Belmar, NJ · Member since 2015 · 19 posts · 3 votes
Happy New Year!
So I am starting a new job and looking to buy my first property. It is within the government sector and I will be starting at around 42k a year in NJ. Slow increases until I reach around 120k after about 10 years. I know I will not be making much money at first but I am looking at some great properties in my area. For example how much trouble would I have trying to get financing for a 350k - 400k house? It is a property with 3 separate units, I would be living in one. I would like to take advantage of the FHA loan if possible in my situation and have my father co sign for me. Does this price seem out of my reach?
Investor · San Francisco, CA · Member since 2016 · 314 posts · 153 votes
9y
Banks typically look for Debt to income ratios of 36% or less due to regulations about which loans can be resold. If it's a portfolio loan you can mess with that a bit. If it's for investment purposes and you have a different primary residence banks will count the income from the property towards the DTI calculation.
So, based on your 42k/year number, you can probably convince a bank to lend you up to somewhere around 240k in mortgage debt(a bit lower because they're going to count taxes and insurance in the DTI number), assuming you have no other debts.
Investor · San Francisco, CA · Member since 2016 · 314 posts · 153 votes
9y
Banks typically look for Debt to income ratios of 36% or less due to regulations about which loans can be resold. If it's a portfolio loan you can mess with that a bit. If it's for investment purposes and you have a different primary residence banks will count the income from the property towards the DTI calculation.
So, based on your 42k/year number, you can probably convince a bank to lend you up to somewhere around 240k in mortgage debt(a bit lower because they're going to count taxes and insurance in the DTI number), assuming you have no other debts.
Investor · San Francisco, CA · Member since 2016 · 314 posts · 153 votes
9y
That's where you'll have to talk to a loan officer for an answer. It will depend in your dad's income, debts, credit score, and the % you're putting down and the guidelines at the specific lending institution.
Banks are going to be most happy when one person can cover the entire cost within their ratios (it's still possible to do with combined income, but they're going to give you a rougher time of it)
Real Estate Investor · Philadelphia, PA · Member since 2016 · 45 posts · 16 votes
9y
@Kyle Pelech I think if you find the right lender they will go higher on the dti ratio. Also, in the multi unit they should let you count 75% of the income from the 2 units you are not living in. So you can qualify for more than if it were just a single family. Go talk to lenders only way to find out. Another thing is, has your income been steady before switching to this new job? If not they may want you to establish more work history.
Actually Joe this will only be my second full time job I am 22 years old. I worked for a company for 2 years and made $35,000 each year. Before that it was a lot of landscaping and construction. My credit is around 750.
Real Estate Investor · Philadelphia, PA · Member since 2016 · 45 posts · 16 votes
9y
@Kyle Pelech is it all documented w2 income? also how much credit do you have? one credit card, 2 cards, student loans auto loans? And how long is your credit history? All this stuff will make a difference.