Hey Everyone! My Fiancé and I are looking to purchase our first house shortly after our wedding in June of next year. We are pretty confused as to everything that goes into buying a first home, and what we can afford. We both have fairly extensive student loan debts with a total of around $220,000. Below I will list what I think are all the main elements that are relevant to buying a house.
My Info: Annual income ~$80,000 My Credit Score: ~680
Fiancé Info: Annual Income : $60,000 Fiancé Credit Score: ~740
Down payment : $15,000
Debts:
Monthly Student Loan Payment: $2000 + $500 extra
Monthly Car Payments: $600
Total Monthly Payments: $3100
From my understanding this puts my pre-mortgage DTI at ~27%
What are we likely to be approved for?
Most of the houses we are looking into are within the $275,000 - $375,000 range. Are these feasible?
Rental Property Investor · Edmond, OK · Member since 2017 · 1k+ posts · 1k+ votes
7y
I would go ahead and set up a meeting with a few lenders in your area. June will be here before you know it and you definitely don't want any surprises in this department.
A good lender will be able to help guide you through the process. They can evaluate your current situation and help you navigate anything that could help/hurt your financing approval over the next few months.
Philadelphia, PA · Member since 2015 · 55 posts · 3 votes
7y
I will bite...if you can go conventional loan, the max dti will cap at 50%...
off 140k combined annual income, roughly 2692.30/week or 10,769.23/month...
using 10,769.23 monthly, I would guess the sum of all your debts cannot exceed 5300/monthly (and some change)...
if you already are at 3100, I would guess you have 1900 available monthly for debt service on your house...
the lender will use the lower borrow's middle score. best to get credit scores as high as possible to get the best rate. the best rate will shave some dollars off your interest and a couple dollars can really make or break DTI if the lender is using a computer to underwrite..
but at 15k for a downpayment, on the homes you are talking, you will def have PMI (which sucks)...im not sure what PMI is...
but 15k down on a 300k loan, leaves 285k note...you may be able to pay that note and be within the 1900/month criteria, but when you factor in property taxes, insurance, PMI, and interest, you may exceed the 1900 and won't get approved.
@Aaron Hollenbach If you're looking for a quick number, it's fairly easy to get one from site's like Rocket Mortgage. I wouldn't necessarily choose them in the end (you can probably do better with a local lender) but that will give you an rough idea taking all of your income/expenses/debt into account.