will i be able to get a loan?
hello,
this is my first post, and i'm trying to learn as much as i can, but here is my situation: i currently live in chicago where i work part time and rent an apartment. my total bills are around $800 a month ($400 for rent plus utilities, $100 for phone/internet, $150 for health/car insurance, and $150 in student loans), i have about $1200 net income per month, i have no credit card debt, and a paid off vehicle. i do have other miscellaneous expenses every month of course, such as gasoline, groceries, and dining out, but i'm pretty thrifty overall. i am planning on finding full-time work in the near future so my income should increase by at least 50% as a conservative estimate.
i do not want to purchase a house in chicago, yet i want to live and work here for the time being. i am interested in purchasing a single-family home in ohio where i am from and where i have family and friends. the idea is to have the property to fix up or update as necessary and then rent out to a friend or friends, and maybe eventually move into it in the future if the job market in ohio recovers.
many homes i have been looking at are in the $40k range. i have about $25k in the bank, so here's what i'm thinking: get a mortgage loan for the $40k, and put about 20% down. that will leave me with about $17k in the bank and should give me a manageable monthly mortgage payment. i know i will also have homeowner's insurance, taxes, and utitlities to pay, but i think i can manage if i get someone into the house and renting it within a year or so.
now, is it even possible to get a $40k loan these days? is my relatively low income a problem? what of my expenses are included in the debt-income ratio many lenders look at (i believe my credit is in excellent shape)? would the $25k i have in the bank and a 20% down payment be enough to convince a lender that i am a trustworthy borrower even with relatively low income? how would you proceed with this investment/purchase?
thanks for your help and advice!