Description
This article is from the NewlyWed FAQ,
by Vicky Larmour vicky@jifvik.org with numerous contributions by
others.
3.1.5) Save!
>Have a discussion with your parents about whether they would be able
>and willing to help you, and in what ways. Someone told me recently
>that something like 80% of first-time buyers in California have some
>form of down payment assistance from parents. It never hurts to ask.
>Figure out how much you can afford to pay. Rule of thumb: You can
>borrow approximately three times your annual income (depending on
>how much debt you already have -- a car loan, for example), and you
>will need cash savings of at least 10% down for a conventional
>mortgage package. You can get away with less down if you are lower-
>to middle-income, if the house you're buying is within the price
>limits of the various down-payment-assistance programs, and if you
>meet various other requirements. Check to see if your city or county
>offers special first-time buyer assistance programs, and research
>whether you qualify for any of the FHA programs (anyone know the
>url?) You will also need cash for closing costs, unless you get a
>no-cost loan, which usually involves higher interest rates. Closing
>costs will run you about 3% of the purchase price. So, let's say
>you've got $25,000 in the bank, your total household income (before
>taxes) is $75,000 and you have no other debt. You can probably buy a
>house for $191K - $262K (the upper end probably means you need to
>save a bit more or cajole some down payment assistance out of your
>parents). Remember, however, that the amount the bank says you can
>afford to pay every month for mortgage, insurance, and real estate
>taxes may be more than YOU think you can afford (and still be able
>to go out to eat sometimes and buy new underwear once in a while).
>Budget carefully.
-Holly Lewis
>Get your cash in early so you don't have as much paperwork -- if
>your family is giving money, have them write gift letters. Save more
>for your down payment so you can afford more. Interest rates may
>gradually rise, but if you're saving at a good rate, you should still
>be able to afford more house after a year of socking away funds.
-T
>If parents are giving you any $$ as a help, get it in your bank
>account ASAP. You will have to provide 3-6 months of bank statements,
>and any deposits will have to be explained.
-Sandi Rollins
>Our situation was very different. We borrowed money from my inlaws
>(money we knew we'd be able to pay back eventually) and the money
>could NOT go in our bank account. Apparently, our mortgage was for
>first time home buyers and it had certain income requirements. If
>we'd had the gift amount from my inlaws in our account, it became
>our asset and we couldn't have gotten our mortgage (with a great
>rate, too :) ). My inlaws had to get a cashier's check made out to
>the name of the law firm handling our closing. I'd check with a
>knowledgable realtor and see what your mortgage will require.
-Lisa
>You start by figuring out how much you can afford. With a few
>calculations, you can figure out how much you can afford and what
>your payments will be. You should decide the term of your loan as
>well to determine the monthly payments. We really wanted a 20 year
>instead of a 30 year loan, and we were surprised to find out that
>the difference in our monthly payments wasn't all that much.
-Kelli Hughes
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society, wedding, newlywed, conflict resolution, car, house, child, anniversary gift
