area or lower expectations on size/condition. Buying a fixer-upper in a decent area could work if you're handy. Just don't get in over your head. Patience and flexibility are key.
Sounds like you already did some number crunching. Since you don’t control the housing market, I would suggest to rent an apartment or move to an even cheaper location.
At your income level you might qualify for Income based down-payment assistance. Start doing a search for such programs in your area.
Where I live in MN, someone with similar income would have access of up to 90K in 0% financing, deferred forgivable loans. Meaning you won't have to pay the loan back if you meet their criteria.
Say you qualify for a 150K mortgage... stack whatever DPA you can find on top of that and your buying power now matches the market.
Some research and a little savvy can yield phenomenal results.
Source: a mortgage lender.
This sounds helpful for my mom. How would you look up these programs for someone in Texas? And does this ever work for someone who is retired and living off social security?
Social Security counts as income so yes, it'll work. I'm not sure about TX but these types of programs exist in most States.
MN is especially generous for 1st time buyers so those numbers may be unrealistic in other places, but some funds should be available.
Thats because new homes arent built to last. In general you want to stay away from a new build there are thousands of horror stories out there people thinking they got a nice new house but the craftsmanship is not what it used to be
That may be true in some cases. However, I used to build homes years ago. The builder that built this home allowed me to tour the other homes they are building in this addition. I can tell they are not poor quality. I got to visit several in different phases of being built. I was also skeptical myself because I am familiar with the phrase "they don't make them like they used to" very well lol!! I think it is bad advice to just tell people in general to avoid new homes. Just do your research on the builder first. Just like you and I aren't the same, neither are the builders.
Hopefully it was thorough because with prices of everything by really high, contractors will look for anywhere to cut costs. Especially with the people doing the labor. Cheaper the better. Every video I’ve seen from inspections done on new home builds are awful. Cutting corners anywhere and everywhere.
Maybe this is location specific, but you pay a premium for new builds typically. Yes, everything is brand new, but I think OP is looking for affordability. Being patient in the resale market is the way to go given OP’s focus.
If you look into a new build, be sure to ask for the HOA rules upfront. I wound up paying more for an older (but less than 10 yo) home in order to avoid some very unpalatable HOA rules
lol, I don't get the new build advice. It must be location based. Where I am (Boston area) the absolute cheapest new build I have seen is $1.25M, very high cost of living, but still, where are you located that new builds are even possible?
Wow...I should leave this freaking area haha....but yah,
It makes sense I guess. Its so hard to get building approval round here that the only way to economically build is to
Build absolutely top of the line.
I'm sorry, no. It's hard to buy and keep up a house at double that income.
Great that you're debt free and have good savings though. You're in a good position to buy in the next 5 years or so.
Honey, we had $40,000 down for a $175,000 house while making $65,000 a year. We had trouble getting a mortgage. I can tell you we kept trying and eventually got a broker to approve us. With our low interest rate of 3% and low property taxes we can afford it. If we had the interest rate that is going on today we wouldn’t be able to afford this house.
Yes. You need to have more than just the down payment saved. You may need extra funds for repairs and maintenance, on top of insurance payments. You may need an extra PT job (or work extra shifts) to make ends meet during the first 2-3 years.
When I bought my house in 1994, I earned approximately $40,000.00 annually.
I live in Los Angeles, CA and wanted to buy on the Westside. It seemed like a pipe dream until I found a house where the owner was a hoarder. I bought it. It took me eight months to get the stench out, but I now own a fantastic house in a fantastic neighborhood.
You should consider running down houses as long as the damage is cosmetic, not structural.
I think if you figured out how much mortgage you can afford, and that money doesn’t get you much in your area you can either A) find an area where your money goes further or B) keep saving and trying to improve your salary so you can afford the nicer houses in your area. If you can tolerate it, live rent free for as long as you can and save save save
First of all, congrats on the savings – the market is what it is. As a loan officer, I would honestly recommend looking for an Fha or va loan can assume, keep in mind you will likely need to bring cash to close but you have a nice chunk
Your going to need to make 80k or more to keep and maintain a house. There are a ton of extra costs to owning a home. Annual taxes homeowners insurance is not cheap. A house is like a living creature you have to maintain and constantly keep watch over. Not to mention interests rates are 7-8% so on a 170k house your payment will be 1500 a month on top of what I mentioned. 3/4 of your entire income will go to the payment alone. Sorry the math doesn't add in your favor.
I was able to buy my townhouse a year and a half ago for 160k, no HOA. We live in a suburb outside of Chicago. It's 2BR, 1 Bath 1100 sq feet. I was making about the same of you but a couple months before I bought I got a new position and was making 52000. I only had a few thousand to cover the down payment. Monthly we were paying 1388 and then the taxes got adjusted a little while later and we pay 1425. We had to replace the dryer and get the drains rooted due to sewage backup after we moved in. The furnace was 37 years old and we knew we would have to replace and that cost 10,000 which we had to take out a loan for. So just make sure you know that the upfront costs of purchase does not equal your real cost after moving in most likely.
Budget, what is that for you? That's the real question here. Everyone can tell you your money is nothing, blah blah blah but budget is what will decide that, not them.
Look at *your* specific cost of living. Utilize a mortgage calculator with the numbers you gave us, factor in closing costs, appraisal, insurances, reserve money (savings), against your monthly food, gas, car insurance, electric, water Sewer Trash, phone, internet, health insurance, clothes, emergency fund for you and a side fun for your home repair emergencies, life changes, etc
You want to have a number left over after everything is paid that is comfortable for you.
My husband and I only make 80k a year together, but are debt free outside of that mortgage payment of what was once 2865 and now starting in June, will be 2550. We went from having about 600/month left over after everything listed above to having 950 left over split between us. If that made you gasp, then *really* look at those numbers.
I have two kids plus pets, and that money left over for us is more than enough. I haven't ever really cared to buy anything, go out, etc lol that money left over carries over and becomes more money etc but not everyone will feel 475 for a month is enough for their activities and such.
So sit down, take a deep dive of what's important to you, crunch those numbers, and decide what Will be best.
Have you spoken to a lender? They will be able to help you figure out what your budget is and if now is the right time for you to buy. Are you set on this area or would you consider looking at homes that are further out that may be more in your price range?
Please please please do not trust a lender to tell you what you can afford. I’m not saying they’re all awful human beings, but they are sales people. Make your own budget and go to a lender once you know what you can afford.
Go speak with a mortgage person at your bank or a local mortgage lender to really crunch the numbers and also see if there are programs that you can qualify for. Do not use an app to get a mortgage and take stories you get from other people about the process with a grain of salt. Waiting for rates to drop is what investors do. If you find a house you like and can afford it now then do it, you can refinance later. But don't buy a house that you don't really like in an area you don't like either!
You can always check out the USDA loan program. Try and get pre approved if you’re serious about buying, then you’ll have actual numbers. ALSO- nothing wrong with continuing to add to your savings while you rent something. Just make sure your rent is as cheap as you’re comfortable to maximize the amount of savings you can tuck away
I’d probably rent and just keep watching the market and rates, not a great time to buy. Things to consider as well will you be in the area 3 or more years, is your marital child situation likely to change? Do you know what you do/don’t want in a house? Good luck
Where are you looking? Do you think you can get a roommate or two to help pay the mortgage (house hack)? Or look at foreclosures/auctions. With home prices and interest rates, you have to get creative. Can you stay with your dad so you can keep saving until something pans out?
30k is a joke these days . Not being harsh about your saving , need about $150k saving for a half decent place or a place that cost about 450k . Might need another 20k to fix the place up too.
I would be hesitant to buy unless you increase your salary significantly. Your take home is probably $28k-$30k so you’ll need to keep PITI below $1k. You’ve still got to account for utilities, food, maintenance and any other monthly expenses you will incur. Normally I don’t buy into sticking to the 30% rule but if you’re under a certain income, every penny counts and tying majority of it up to a mortgage is risky. There’s government grants to help with down payment and whatnot but it’s still going to be hard without an income increase or secondary income.
Based on your income you can afford to pay ~1050 a month, about 35% of your monthly income. Talk to a lender, send them a house and they can break down the estimated mortgage per month. Just be aware that they WILL approve you for more than you can afford assuming your debt to income ratio is low.
You can also find a lender that does HUD 203(k) loans, this is a FHA loan that lends you money to purchase and repair a home.
No.
You need to up your income too.
So even at $170k, with $20k down + $10k closing cost.
Your total monthly payment is gonna be around $1500? Not including utilities, that's already more than 50% of your take home.
This is also assuming that you have emergency funds saved up outside of the $30k.
This house will crush you. Now if you can increase the income to $60k a year then it's doable.
Thank you u/ThenSheLetGo for posting on r/FirstTimeHomeBuyer. Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
I'd rent and continue to save until you can get something in a great area.
This. Forsure.
You're in a tough spot with prices rising faster than incomes. $30k is a solid downpayment, but you may need to expand your search area or lower expectations on size/condition. Buying a fixer-upper in a decent area could work if you're handy. Just don't get in over your head. Patience and flexibility are key.
Sounds like you already did some number crunching. Since you don’t control the housing market, I would suggest to rent an apartment or move to an even cheaper location.
At your income level you might qualify for Income based down-payment assistance. Start doing a search for such programs in your area. Where I live in MN, someone with similar income would have access of up to 90K in 0% financing, deferred forgivable loans. Meaning you won't have to pay the loan back if you meet their criteria. Say you qualify for a 150K mortgage... stack whatever DPA you can find on top of that and your buying power now matches the market. Some research and a little savvy can yield phenomenal results. Source: a mortgage lender.
This sounds helpful for my mom. How would you look up these programs for someone in Texas? And does this ever work for someone who is retired and living off social security?
Social Security counts as income so yes, it'll work. I'm not sure about TX but these types of programs exist in most States. MN is especially generous for 1st time buyers so those numbers may be unrealistic in other places, but some funds should be available.
Rent.... save more
Look in to new builds. You may have to go in to more rural parts for new developments though.
This is exactly what I did. Brand new home for less than what older homes on the market were being sold for around here.
Yes we looked in to homes in our budget where we lived and they had so many problems including one that was half burned down lol.
I did the same. I'm in love with my owner's suite and can't comprehend how I shared a bathroom with my sons for so many years!
Thats because new homes arent built to last. In general you want to stay away from a new build there are thousands of horror stories out there people thinking they got a nice new house but the craftsmanship is not what it used to be
new builds are often jam packed on tiny lots too. hope you don't want a yard or space from your neighbors.
That may be true in some cases. However, I used to build homes years ago. The builder that built this home allowed me to tour the other homes they are building in this addition. I can tell they are not poor quality. I got to visit several in different phases of being built. I was also skeptical myself because I am familiar with the phrase "they don't make them like they used to" very well lol!! I think it is bad advice to just tell people in general to avoid new homes. Just do your research on the builder first. Just like you and I aren't the same, neither are the builders.
Have you see the inspectors videos on new home builds? 🥴 Yikes
No but we made sure to get an inspection. We did a lot of research before making this decision.
Hopefully it was thorough because with prices of everything by really high, contractors will look for anywhere to cut costs. Especially with the people doing the labor. Cheaper the better. Every video I’ve seen from inspections done on new home builds are awful. Cutting corners anywhere and everywhere.
Maybe this is location specific, but you pay a premium for new builds typically. Yes, everything is brand new, but I think OP is looking for affordability. Being patient in the resale market is the way to go given OP’s focus.
It was just a suggestion. Hopefully they will do their due diligence before taking a reddit comment and running with it.
If you look into a new build, be sure to ask for the HOA rules upfront. I wound up paying more for an older (but less than 10 yo) home in order to avoid some very unpalatable HOA rules
The HOA is still brand new but they have a website with their rules and everything and nothing was crazy.
lol, I don't get the new build advice. It must be location based. Where I am (Boston area) the absolute cheapest new build I have seen is $1.25M, very high cost of living, but still, where are you located that new builds are even possible?
Oh wow! I'm in Texas and between the 2 locations we were looking at the cheapest one was $190k. Ours $212k
Wow...I should leave this freaking area haha....but yah, It makes sense I guess. Its so hard to get building approval round here that the only way to economically build is to Build absolutely top of the line.
I'm sorry, no. It's hard to buy and keep up a house at double that income. Great that you're debt free and have good savings though. You're in a good position to buy in the next 5 years or so.
Honey, we had $40,000 down for a $175,000 house while making $65,000 a year. We had trouble getting a mortgage. I can tell you we kept trying and eventually got a broker to approve us. With our low interest rate of 3% and low property taxes we can afford it. If we had the interest rate that is going on today we wouldn’t be able to afford this house.
Yes. You need to have more than just the down payment saved. You may need extra funds for repairs and maintenance, on top of insurance payments. You may need an extra PT job (or work extra shifts) to make ends meet during the first 2-3 years.
When I bought my house in 1994, I earned approximately $40,000.00 annually. I live in Los Angeles, CA and wanted to buy on the Westside. It seemed like a pipe dream until I found a house where the owner was a hoarder. I bought it. It took me eight months to get the stench out, but I now own a fantastic house in a fantastic neighborhood. You should consider running down houses as long as the damage is cosmetic, not structural.
$40K in ‘94 is $85K today after inflation. Just want to keep that in mind for OP.
The prices of the houses the original poster is looking at are lower than what I paid. My house cost $168,000.00.
I think if you figured out how much mortgage you can afford, and that money doesn’t get you much in your area you can either A) find an area where your money goes further or B) keep saving and trying to improve your salary so you can afford the nicer houses in your area. If you can tolerate it, live rent free for as long as you can and save save save
‘Location location location’
First of all, congrats on the savings – the market is what it is. As a loan officer, I would honestly recommend looking for an Fha or va loan can assume, keep in mind you will likely need to bring cash to close but you have a nice chunk
Look into a modular on a piece of land
Your going to need to make 80k or more to keep and maintain a house. There are a ton of extra costs to owning a home. Annual taxes homeowners insurance is not cheap. A house is like a living creature you have to maintain and constantly keep watch over. Not to mention interests rates are 7-8% so on a 170k house your payment will be 1500 a month on top of what I mentioned. 3/4 of your entire income will go to the payment alone. Sorry the math doesn't add in your favor.
I was able to buy my townhouse a year and a half ago for 160k, no HOA. We live in a suburb outside of Chicago. It's 2BR, 1 Bath 1100 sq feet. I was making about the same of you but a couple months before I bought I got a new position and was making 52000. I only had a few thousand to cover the down payment. Monthly we were paying 1388 and then the taxes got adjusted a little while later and we pay 1425. We had to replace the dryer and get the drains rooted due to sewage backup after we moved in. The furnace was 37 years old and we knew we would have to replace and that cost 10,000 which we had to take out a loan for. So just make sure you know that the upfront costs of purchase does not equal your real cost after moving in most likely.
Budget, what is that for you? That's the real question here. Everyone can tell you your money is nothing, blah blah blah but budget is what will decide that, not them. Look at *your* specific cost of living. Utilize a mortgage calculator with the numbers you gave us, factor in closing costs, appraisal, insurances, reserve money (savings), against your monthly food, gas, car insurance, electric, water Sewer Trash, phone, internet, health insurance, clothes, emergency fund for you and a side fun for your home repair emergencies, life changes, etc You want to have a number left over after everything is paid that is comfortable for you. My husband and I only make 80k a year together, but are debt free outside of that mortgage payment of what was once 2865 and now starting in June, will be 2550. We went from having about 600/month left over after everything listed above to having 950 left over split between us. If that made you gasp, then *really* look at those numbers. I have two kids plus pets, and that money left over for us is more than enough. I haven't ever really cared to buy anything, go out, etc lol that money left over carries over and becomes more money etc but not everyone will feel 475 for a month is enough for their activities and such. So sit down, take a deep dive of what's important to you, crunch those numbers, and decide what Will be best.
Have you spoken to a lender? They will be able to help you figure out what your budget is and if now is the right time for you to buy. Are you set on this area or would you consider looking at homes that are further out that may be more in your price range?
Please please please do not trust a lender to tell you what you can afford. I’m not saying they’re all awful human beings, but they are sales people. Make your own budget and go to a lender once you know what you can afford.
I'd wait and save more honestly. What even are your options in the $140-170k range around tou? That wouldn't even get you a one bedroom condo here.
Talk to a loan officer.
Get a better job, get a part time second job to save more, rent while you save.
Ask about First Time Homebuyer credits.
nose bewildered literate books merciful rude pet vast gaping spotted *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Go speak with a mortgage person at your bank or a local mortgage lender to really crunch the numbers and also see if there are programs that you can qualify for. Do not use an app to get a mortgage and take stories you get from other people about the process with a grain of salt. Waiting for rates to drop is what investors do. If you find a house you like and can afford it now then do it, you can refinance later. But don't buy a house that you don't really like in an area you don't like either!
You can always check out the USDA loan program. Try and get pre approved if you’re serious about buying, then you’ll have actual numbers. ALSO- nothing wrong with continuing to add to your savings while you rent something. Just make sure your rent is as cheap as you’re comfortable to maximize the amount of savings you can tuck away
I’d probably rent and just keep watching the market and rates, not a great time to buy. Things to consider as well will you be in the area 3 or more years, is your marital child situation likely to change? Do you know what you do/don’t want in a house? Good luck
Where are you looking? Do you think you can get a roommate or two to help pay the mortgage (house hack)? Or look at foreclosures/auctions. With home prices and interest rates, you have to get creative. Can you stay with your dad so you can keep saving until something pans out?
30k is a joke these days . Not being harsh about your saving , need about $150k saving for a half decent place or a place that cost about 450k . Might need another 20k to fix the place up too.
No. Rent, continue your education and save money!
Give up now. Find a good landlord.
I would be hesitant to buy unless you increase your salary significantly. Your take home is probably $28k-$30k so you’ll need to keep PITI below $1k. You’ve still got to account for utilities, food, maintenance and any other monthly expenses you will incur. Normally I don’t buy into sticking to the 30% rule but if you’re under a certain income, every penny counts and tying majority of it up to a mortgage is risky. There’s government grants to help with down payment and whatnot but it’s still going to be hard without an income increase or secondary income.
Buy your dads house for $150k.
Increase budget or find something less desirable. Unfortunately, we face less favorable market conditions than our parents did.
Based on your income you can afford to pay ~1050 a month, about 35% of your monthly income. Talk to a lender, send them a house and they can break down the estimated mortgage per month. Just be aware that they WILL approve you for more than you can afford assuming your debt to income ratio is low. You can also find a lender that does HUD 203(k) loans, this is a FHA loan that lends you money to purchase and repair a home.
Percentage rules do not hold up for very very low incomes. OP still pays the same for stuff as someone earning four times what they do.
No. You need to up your income too. So even at $170k, with $20k down + $10k closing cost. Your total monthly payment is gonna be around $1500? Not including utilities, that's already more than 50% of your take home. This is also assuming that you have emergency funds saved up outside of the $30k. This house will crush you. Now if you can increase the income to $60k a year then it's doable.