If it’s Boston you’re still in range to do FHA. If you’re not in that metro you’re likely too much @ 350-400k.
Tbh @ 350-400k (with 5k already saved up), you need another 15-20ish saved up on the low end. And 68k a year isn’t all that much relative to that mortgage payment (~2900 a month mortgage payment alone vs your ~4250/month net). You’d be house poor with those wages and house value.
Assuming you can both line up jobs in said city you’re looking at 8500 net so it’s more reasonable, but that’s still not near the comfort zone since you’ll be in a high cost of living area anyways
With no kids or major write offs (first time homebuyer doesn’t do much) that’s ~100k net. So just north of 8k a month.
At 2000 a month for rent, which you can take probably take 500 a month off for home expenses, water, etc, you have about a $1500 difference in renting vs buying, along with the lower stress of renting.
So you absolutely CAN buy a house with your pay and prices assuming you can save another 15-20k to be able to close. But the difference in price is $1500 a month all in (which depending on the age of the home, could be significantly more).
That 1500 a month in savings that you suddenly have is an extra 18000 a year. It’ll take ~3 years of mortgage payments to create that much principle in your home.
Will it get a jump start on your life? (if all your shit is in order) Sure. Can be it be done, with all the numbers you’ve provided? Absolutely (even if the roof is getting older or whatever). But the price difference alone equates to 18000 a year. Is having a home with added maintenance and all of the fixins worth 18000 a year to you?
So what would the mortgage be on. 350k-400k house with 5% down? I can save the 5% that won’t be too hard. You think it will really equate to $1500 over rent? The rent in the area is stupid expensive. A decent 800 sq foot apartment is north of $1500 in a giant complex.
It would shake out to ~2900 for the mortgage. Then add water that most apartments normally cover (leave it out if that’s not normal in your area).
Then you’d want to add a reasonable number for the standard upkeep costs of a house (add more depending on the age of the roof, major appliances, etc).
If rent is 1500 a month the difference is actually greater. I said 1500 more under the assumption of 2000/month rent.
I haven’t come across a lender who wants to put an unmarried couple on a loan together. I could buy a house with a friend easier than I could a girlfriend. Lenders aren’t stupid, they know what a mess that can be.
But yes, if you find a lender who wants to put both names on the loan, of course both incomes are considered.
it’s doubtful he’ll live in the house long enough to make it to the 20% mark in the first place. Also something to consider.
Wait what? Earlier you said this:
I took that to mean that your salary would double from 68 to 140ish after the first year. Did you actually mean doubling your salary just gets you to the 68 mark?
Why would a lender care, though? If she signs her name on the mortgage she’s on the hook for it too. Same as if your dad co-signed the loan.
@pfury probably knows because I think he used to work in the industry (right?), but I thought if you were on the loan you also had to be on the title? I might have that reversed.
*OP, I would NOT under any circumstance put your girlfriend on the title.
The mortgage company I just spent 2 years working at has no problem doing it. And we would regularly sell loans to chase, Wells Fargo, and bank of America, none of which had a problem with it either.
68k would be about double from what I’m making now. Sorry for the confusion. Like I said, I’ve been working a shit job since I graduated while trying to start my career. Interviewed like 100x at different places. 68k starting that goes up every year and after 5 years base pay is right around 6 figs. The line of work I am going in to also has unlimited over time, shift differential, etc
You said a cop right? I’m not sure too many cops are making $100K a year. I think it dangerous to plan on what you can buy for money you don’t have yet and aren’t guaranteed.
out of curiosity, are you wanting to have kids in the next few years, assuming you end up marrying your gf? Definitely a huge consideration as well when budgeting for a house.
Grain of salt. This isn’t a guarantee. When a levy doesn’t pass, economy takes a dip, etcetc you can’t rely on things like pay raises and unlimited overtime.
Objectively, with your pay (assuming 140/yr gross @ 400k house) I would put you on the low end of the 'high risk for foreclosure’s crowd. Your loan would have been one of the ones I suggested get sold so it’s not on our books.
I do NOT, for one second, think you will regret renting at this time. People underestimate the time and money investment. And given home values haven’t crashed in forever, you could very easily save 15-20% by banking your cash and waiting for the next housing dip