Can we afford to buy a condo?

Question

My fiancee and I are thinking of buying a condo. I $2100 a month and he makes $1800 right now. He will be getting more as the accounts come in so estimate maybe $2700 by the time we are looking to buy (Sept-Dec). I have some money to put down. Possibly 30,000. I am looking at a $235,000 condo. Taxes around 3800 a year. Can we afford this?

Answer 1

http://cgi.money.cnn.com/tools/houseaffo...

Try this calculator.  Based on only your income (no other expenses included in calculations)...you can afford up to $185,000 (current income) or $217,000 (estimated income).  I'm sure you probably have other expenses, like car payments, credit cards, student loans, etc., and these all need to be factored in to your budget to ensure you could purchase this home.  With all the foreclosures going on, you want to be sure you can REALLY afford it, and have money in savings for emergencies.

Answer 2

they are very expensive to buy

Answer 3

If you can get a could interest rate I believe yall could comfortably afford it.

Answer 4

No.   A rule of thumb is 3x your annual income.  Yours is  currently $46,800 for a cap of about $140,000.  The 3x rule is somewhat conservative but still an excellent starting point.   There are several affordability calculators on the web.  I suggest you search for one and doublecheck my conclusions.  They are more detailed and you can perform "what if" scenarios on them.

Answer 5

the general rule of thumb is that your mortgage should be no more than 2.5 times your annual salary.  putting money down will make you a much more attractive buyer since it will assure the bank that you won't walk away from the loan, so it is good you have money.  however, if the salaries you listed are before taxes, then once your fiance makes more money, you two together will be pulling in around 5K a month, which is only about 60K a year before taxes.  that means you should be sticking to a mortgage of around 150K.  that place might be a bit out of your price range, especially considering you can't count on an increased income until it actually happens...  good luck - it's a buyer's market right now, so hopefully you can find something!

Answer 6

Add up all the monthly payments on your credit reports, add the monthly mortgage, interest, mortgage insurance, home owners insurance and real estate tax amount.  Now divide that figure by your GROSS monthly income, not your net.

If this figure is about 45% or less, you're probably ok.

EXCEPT if your fiance is self-employed (you say accounts...insurance agent or something like that...any job where he doesn't get a W2 at tax time), he'll have to be in the business for at least 2 years, and they might average his earnings over those 2 years.

Answer 7

Bluntly put....no.  Your income is only $40,000 a year.  On a $200,000 mortgage, based on a rate of say 6.75%, JUST your principal and interest payment is $1945.80.  That is close to half of your income and that isn't even including taxes and insurance.

Your mortgage amount should NEVER exceed 2 times your gross annual income.  AT MOST it should be 2.5 times your gross annual income but that is wayyyyyy stretching it.  Best case, your house payment (taxes, insurance, principal, interest) should not exceed about 30% of your before tax income.