Purchasing a house on 50k salary?

Hello, I was wondering what kinda housing I could buy making 50k a year. I have a 50k down payment and make about 3500 per month. I have no kids and my car is payed for. How difficult would it be to keep up on payments with a 225k house? Living in Montana. I don't want any apartment/town home answer. I am just simply wondering how this would play out. IF I did end up purchasing I would not want to move for a very long time. Thank you for your input!

Update:

BTW I have NO debts! College is payed for and I'm a smart spender with the card If this helps.

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  • 8 years ago
    Favorite Answer

    You will not get approved to buy that house, unless they will sell it to you for more like 180k

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  • Audy
    Lv 6
    3 years ago

    For Credit and finance solutions I always recommend this site where you can find all the solutions. http://creditandfinancesolutions.info/index.html?s...

    RE :Purchasing a house on 50k salary?

    Hello, I was wondering what kinda housing I could buy making 50k a year. I have a 50k down payment and make about 3500 per month. I have no kids and my car is payed for. How difficult would it be to keep up on payments with a 225k house? Living in Montana. I don't want any apartment/town home answer. I am just simply wondering how this would play out. IF I did end up purchasing I would not want to move for a very long time. Thank you for your input!

    Update: BTW I have NO debts! College is payed for and I'm a smart spender with the card If this helps.

    1 following 7 answers

    Source(s): For Credit and finance solutions I always recommend this site where you can find all the solutions. http://creditandfinancesolutions.info/index.html?s...
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  • 8 years ago

    $225k less your $50k deposit means you will finance $175k. I recently did a deal financing $180k at 3.375% for 15 years and the monthly payment (for the buyer) is slightly more than $1,500 per month. So if you could get a deal like this, it would seem you might be able to afford the payments with your $3,500 monthly income. You would have about $1,900 to live on the rest of the month. This would have to include utilities, cable, internet service, food, savings (since you wiped it out with your down payment), charitible contributions, vacations, retirement fund, food, auto expenses, entertainment, furnishings, medical, and home repairs.

    Another option might be a 30 year mortgage, your monthly payment might drop to around $900, but now you have to pay another 15 years on the debt. But you expect not to move for a long time (everybody expects not to move, and then things happen).

    The other part of the equation (and certainly not the sole justification for homeownership) is the mortgage interest credit. This could lower you tax bill.

    Be careful on this. Purchasing a home has long term consequences that could be very good or very bad.

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  • Bob
    Lv 6
    8 years ago

    With a loan of $175K at 3.875% and estimating 2% of your purchase price for annual real estate taxes your total house payment (PITI) would be about $1282. That would put your debt to income ratio at under 31% of your gross monthly income which is well within lending guidelines. Standard FHA underwriting guidelines for debt ratios are 31% for housing and 43% for total debt, though I have seen higher ratios approved many times. That payment would be affordable for most people at your income and debt level. If you have enough additional cash to cover your closing costs or negotiate for the seller to pay them you should be OK.

    Source(s): Licensed Loan Officer in Ohio
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  • 8 years ago

    Buying a house is a step by step process, this is the first step you should take in order to purchase a house. The rest of the steps will fall in place, no matter the type of property you are purchasing.

    In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, you can find one in your local telephone book.

    Make sure this mortgage broker or mortgage banker is able to do government loans such as USDA, FHA and VA loans if you qualify for one. With a VA mortgage loan you are not required to have a down payment, this will save you on closing cost.

    He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.

    The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.

    When you speak with the mortgage broker you will need the following documents to complete the loan application, there will be others, but this will get you started.

    #1 One month of pay stubs for each person that will be on the mortgage.

    #2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.

    #3 Two years of federal income tax along with the W-2 that match.

    Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.

    Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.

    Now make sure before you get your pre-approval you and your mortgage broker go over all your options as to the mortgage programs you qualify for, the interest rate, monthly payments.

    If you are getting a FHA, fixed rate, two loans to eliminate PMI like an 80/20 or one loan, if you are qualified for and approved for a 100% loan.

    You should select the loan that best suit your financial condition at the time. That could be an adjustable rate loan. It could be a fixed rate loan for 5 or 10 years and then adjust. Some adjustable rate mortgages only adjust once.

    Make sure your mortgage broker explain all your options so you may make an intelligent decision.

    What might be good for one person might not be good for you, in other words just because your friends and all your real estate buddies are telling you about the great fixed rate they got, your financial situation might call for something else.

    So select the best option for you and your financial situation.

    You should also get a Good Faith Estimate (GFE) which will indicate the cost you will have to pay for getting this loan. It will also indicate the amount of your down payment.

    Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.

    Your mortgage broker will now order an appraisal to show proof of the property value.

    The mortgage broker might ask for additional information or documentation, don't get all up tight this is normal, just supply the information or find the documents needed.

    After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.

    Before signing any loan docs make sure they say exactly what you and your mortgage broker went over when you decided on what mortgage program was best for you.

    I hope this has been of some benefit to you, good luck

    "FIGHT ON"

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  • 8 years ago

    Rule of Thumb:

    You can afford to spend 2 to 2.5 times annual income on housing, NOT more than 3 times with all utilities

    SAVE, save, save for down payment! You've got a good start, but need more for that price range.

    The MORE you put down, the LESS you pay (tens of thousands of $$) in interest over the life of the loan. . . .Putting down 20% means you avoid substantial extra costs of PMI and improves your chances of loan approval. . . .

    Overextending themselves is MOST common problem of first time buyers and can result in foreclosure, short sales, financial problems, bankruptcy

    Source(s): real estate investor
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  • Anonymous
    3 years ago

    50k Income Mortgage

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  • Anonymous
    4 years ago

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  • 3 years ago

    it depends...

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