Hello!

I would like to buy my first home/townhouse/condo, in Palm Beach County, FL. I do not have enough cash for downpayment. I make 34K a year and I have a very hard time finding a loan. There is almost imposible to find a home under 180,000 in this area ......but almost every bank tells me I don't make enough money for a 180,000 loan. (Ratio %) I do not have any car payments and I have no debt at all. My FICO score is 782. The only loan program working for me aparently, is 80/20 program (with Fidelity Trust or Quicken Loans). I know there are over one hundred program loans; Is 80/20 the best program for me? Is there any "bad side" to it? I would like to buy as soon as I can.... the home's value is going up so fast... I am affraid I will never be able to buy anything if I don't do it now
Thank you for reading my topic! :^)

Don't buy...Your last statement about never being able to afford again shows that you think real estate never cools off or goes down. And that is a huge error IMHO

$180,000 sounds like an awfully big sale price for someone with your income.

You have a great FICO score which should qualify you for the best interest rates so that is a positive.

Are there no, more modestly priced homes or condos a bit further out from where you're currently looking.

I believe you would be better served with a lower priced home initially and then trade up in a few years as hopefully your income increases.

The 80/20 program is designed for people who do not want to make a downpayment. There are two mortgages, one for 80% of purchase price, and another shorter term for the 20%, usually at a higher interest rate. I have customers who use these as a transional if they haven't sold their present home. When home sells, then they usually pay off the 20% part. This also eliminates PMI, or Mortgage insurance. Your totaly monthly house payment should be no more than 28% of your gross monthly income.

Thank you so much for your thoughts and ideas!
Mariana

I sent you an email Mariana

You might consider a Pay-option ARM or and Interest only loan. I would advise these ONLY if you will be making more money in the next 2-3 years. These programs will be a short-term solution only. I did email you and if you would like my help please let me know.

Kelly

Mariana... I agree with James Lee, $180,000 is a big stretch for your income if there is a lender who can make the numbers work. Your monthly payments with tax and insurance would be financially painful (atleast to me it would be)

Have you thought of partnering with a friend or family member and buying a home together?

Go for it! You can always get a roomate, you won't always have the opportunity to buy.

get one that is pre construction, that way in the 8 months you have equity built, and if things git rough sell! The most you could lose is the initial down payment, $2000 normally.

I think that a $34,000 income is not enough to purchase a $180,000 home, ecspecially when you incorporate the fact that you are buying with zero down (80/20). Your debt to income is to high, and if the Florida homes prices do pull back just a little bit, you will owe more than the house is worth. I would suggest you wait, until one, you save up some cash for a downpayment, two, your income grows, or three, the market pulls back a bit and stabalizes... then you may be able to pick up a bargain home such as a foreclosure, repo, fixer etc. Don't let your first home purchase become a nightmare.

Don't buy in your current state of mind. You are showing signs of being a "panic buyer"...and that's dangerous.

Hold off a bit and shoot for putting 20% down on a home...that's about 36K and you can save up that amount in about 3 years if you earn about 12K per year by taking on an additional part-time job working about 20 hours per week for about $11/hour...that's just about the equivalent of working two and a half 8 hour shifts on weekends. You can earn the 36K faster if you work more hours during the week, obviously.

Mariana,
I would not recommend doing this unless you have some sort of back up plan. Most likely, all the loan programs you are being offered are some type of no doc loan. Why, because your income CANNOT support the mortgage payment.

By back up plan, I mean be prepared to get a roommate, ask mom and dad for help before you become late on a payment, and be prepared for a total change in your lifestyle (mac and cheese for dinner, etc).

I would recommend you stay away from any loan that has negative amortization, such as the Option ARM. That can pretty much shut down any chance of refinance with any gain in equity. Also, many of the monthly payments quoted to you will not include taxes and insurance (much less any condo fee). Be sure to find out if there is a prepayment penalty and avoid loan programs with this feature.

I have been doing mortgage loans for over 20 years and I am not trolling this site for business. Unless you have additional resources (roommate, family money) you have not disclosed here, you should not be making this purchase.

Good Luck!

Don't do it. Don't listen to mortgage people who say "you can always get a roomate".

Life finds a way...

usually no-doc wants 5 percent down you would probably have to do a stated loan which is no problem with your score.Certain parts of florida are overinflated and others are just starting to appreciate rapidly.Talk to an agent that knows your market,don't buy on emotion or fear that everybody is getting rich while you lose your opportunity,instead look at the facts,age of house,appreciation rates for the sub.or area,land use plan on economic development for schools,houses,businesses etc.Is this going to be a place to live that is in high demand in the next couple of years?Renting is just throwing money away,saving up 36,000 in three years really doesn't mean anything because how much will it cost to buy a home in 3 years?.With appreciation you still might not be able to afford it then.Figure out if you can get family or set up a renter there,can you make the payment of about 1,550 a month?It is all about calculated risk people fear what they do not understand.people take risk everyday some succeed and others fail but it's all part of life.What looks risky to one person might be a sound decision for the other person who has crunched the numbers,calculated the risks and made the decision they are most comfortable with.It's your call.


not giving legal advice

It sounds like you are only looking online for help (Quicken Loans). Go see an experienced, highly reputable, local Loan officer of a Mortgage Brokerage and get thier advice. Give them your entire financial picture, see what you pre-qualify for and what loan programs & rates he/she can offer. Then go get two more opinions. Ask them all to show you how much they charge and explain all the fees. Educate yourself as much as possible before deciding anything and be sure to consult with another professional (Financial or Tax Advisor) about how to manage your home and debt acquisition. Get everything in writing, get references if you can.

I am 29, building my second home without family money or help, and it will be my third home purchase. If I had listened to the naysayers I would still be renting and have zero equity. But I did get badly taken advantage of my first time around and I can't stress enough - get rate and program quotes, and find out the fees charged! Also, with your score... if anyone offers you a loan with a pre-payment penalty, do not work with them.

Good Luck!