Mortgage and Low-Income

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OffTheGrid
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Mortgage and Low-Income

Post by OffTheGrid » Fri Jun 16, 2017 1:07 pm

I've been reading through a lot of threads lately about buying homes, but haven't yet seen anything for people who are buying with very limited funds/incomes.

Our family is considering moving out of state for a job; the area is comparable to where we live now, property taxes are low and both states have no income tax. The last few years only my husband has worked (in livestock) making under $30k a year and $5+ per year from rental (farm) income, without benefits but with housing; I have only done freelance jobs; mostly I take care of our one toddler. We are considerably secure financially for our income level and keep a strict monthly budget. No debt, excellent credit (770+), currently able to max-out yearly Roth contributions and have some additional investments in total stocks and bonds, and we have a comfortable savings account/EF.

If we move for this job (mine), I will be making a regular $45k with full benefits. I already work remotely for this employer, and I will likely continue to accumulate freelance projects on the side in addition to this income. My husband may not have a job immediately, but I am confident we will end up making at least $60k per year. As a financially conservative person I'd rather plan on just $50k per year (this is my income plus average yearly earnings share from a family farm).

Most mortgage calculators tell us we can afford a 15-year mortgage for a home priced at $180k-$200k. This is assuming we pay 20% down. I didn't mention above, but my husband has a weird, single-premium whole life plan (gifted to him when he was born) that we can access NOW. It has a $41k surrender value right now we can take advantage of. (We'd get term life once we liquidated this.)

The plan right now is to use that money for a downpayment, so we wouldn't have to touch very much of our savings. We want to buy something small, but with a few acres or more and in a rural community -- because we have horses and its relevant to my husband's job/lifestyle we want.

* Does a $180k mortgage sound too high? Is there a mortgage-calculator-of-choice on this forum?

* Is our plan to liquidate a single premium WLI to fund a 20% down payment good? Should we pay 20%? I know so many people in our income bracket who put hardly a thing down on their homes, or they just estimate they will end up earning more per month, and it just seems really irresponsible to me. Maybe I'm wrong and they're doing it because its the only way to afford a home with this level of income.

* Are there good resources online for people with low incomes who want to buy homes (instead of rent) out there? We really, really do not want to rent.

Of course, we may not move at all :P ... but the option is on the table and I want to plan for it.

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Meg77
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Re: Mortgage and Low-Income

Post by Meg77 » Fri Jun 16, 2017 1:16 pm

First thing first - cash out that whole life plan NOW. It's a nice gift to get, but it's a terrible product in general. Put that money in savings if you have no other debts to be set aside for your future home, wherever that may be.

Unfortunately though, I don't think you'll be able to qualify for a mortgage for a year or two after you move. As a mortgage banker, we have to verify "income consistency," and that means that wages earned in a new job usually don't count until they have been earned for 1-2 years. There are exceptions - for example if you have a long term employment contract have moved immediately from a similar job in the same industry. So if you've been making good money from this employer already and this looks more like a raise, it *might* be able to count. But if you're going from effectively unemployed to employed, your wages won't be able to be used for at least a year to support the mortgage, at least with most traditional lenders. And your husband will be quitting his job so his income won't count either, even if he gets a new job (unless that new job is in the same industry, in which case his income WILL be able to be used most likely).

Some credit unions and lenders who don't sell their mortgages may be able to underwrite your loan anyway, so it's possible you could get SOME type of mortgage. But it will probably be at slightly higher rates. If you can put down 20%, that will save you a lot of money in interest and in closing costs as well as eliminate the need for Private Mortgage insurance. It's definitely the way to go.

My advice even if you COULD qualify for a mortgage though would be to move and rent for at least a year. See if you like the job, the area, and working full time. See if your husband gets a job and how much he makes - and where it's located. See what neighborhood suits you best. There is no rush! You need to know how much your husband will be making anyway before establishing a permanent budget - the biggest portion of which will be housing costs.

And PS - $180K sounds WAY too high at this stage. If and when your joint income is over $60K and appears stable, then $180K is the top end of what I'd recommend (a rule of thumb is 3x your income for a mortgage, but with a lower income you should really aim for 2x your income so you have enough leftover to live a little and save).
"An investment in knowledge pays the best interest." - Benjamin Franklin

Gufomel
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Re: Mortgage and Low-Income

Post by Gufomel » Fri Jun 16, 2017 1:33 pm

I don't know the details of the whole life plan. But in general they're junk, so if you can get $41k out of it and use it for a down payment, that sounds excellent.

You mentioned getting a property valued at $180-200k and putting 20% down, but then mentioned a $180k mortgage. If you get a property at the high end of your range ($200k) and put down 20% ($40k or essentially your whole life value), your mortgage would be $160k.

As far as mortgage calculators, I usually use http://www.mortgagecalculator.org/. Maybe there's better ones, but this one works for me.

As you mentioned, you seem to be in a good financial position considering your income. With that said, a $160k mortgage seems to be too much. Especially a 15 year mortgage would be tight. A 15 year $160k mortgage at 3.25% interest rate, with 1% property taxes (I don't know what the property tax rate will be in your area), and $1000/yr homeowners insurance, your monthly payment excluding utilities and maintenance/repairs would be $1,374.27. Same facts as above, except a 30 year mortgage at 4% interest rate would be a $1,013.86 monthly payment.

The 15 year mortgage would be 33% of your monthly gross income if you're assuming $50k annual income, or 27% of your monthly gross income if you're assuming $60k annual income. Both of those are on the high side for sure. The 30 year mortgage would be 24% of your monthly gross income if you're assuming $50k annual income, or 20% of your monthly gross income if you're assuming $60k annual income. Certainly more reasonable from a % of monthly income perspective, just recognizing that you're paying a fairly significant amount more in interest for the life of the loan. But in your situation I would certainly be concerned about locking myself into a ~$1400 monthly payment if going with the 15 year. It doesn't leave much wiggle room.

Good luck.

GAAP
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Re: Mortgage and Low-Income

Post by GAAP » Fri Jun 16, 2017 2:30 pm

My personal approach is to stress test the income and limit my total housing expenditures (mortgage, insurance, taxes, utilities, repairs) to 25% of the stressed income limit. By "stress test", I mean eliminate any unreliable/irregular income from consideration -- in your case at this time, that probably means $45K total income, leading to an annual total housing cost of $11,250. This is A LOT more conservative than most folks, let alone most mortgage providers.

Most mortgage calculators that offer to compute what you can afford are offered on sites with a financial incentive to get you a mortgage -- they are NOT unbiased. Do your own calculation, paying particular attention to what might go wrong. I suggest looking at some of the credit counseling sites to see what they recommend for housing cost levels -- I'll bet on a significant difference from the sites hosting those mortgage calculators...

When you do run the numbers, round up the interest rate beyond the high end currently available -- that will give you some slack in case things change in the interim.

As for mortgage term, when you don't have a lot of budget slack liquidity flexibility is critical. I suggest budgeting for the 15-year mortgage, and getting the 30-year mortgage. Bank some/all of the difference and use the rest to pay down the mortgage if you choose. You will have expenses that you don't currently plan for, and the existence of that debt makes an emergency fund even more critical.

20% down is a good idea -- it will probably save you 1% in PMI and may get you a better rate on the mortgage. Both of those should help you pay down the mortgage faster, if you desire.

Your credit rating is remarkably good (even for a lot of people with much higher incomes) -- don't mess it up.

--

OffTheGrid
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Re: Mortgage and Low-Income

Post by OffTheGrid » Fri Jun 16, 2017 3:18 pm

Meg77 wrote:As a mortgage banker, we have to verify "income consistency," and that means that wages earned in a new job usually don't count until they have been earned for 1-2 years. There are exceptions - for example if you have a long term employment contract have moved immediately from a similar job in the same industry. So if you've been making good money from this employer already and this looks more like a raise, it *might* be able to count. But if you're going from effectively unemployed to employed, your wages won't be able to be used for at least a year to support the mortgage, at least with most traditional lenders. And your husband will be quitting his job so his income won't count either, even if he gets a new job (unless that new job is in the same industry, in which case his income WILL be able to be used most likely).
I had no idea that you couldn't count wages from a new job. It is technically a "raise" I'd be getting, I'm doing the same job for the same company (I'm just taking on more work because I'd be going into the office 3-4 times per week), but I've only been working for them since the beginning of the year so it isn't established income. Ideally, my husband will be getting a job in the same industry he is in now -- hopefully this would allow us to secure some kind of mortgage if we can secure something before making the move.

There is a slight possibly we would actually be able to stay in a company apartment after relocating -- I say slight because it was suggested to me that its something they might be able to do, but it is typically only offered to senior-level hires (which I am not, but they are apparently having a very difficult time finding good employees locally). I'm not going to rely on that as an option right now.
Gufomel wrote:You mentioned getting a property valued at $180-200k and putting 20% down, but then mentioned a $180k mortgage. If you get a property at the high end of your range ($200k) and put down 20% ($40k or essentially your whole life value), your mortgage would be $160k.
Sorry, mistyped -- $160k is indeed what I meant! Or $140k.
Gufomel wrote:The 30 year mortgage would be 24% of your monthly gross income if you're assuming $50k annual income, or 20% of your monthly gross income if you're assuming $60k annual income. Certainly more reasonable from a % of monthly income perspective, just recognizing that you're paying a fairly significant amount more in interest for the life of the loan. But in your situation I would certainly be concerned about locking myself into a ~$1400 monthly payment if going with the 15 year. It doesn't leave much wiggle room.
We hadn't considered a 30-year just because of the idea we'd pay so much more in the end with interest, but perhaps it is something we just need to accept right now. It is hard to think about that and the possibly of renting (in my mind = just losing money) because they are not the best-case financial choice... but having a lower-income means not being able to make the perfect choice, doesn't it?

The WLI is getting cashed out within the year. We've been wanting to do that, I just like having a plan in place for what we'll do with the money.

I'm starting to realize it seems like lots of people make irresponsible (well, less conservative) choices with loans...

seity
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Re: Mortgage and Low-Income

Post by seity » Fri Jun 16, 2017 3:42 pm

I would look to rent in the area at first in order to get to know the area better and also what your income will really be. Then run the numbers as others have mentioned.
I bought a 140k house on a 40k income using an FHA loan. Rent is insane here, so a 30 year mortgage even with the high taxes costs me less per month than renting a 1 bedroom apartment. Money was super tight for many years until my income increased, but I don't regret buying the house. Been living here 13 years now.

Carefreeap
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Re: Mortgage and Low-Income

Post by Carefreeap » Fri Jun 16, 2017 6:13 pm

seity wrote:I would look to rent in the area at first in order to get to know the area better and also what your income will really be. Then run the numbers as others have mentioned.
I bought a 140k house on a 40k income using an FHA loan. Rent is insane here, so a 30 year mortgage even with the high taxes costs me less per month than renting a 1 bedroom apartment. Money was super tight for many years until my income increased, but I don't regret buying the house. Been living here 13 years now.
The FHA loan may be a good product for your situation because they are more forgiving on the housing ratio. What kind of work were you doing before your current employer? Was it similar? If so you might be eligible to count that in your job history. FHA loans tend to be more expensive than conventional loans but it may be worth it in your situation.

Also don't forget that even if you take a 30 year loan you can pre-pay it on a 15 year schedule without penalty if you want to save interest

Nate79
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Re: Mortgage and Low-Income

Post by Nate79 » Fri Jun 16, 2017 8:09 pm

Get term insurance before, not after cashing out the WL.

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Watty
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Re: Mortgage and Low-Income

Post by Watty » Fri Jun 16, 2017 8:44 pm

seity wrote:I would look to rent in the area at first in order to get to know the area better and also what your income will really be. Then run the numbers as others have mentioned.
+1

Even if you had the money to pay cash for a house it would still be good to rent for six months or a year to make sure that you really want to live there and the new position is working out and your husband is able to find a like you expect. That will also give you time to learn the area and local housing market. Until your husband has gotten his new job you will not know what his commute will be like and you might end up with one on the wrong side of town for his job.

There are all sorts of ways that the move might not not work out the way that you are hoping and not having a house right away could make things easier if you need to try something else.

Unexpected things can happen with a big move,I know a couple that found jobs and moved to Hawaii thinking that it would a great place for them to live. It turned out that one of them had terrible allergies to something there that had not been obvious when they had been on vacations there. After a year or so of trying various treatments they decided to returned from Hawaii.

OffTheGrid
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Re: Mortgage and Low-Income

Post by OffTheGrid » Sat Jun 17, 2017 11:48 am

Thanks all for the advice. It looks like short-term rental will be the way to go first if we do move.

I am curious... is it ever wise to put down more than 20% on a house? For example, we actually do have ~$10k more in savings that we're comfortable spending to add to the $41k for a down payment (this is AFTER making sure we maintain an emergency fund/savings and account for extra moving costs). But I don't know why we would put so much down...

JGoneRiding
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Re: Mortgage and Low-Income

Post by JGoneRiding » Mon Jun 19, 2017 10:28 am

Watty wrote:
seity wrote:I would look to rent in the area at first in order to get to know the area better and also what your income will really be. Then run the numbers as others have mentioned.
+1

Even if you had the money to pay cash for a house it would still be good to rent for six months or a year to make sure that you really want to live there and the new position is working out and your husband is able to find a like you expect. That will also give you time to learn the area and local housing market. Until your husband has gotten his new job you will not know what his commute will be like and you might end up with one on the wrong side of town for his job.
.

This is really important to consider. The people I bought this house from probably lost 100k in upgrades and transaction fees because they didn't do that. They bought and moved for the Husb job and while I think its an amazing place the kids were very unhappy at being moved and the wife was a SAH that neither were making good friends and then the Husb job still had him commuting all over the place. They sold 2 years after buying but had the house listed 6 months post closing to start with (18 mos back on the market at that time cold).

Also if you are relocating for the SAME company they most likely will consider your income for the loan, they will discount your husband. Ask your company if they will reimburse moving expenses

Carson
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Re: Mortgage and Low-Income

Post by Carson » Mon Jun 19, 2017 11:49 am

OffTheGrid wrote:
* Does a $180k mortgage sound too high? Is there a mortgage-calculator-of-choice on this forum?
When I got a promotion and DH got a job, we were looking at getting a new house. The best mortgage calculator was making a list of our monthly savings needs, actual expenses, and new house expenses, and from there 'backing into' the amount of mortgage we could comfortably afford. We have been here 10 years, and while I certainly regret buying at the peak for our area in 2007 :annoyed , I don't regret that we didn't get bullied or tempted into buying something that would have been more of a stretch financially. With this budget, we've been able to flex as our family grows, job changes, etc...
30-something personal finance enthusiast, just get getting started on this whole portfolio thing.

OffTheGrid
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Re: Mortgage and Low-Income

Post by OffTheGrid » Wed Jun 21, 2017 2:33 pm

Just want to check again to see if there is anyone who can give insight on whether or not putting MORE than 20% down on a house is a bad idea?

I'm really interested in knowing whether that's ever a good idea because we will have a large amount (at least $40k to $50k) to COMFORTABLY put down on a house but will likely get a much smaller loan because of our lower income, making that downpayment potentially a larger % of the overall home purchase price.

And, since it does look like we WILL be renting first if we move, maybe we will be able to further grow our savings in the meantime... (I mean, maybe not. Who knows.)

KlangFool
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Re: Mortgage and Low-Income

Post by KlangFool » Wed Jun 21, 2017 2:40 pm

OffTheGrid wrote:Just want to check again to see if there is anyone who can give insight on whether or not putting MORE than 20% down on a house is a bad idea?

I'm really interested in knowing whether that's ever a good idea because we will have a large amount (at least $40k to $50k) to COMFORTABLY put down on a house but will likely get a much smaller loan because of our lower income, making that downpayment potentially a larger % of the overall home purchase price.

And, since it does look like we WILL be renting first if we move, maybe we will be able to further grow our savings in the meantime... (I mean, maybe not. Who knows.)
OffTheGrid,

There is a bigger issue here. Why would you want to live a neighborhood of 180K houses? Will you be happy? Or, you will be constantly sad because of your family is the lowest income among your neighbors?

How will your children feel growing up if they are the poorest among their peers?

KlangFool

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saltycaper
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Re: Mortgage and Low-Income

Post by saltycaper » Wed Jun 21, 2017 3:36 pm

KlangFool wrote:
OffTheGrid,

There is a bigger issue here. Why would you want to live a neighborhood of 180K houses? Will you be happy? Or, you will be constantly sad because of your family is the lowest income among your neighbors?

How will your children feel growing up if they are the poorest among their peers?

KlangFool
Hmm... A household making 45-60K among a neighborhood of 180K houses doesn't suggest to me they will be the lowest income/poorest among their neighbors, especially with some savings. Sounds about right to me. Not that it matters whatsoever, IMO.
"I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said." --Alan Greenspan

KlangFool
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Re: Mortgage and Low-Income

Post by KlangFool » Wed Jun 21, 2017 3:50 pm

saltycaper wrote:
KlangFool wrote:
OffTheGrid,

There is a bigger issue here. Why would you want to live a neighborhood of 180K houses? Will you be happy? Or, you will be constantly sad because of your family is the lowest income among your neighbors?

How will your children feel growing up if they are the poorest among their peers?

KlangFool
Hmm... A household making 45-60K among a neighborhood of 180K houses doesn't suggest to me they will be the lowest income/poorest among their neighbors, especially with some savings. Sounds about right to me. Not that it matters whatsoever, IMO.
saltycaper,

1) Average American save nothing. So, it is safe to assume that they buy their houses based on their income level.

2) It looks like you are right. I underestimated how much people overstretch their budget to buy a house. In my area, median household income = 150K. The median house price around here is around 500K to 600K.

KlangFool

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saltycaper
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Re: Mortgage and Low-Income

Post by saltycaper » Wed Jun 21, 2017 4:12 pm

KlangFool wrote:
saltycaper,

Average American save nothing. So, it is safe to assume that they buy their houses based on their income level.

KlangFool
Maybe, but income earned still shouldn't matter much. If I had a million saved and made 40K a year, do I "belong" in no more than a 120K house? Is that where I would "fit in" best, with people who make 40K a year and save nothing? I don't think it's a big deal for someone in OP's financial demographic to buy a 180K house, but regardless, there's so much more than how much $ you earn relative to your neighbors that will determine how happy you are in a neighborhood and how well you get along with others in your community. Those things just wouldn't be on my radar at all.

Edit: I posted while you were editing. My bigger point is that I wouldn't worry about it either way. :happy
"I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said." --Alan Greenspan

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Re: Mortgage and Low-Income

Post by 123 » Wed Jun 21, 2017 4:22 pm

Some of the surrender value of the whole life policy will likely be taxable if you decide to cash it in. If you have to use some of the policy proceeds to pay the taxes there will be less available to use for a potential down payment. Just something to consider in your planning.
The closest helping hand is at the end of your own arm.

KlangFool
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Re: Mortgage and Low-Income

Post by KlangFool » Wed Jun 21, 2017 4:24 pm

saltycaper wrote:
KlangFool wrote:
saltycaper,

Average American save nothing. So, it is safe to assume that they buy their houses based on their income level.

KlangFool
Maybe, but income earned still shouldn't matter much. If I had a million saved and made 40K a year, do I "belong" in no more than a 120K house? Is that where I would "fit in" best, with people who make 40K a year and save nothing? I don't think it's a big deal for someone in OP's financial demographic to buy a 180K house, but regardless, there's so much more than how much $ you earn relative to your neighbors that will determine how happy you are in a neighborhood and how well you get along with others in your community. Those things just wouldn't be on my radar at all.

Edit: I posted while you were editing. My bigger point is that I wouldn't worry about it either way. :happy
saltycaper,

Yes, you won't. But, it may not mean it does not matter to others.

KlangFool

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Re: Mortgage and Low-Income

Post by niceguy7376 » Wed Jun 21, 2017 4:29 pm

OffTheGrid wrote:Just want to check again to see if there is anyone who can give insight on whether or not putting MORE than 20% down on a house is a bad idea?
It is not about bad idea or good idea.
Best idea is to buy house with cash, good idea is to buy what you could afford and make 20% down. Anything in between is also about your family scenario and circumstances.

Take a standard mortgage rate that you would expect and see how much the monthly payment will be for 20% down and for whatever down you want to make. Is the monthly payment a big concern for 20% down?

I would rather have cash in my bank account than put more into the house and have the flexibility to make an extra payment whenever you can.
True, you would pay more in interest for 20% down compared to 30 or 40% down. But for such low and fluctuating income, go get 20% down approved and go from there after being a home owner for 2 to 3 years and you have realistic expectation of home maintenance expenses.

Carefreeap
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Re: Mortgage and Low-Income

Post by Carefreeap » Wed Jun 21, 2017 5:06 pm

OffTheGrid wrote:Just want to check again to see if there is anyone who can give insight on whether or not putting MORE than 20% down on a house is a bad idea?

I'm really interested in knowing whether that's ever a good idea because we will have a large amount (at least $40k to $50k) to COMFORTABLY put down on a house but will likely get a much smaller loan because of our lower income, making that downpayment potentially a larger % of the overall home purchase price.

And, since it does look like we WILL be renting first if we move, maybe we will be able to further grow our savings in the meantime... (I mean, maybe not. Who knows.)
The biggest risk is having that money locked up in a single asset and you have to move again. If the market corrects and the value goes down you might need to rent it out for awhile and you wouldn't have money for a house in your new location.

saladdin
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Re: Mortgage and Low-Income

Post by saladdin » Wed Jun 21, 2017 6:26 pm

No way I would put more than 20% down and tie up my cash in a vehicle you can't get it out of in case of an emergency.

I make 48k and only bought a 68k house. I couldn't sleep with 140k mortgage making what you are. But my location is different and my need to "sleep at night" is important.

Rent for a year. Renting is not throwing money away. You have time, do not rush.

czr
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Re: Mortgage and Low-Income

Post by czr » Wed Jun 21, 2017 8:44 pm

After you move and rent, set up your monthly budget as if you bought a home with property taxes, insurance, maintenance with your other ordinary household expenses while saving for retirement. You should be comfortable enoughYou will learn quickly what your new budget will be. One thing that sneaks up on people is childcare expenses and build extra emergency padding for when you need a new roof, AC, or appliance but those can all be planned out. The second you buy a house, you are 'underwater' so to speak for the seller's commission if for some reason you needed to move in 6 months or a year or ever. Buying a house gives you poor flexibility short term if you needed to move and sell. It's good that you stay conservative and keep and maintain that 3-6 month emergency fund after 20% down.

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grabiner
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Re: Mortgage and Low-Income

Post by grabiner » Wed Jun 21, 2017 9:40 pm

OffTheGrid wrote:Just want to check again to see if there is anyone who can give insight on whether or not putting MORE than 20% down on a house is a bad idea?
It's a bad idea only if you have a better use for the money. For example, if putting more than 20% down means that you have to sell stock for a large capital gain, or that you don't get to contribute enough to your 401(k) to get the full employer match, you are paying a large cost. Conversely, if putting 30% rather than 20% down means that you get a lower interest rate, it may be a very good idea to put the 30% down.

Without any other considerations, the effect of putting more down is that it lowers your future monthly payments, as if you bought a bond or CD ladder at a yield equal to your mortgage rate. If you put an extra $10,000 down on a 15-year 3% mortgage, your monthly payment will be $69 less; if you invested $10,000 in a bond fund yielding 3%, you could withdraw $69 per month for 180 months.
David Grabiner

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Re: Mortgage and Low-Income

Post by jjface » Wed Jun 21, 2017 10:53 pm

Keep it at 20% . Retaining some liquidity is good and mortgage rates are low right now. You can always pay down more later when things are more comfortable financially.

OffTheGrid
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Re: Mortgage and Low-Income

Post by OffTheGrid » Thu Jun 22, 2017 11:47 am

Thanks for the additional insight about down payments, I appreciate it. I wasn't really interested in stretching beyond 20%, but I wanted to hear if there were other considerations I didn't think of...

As for not "fitting in" in a certain neighborhood, I'm not quite sure I agree. I'd say I feel awkward around people that make similar incomes to us BECAUSE it seems like we're making more... Most low-income families we know do NOT have robust savings or even retirement accounts like we do, and they carry lots of debt. In fact, most people I know have hardly anything to put down initially on a house, take whatever max the bank gives them... which I think is a little nuts! But of course, that's the neighborhoods AROUND our area... We actually live in a very rural area, no neighbors here :D . And we intend to move somewhere that is predominantly rural as well.

All that being said... I certainly would love to find a house for as low as possible, under $100k (even if our income ends up being close to $75-80k/year which is what it would be if my husband is re-employed... not including capital gains, farm income, and fluctuating income I continue to get from additional freelance work) -- but since we are ultimately looking for a larger lot/land with it, it might not work that way.

Guess we'll have to wait and see (if we move, then rent) how things pan out...

Gufomel
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Joined: Sat Feb 14, 2015 9:52 pm

Re: Mortgage and Low-Income

Post by Gufomel » Fri Jun 23, 2017 11:21 am

OffTheGrid wrote:As for not "fitting in" in a certain neighborhood, I'm not quite sure I agree. I'd say I feel awkward around people that make similar incomes to us BECAUSE it seems like we're making more... Most low-income families we know do NOT have robust savings or even retirement accounts like we do, and they carry lots of debt. In fact, most people I know have hardly anything to put down initially on a house, take whatever max the bank gives them... which I think is a little nuts! But of course, that's the neighborhoods AROUND our area... We actually live in a very rural area, no neighbors here :D . And we intend to move somewhere that is predominantly rural as well.
I agree with this. I would bet that you're in better financial shape than >50% of Americans who make $100k / year. That said, be careful with how much house/land you buy. You seem to have the right line of thinking and have received some good advice on this thread. Best of luck!

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