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Portrait of a Young Man as The Artist
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From: (Anonymous) Date: April 8th, 2008 12:02 am (UTC) (Link)

Did you say 20% down?

If you did, and I read that correctly, that gives you a TON of wiggle room. I'd go to your bank first, tell them what you want to do, and see if they will waive most of the closing costs on a loan to you. With 20% down, you won't be paying PMI. And if they ask you to? Go Elsewhere.

You make decent money, I'm assuming you have a credit score of at least 650, right? You may also qualify for an FHA loan, which can offer lower interest.

Figuring 6% interest, when you say that you are looking for a total payment of $1500, you are looking at a 30 year loan of roughly $180K. This will include escrow (The loan is $1080/month).

The rule of thumb used to be that you could afford a house worth three times your total income for the year. If you make 50K a year, you can afford a loan of $150K etc.

It is great that you are looking so early in the process! I'd advise one more thing: Work on getting the financing at least 3 months before you are ready to drop the cash and pay for the house. The paperwork for a home loan right now is insane and they will try to break your soul before they let you sign a loan.
52 comments or Leave a comment