Can i afford this house ?

My Financial situation:
Hi there, I am in confused state, should i buy a house or not.
I am my wife are making around 110K per annum before the taxes. We have total app. 20,000 in education loan and Car loan. We are paying 1100 + Electricity for the current one bedroom apartment. I am thinking to buy a house around $365000.00. I can put 35,000 at max towards down payment and closing cost.We have excellent credit history.

What do you think, can i afford this house ?

I bought my first house when I was 18. It is the best investment that I ever made.

Now is the best time to buy a house. There is a huge glut of property on the market.

This is true all over the United States.

This is a buyer's market.

A rule of thumb that I use that worked for me is that the price of the house should not be more than 3 times my annual income.

You are a little over that but not much.

Also, the seller is probably unrealistically high.

You can probably get that house for less.

What I recommend is that you hire a real estate appraiser and an attorney who specializes in real estate to help you.

Have the attorney write your offers NOT A REALTOR OR A REAL ESTATE AGENT. REALTORS and real estate agents are not competent to protect your interests.

ONLY ATTORNEYS ARE COMPETENT TO PROTECT YOUR INTERESTS.

Have your attorney include language in your offer that makes it contingent on the house appraising for at least as much as your offer.

Also specify in your offer that the seller is to pay all of the closing costs. That will help your cash position.

The language must also specify that the appraisal by your real estate appraiser, not the lender's appraiser will be used to determine the true fair market value of the property for the purposes of your contract.

I recommend that your appraiser be a Member of The Appraisal Institute.

Explain to your appraiser that you are hiring him to protect you from paying too much for the property.

Also, if your appraiser is a Member of The Appraisal Institute your lender will probably accept his appraisal.

Lenders recognize that appraisers who are Members of The Appraisal Institute are better trained and better qualified than their own appraisers.

If the lender insists on using their own appraiser, make certain that the lender's appraiser receives a copy of your appraisal before he writes his report.

That way the appraised value of your lender's appraiser will not be significantly higher than the appraised value reached by your appraiser.

Otherwise your lender's appraiser will often be significantly higher than your appraiser.

When the appraised value is determined to be less than your offer, I recommend that you give the seller two choices. The seller can either agree to reduce the contract price to the appraised value or agree to cancel the contract and direct the title company to return your deposit to you.

You may have to cancel a few contracts before you close escrow, however when you do finally close escrow on a house you will know that you are paying the true fair market value and not any more than that.

Note:
I guarantee that you will never be able to buy a house for less than fair market value.

On those rare occasions where you do see a house on the market at an asking price below fair market value you have a bidding war with multiple offers that pushes the sale price back up to fair market value.

When real estate agents say they are selling a property below market, what they are really saying is that the market has declined from what it was a few months ago and they recognize that they must reduce their asking price or not sell the property.
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With respect to lenders, I recommend that you use your credit union at work if you have one. If you do not have a credit union the next best source is the lender where you have your checkng and savings accounts.

In short you can afford this house and if you will follow the procedures that I have outlined above you will also avoid paying too much for the house.

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Based on your income, you can afford (110,000/12)*32%=$2,933 a month for a total housing payment.

2933 - (300 taxes) - (60 insurance) - (90 PMI) = 2,483 for your loan. Which would give you a total loan amount of $414,000. So yes, you qualify.

On a $365,000 house with 10% down your total payment would be $2,424 based on a 30 year rate of 6%.

I say go for it.

I'm surprised no one suggested the following: Since you are considering more than doubling your current pymt - Start doing that. Add an extra $1,100 EACH month to your (pretend) mortgage to a savings account. Do that for six months running w/ NO exemptions and that will tell you what kind of mortgage you can afford.

You really should not buy a home until you can put a full 20% down, and have already completely paid off all your other debt....cars/credit cards/student loans.

Why get into a house and be "house poor." With making a $100K+...you should be on easy street in no time.

Principal and interest would be approx $2022/mo and the debt to income ratios are o.k. from what you have said. If you are comfortable adding that extra monthly payment. You can afford that house. Just do not get to tight on your budget. You never know what can happen one of you could be out of work for a while.

Your monthly payments should only be a little over $2,500 or so. You should be fine, but I would suggest paying off the education loans as soon as you can.

http://realestate.yahoo.com/calculators/payment.html;_ylt=AtKbpgPF9aD_sfbaln_m_O2kF7kF?_submit=yes&loanAmount=365000&termMonths=360&amortization=1&interestRate=6.318&showAmort=Calculate

Can you afford it? A mortgage broker will tell you yes. The answer is no. With your income and the downpayment you describe you are looking at $1500-1800 per month including principal, interest, taxes and insurance. I do not know your exact income tax rate or deductions so I can't get closer than the numbers I've given you. I'm basing this on $5500-6000 per month take home.

With $35,000 to put down, which is very good by the way, I would point you towards a $175,000 house. You would probably be in a $1400 month situation and would find that home ownership wasn't such a burden. Regardless, you really want to avoid PMI and $35,000 will give you 20% down on a $175,000 home. The other rule of thumb is that your mortgage only be 25% of your monthly take home pay.

I found an affordability calculator for you. Based on your income, I assumed $600/month in debts, 10% down, here are the results:
$346,771
$2,567
Maximum House Price
Monthly Payment

Loan Amount:
Down Payment:
Closing Costs:
$321,414
$25,358 (7.3%)
$9,642
Principal Interest:
Taxes:
Hazard Insurance:
Private Mortgage Insurance: $1,927
$361
$144
$134

I think $365 is beyond your means. Do you mean you only have $1100 + util to spend?? If so, you are looking at buying a house around $200K. You need to factor in property tax (usually 1%) and homeowner's assoc (if applicable) plus mortgage insurance (if you can't put down 20%), property insurance.

You are asking the WRONG question and looking at this WRONG. The question should NOT be "CAN I afford this" but should be "What is the BEST INVESTMENT I can make with the money I spend on keeping a roof over our heads?"
SInce you stated that you and your wife make 110K a year and are spending $1100 a month USING POST-TAX INCOME TO pay for it; that money is doing NOTHING to increase your net worth. Buying A house would be a better choice of HOW you spend your current income.
So yes, you SHOULD buy a house but now you have to ask, WHICH house, what neighborhood, what size, what design, what school district, what price range, what is the local crime rate, and lots more????
You seem to be looking at the purchase of a house like it was a pair of shoes or a new car. "What is the nicest I can AFFORD, what will be friends think of it? How will it make me LOOK? ALL of these are the wrong viewpoint. Look at it from an INVESTMENT standpoint. What amount of money can you put down to purchase an investment that will go up over time and how will that investment affect our taxs?
As a married couple; you can claim a TAX FREE gain of 500K on the sale of a primary resedence that you lived in 2 out of the last 5 years. Use this "tax loophole" to pinpoint what house you buy, live in for 2 to 4 years and then sell; creating a 500K tax free gain. DO NOT BUY the biggest or highest priced house you THINK you can afford!!!! Buy the house that will make you the most money!

No. Your mortgage will be astronomical. You are getting in over your head. Buy something smaller. Living hand to mouth puts a lot of strain on a marriage.

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