Buying a house..How much of a loan, how much house?

posted 3 years ago in Home
Post # 3
Member
1303 posts
Bumble bee
  • Wedding: January 2012

Birdee106 Each state is different, I live in Southern California, our house was listed for $254,000 we bought it for $247,000 it was built in 2001 and is 3453 square feet….it’s a lot of house, and well worth the money….but I also live about 1.5 hours outside of Los Angeles area…if I were to have bought this house in Los Angeles county it would have been 4x the price or in the pricey area of Orange County (think Disneyland)….so yes were lucky with our house purchase price, but when it comes to home buying there are so many factors that affect the cost: location, renovations or lack thereof, short sale, mello roos, etc.

I would suggest you get a realtor first and then go over your options…

 

Good Luck!

Post # 4
Member
10384 posts
Sugar Beekeeper
  • Wedding: September 2010

There is no way for us to answer that without knowing where you want to buy (even neighborhood to neighborhood is a huge expense). We bought a 2 bedroom place with 20% down last fall (prices have escalated a lot since) for $476,000 with a $380,000 loan.

Here, a 1,000 sq ft 2 bedroom home starts at $500,000. And that’s not even in San Fran proper.$200,000 in the rural midwest should get a pretty nice house.

How does he know he would be qualified for a $200k loan? Was he actually preapproved with all the paperwork, credit score pull etc? If it’s just an online calculator telling him that, he should talk to an actual bank. Several, in fact – definitely shop around. How much you put down, have in savings reserves, your credit score, employment history, etc all play into that.

Post # 5
Member
2244 posts
Buzzing bee

We bought a 2,000 sq ft home for just under $160,000. We put 10% down and have a loan of about $143,000. 

I’d be wary of buying a house that is at the max of what you can qualify for. We qualified for well over $200,000 but wanted to have a comfortable mortgage and didn’t want to be house poor.

Post # 7
Member
1312 posts
Bumble bee
  • Wedding: March 2015

Depends, how much down payment can you guys afford?  The $200k doesn’t include down payment.  If you are in Kansas, it will get you something.  Where I live, that’s not even a 1 bdroom apartment.

Post # 8
Member
10384 posts
Sugar Beekeeper
  • Wedding: September 2010

@Birdee106:  Well, the loan amount is tied to the price of the house (unless you just pay cash instead of financing), so the loan amounts will be more in more expensive areas. I guess I don’t understand your question then?

In a lot of areas, there are first time home buyer classes run by the city. It’s a very complicated and expensive process with a lot of pitfalls (and people who are profiting off of you without your best interest at heart – like your real estate agent, seller’s agent, loan officers and brokers, etc). I’d either do that or spend the next week reading absolutely everything you can get your hands on!

Post # 9
Member
2627 posts
Sugar bee
  • Wedding: November 1999

What kind of downpayment does that loan require?

Typically conventional loans require a 20% down to lock in a certain rate. OTher types of loans will allow you to have a lesser down payment (like veterans and FHA)  This means you will need a % of the total cost of house in cash to put towards the house. Plus closing costs, which can vary depending on the broker/agent.

So if you need a 20% downpayment you wont need to pay PMI. if you have less than that you likely will.

Here is a calculator to help estimate what your monthly payment will be.

http://www.mortgagecalculator.org/

This will help you estimate closing costs.

http://www.zillow.com/mortgage/calculator/closing-costs-calculator.htm

How much cash do you have? 

If you have 40,000 to put down, that means you can afford a 200,000 house. 180,000 in loan + 40,000 in downpayment.  

You will need at closing, in cash, the 40,000 downpayment, plus 5-10K in closing costs. This will change by several thousand based on the terms of your loan.

  • Will you be paying points?  
  • date of closing and how many month(s) full or prorated will you need to pay mortgage
  • Actual service fees
  • Title cost/insurance
  • housing Insurance prepayment terms
  • cost of escrow services
  • inspections needed (home, pest, radon, pool etc)

Good luck!

 

Post # 10
Member
3570 posts
Sugar bee
  • Wedding: September 2011

The loan is for the total price of the house, minus your downpayment.  So if you were putting 5% down, you could spend 210K on a house.  10K downpayment, 200K loan.  Then you have to come up with closing costs on your own. 

Post # 11
Member
672 posts
Busy bee
  • Wedding: November 2012

@Birdee106:  There are more cost associated with buying a house then just the amount you are approved for and depending on the loan you get approved for you cant always roll in things like your downpayment or closing costs.  We just bought a house this past week, closing costs were roughly $14,000 plus the down payment and our loan was for $280,000 and we put down $70,000 (20% so we didnt have to pay private mortgage insurance).  Closing costs include prepaid taxes, insurance, state/city taxes, pay back for propane/oil in tank, lawyer fees, and I know there are some other things I just cant think of it right now.

also like PP said, just because you are preapproved doesnt mean you will get it or want to actually spend that much.  we were approved for $480K and knew if we got a house for that much we would be house poor and not have a life outside of our house so we got something we loved for a price we could afford.

Post # 12
Member
2973 posts
Sugar bee
  • Wedding: May 2014

@Birdee106:  We bought a house that matched our pre-approved loan amount. So if our bank approved us for $200K, we looked for houses with a max price of $200K. 

Qualified real estate agents & bankers will explain everything you need to know. 

Post # 13
Member
8426 posts
Bumble Beekeeper
  • Wedding: April 2013

@Leonard2B:  +1, we were approved for way more than we could actually afford comfortably.

Post # 14
Member
926 posts
Busy bee
  • Wedding: September 2013

We were approved for a loan of $450,000, which we totally laughed at, banks are stupid.  We paid $227,000 for our house last year and it’s just the right price for what we can afford.  We put down 5%, first time home buyers on a conventional 30-year fixed mortgage.  I’ve always heard the rule of thumb is your mortgage should be around 25% of your total household income; we are exactly at that.  Our mortgage also includes an escrow account.

Post # 15
Member
13168 posts
Honey Beekeeper
  • Wedding: July 2010

I’m kind of confused by your question ….

You loan amount will be as follows: [home cost] – [down payment] = [loan amount].

Obviusly there are other costs to buy a home like closing costs and repair of anything during inspection that the sellers don’t cover.  But the loan amount relative to the cost of the house is simply based on how much of a down payment you make.

Post # 16
Member
1710 posts
Bumble bee
  • Wedding: March 2013

We were approved for $310,000.

 

 

 

We are building a new construction home and are paying $246,500 for it (2884 s/f 5 bed, 3 bath, 3 car garage), with $25000 down. The builder is paying for most of our closing costs for going with their mortgage company. This is a 30 year conventionl loan.

 

 

 

Keep in mind that interest rates are starting to rise again. We never locked in our quoted rate (3.625%) because we weren’t given a closing date. We were finally given a closing date yesterday, and interest rate is 4.625%. Which brings our payment up almost $85 per month. Crazy.

 

 

 

Our monthly payment will be $1530 and our income before taxes is $6900 per month. We didn’t want to go over $1400, but it is what it is.

 

ETA: Our payment is Principal, taxes, insurance, PMI

 

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