Post # 1
My SO and I are in the process of looking at houses. We are getting pre-approved at some point this week. On Tuesday we will be looking at a bunch of houses between the 230k and 280k price range. We are looking in the suburbs outside of Philadelphia. These prices are normal for a home that has 1.5 to 2 baths, 3 beds, is probably not renovated, and between 1300-2000 sq ft.
My SO makes about 65k a year before taxes (5,400/mo) has no debt what-so-ever, and 30k in the bank. We are planning for 20k to be a downpayment, closing costs etc. His credit score is around the 800 range.
The catch is that I might make 38k this year because I’ll be working as an RN part time but I dont have very much work history and only 1 pay stub from this job. Before this I jumped around a lot with jobs so I don’t look good on that front either. Even my taxes are screwy from all the job changing and education and blah, blah, blah. My credit score is 710 and I have a personal loan and the payment is about $100/mo. I have no student loans either and no savings.
Based on all this, will I even be able to be on the mortgage? If I’m not will my SO alone get approved for our 250k (roughly) budget?
And lastly, do we need an appointment to be preapproved? We are going with Wells Fargo I believe at SO’s request.
And yes my fellow bees, I know none of you can give me an exact answer. I’m just looking for some opinions because I’m a spaz. I’m so worried that I’ll fall in love with a home that we can’t afood without my income assuming they won’t cant me because my income and taxes are a spastic mystery before October 2012?
I have considered an apartment for a year but we really don’t want to pay towards nothing! Thanks in advance bees! I’m sorry this is so long.
Post # 3
We were approved for $120,000 based on my (former) salary of $31,000 a year. My score was high 700s. So, doing the math you can see they approved us for about 4x my salary.
The houses you are looking at are right in that range. So I think you defnitely have a shot! We worked with a local savings and loan, where the account holders “own” the bank, so it’s a little bit like a credit union. I don’t know if that made it easier for us or not.
Our situation was my husband made most of the money but had none of the credit (he pays cash for EVERYthing) I had great credit, but obviously not much income. We didn’t use his credit at all, for that reason. The loan just went through me.
ETA: He is definitely on the deed to the house though! The deed and the loan are two different things. Supposedly this makes it riskier for me if we divorce (I have 100% of the loan responsibility but I would only get 50% of the house). I’m not worried, divorce is against our religion 🙂 And anyway I just got a new job and I can now afford it on my own. Just so you know, you can definitley be on the deed to the house, even if you aren’t on the loan.
Post # 4
@Magdalena: That is helpful! I’m actually a part of a credit union and originally wanted to get approved with them but then I found out I’ll get a discounted mortgage rate because of the hospital I work with.
Post # 5
My Fiance and I just recently purchased a home (our first), and we were approved for $185k on his salary alone ($46k, I don’t work). Our credit was decent but not stellar (just over 700). We went through Wells Fargo, and it was fairly simple. We spoke to a loan officer and had to fill out some forms, but over all it wasn’t too bad. If there is anything that you need to work on (credit score, debt, etc), the loan officer will let you know. Good luck!
Post # 6
You typically get approved something like 3 times your household income (more or less based on other debt, credit). But, the real thing to consider, is whether or not you actually can afford what you’re approved for. Spending 1/3 or even 30% of your income on housing puts most people in a tight situation for the rest of their budget. I know we didn’t spend anywhere near what we were approved for on a house.
Post # 7
My 1st lender (I went with someone else because of problems with the realtor & the fact they did this)… approved me for a home that would have been 75% of my income, that’s without taxes, insurance, etc & they tried to get me to look at those types of houses. I have NO IDEA why they did that & glad I went with someone else because I would’ve lost my house had I done that :(. My 2nd lender & realtor talked to me & told me the amount of house I could realistically afford. Also they said that’s why a lot of people lose their houses, they get approved for much more than they can realistically afford.
Idk how much you’ll get approved for. I do know someone who both the husband & wife applied & one of them missed a single credit card payment & so only one of them is on the mortgage but BOTH of them are on the house title. I would say you can both apply together & if it doesn’t work, than they can take you off & then you can always refinance or add yourself on later down the road.
Post # 8
1. You should get pre-approved at multiple banks. The big lenders, BoA, Wells Fargo, etc are among the most expensive and have high application fees.
2. Your employment history is going to be a big issue, as is your credit score. You will likely disqualify him from getting the lowest rates, and your lack of stable income history will be a red flag.
3. We found that big banks wanted an appointment. The lender we are going through (Everbank) was phone/online only. Much more convenient.
4. You should likely save up more of a down payment before trying to buy. Don’t forget that you also have closing costs to worry about, AND you have to show reserve funds to cover 6 months worth of payment, AND you’ll need earnest monry up front (3% of offer price here), AND whatever shows up on the inspection that has to be fixed right away that you can’t negotiate with the seller. Also expect to pay $100-150/month in private mortgage insurance for putting less than 20% down, plus you’ll pay more in interest for putting that little down.
Interest rates aren’t going anywhere for the next year. Wait a little, save more money. You won’t be able to fix your work history in that time, but you could work on your credit score.