670 score, 16k, want to borrow 700k
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Anonymous
Typo: you need to move to an INexpensive place to rent. |
Anonymous
. Dc no work from home |
Anonymous
Have roommate who lost job in covid. Used all savings to cover full 4500 rent since last February. Before I pulled savings I was late on payments trying to avoid pulling my savings. |
Anonymous
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2.5K 2BDs in the safest part of DC:
https://www.zillow.com/b/ava-van-ness-washington-dc-5XhvDt/ Seriously, how is this hard? |
Anonymous
So this is a great illustration of how important it is to have a robust savings as a homeowner. If you get jammed up, you won't just ruin your credit; you will lose your home. |
Anonymous
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so your "roommate" who lost job during covid is STILL a roommate? (you use present tense). Is that person on the lease? Time to take them to small claims court if they don't make an agreement to pay you back. Did that person receive stimulus? Did you receive that? And where is your child's other parent?
You should not be buying a house now. You can't afford it, your credit score stinks. Your $16K should be your emergency fund. Get cheaper rent and start again when you hit $50K. With your salary you should be saving a TON. Cut expenses to the bare bones. Agree with PP that you seem like you're desperate to make an impulse purchase. Don't. |
Anonymous
| people in Glover Park are constantly posting English basements for rent. Best schools. Come on, OP, try a little harder to help yourself. |
Anonymous
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I’m assuming you are trying to stay in your neighborhood for schools/kids mid friends?
Given your salary is there a reason you don’t have more saved? I’m guessing you are worried about moving your kid to a smaller place, maybe even leaving a sfh. But your kid will suffer a lot more if you get in over your head. Can you give us an idea of school zones/neighborhood if applicable and we can help you find a nice rental until the market cools and you can build up savings. |
Anonymous
| OP, please stop being so cryptic and and answer some questions if you really want good advice. |
Anonymous
And the elementary school? |
Anonymous
Savings eaten by mid lease lose of roommate 1/2 of rent. Been in Arlington for 20 years. Not trying to buy here. I want to make sure I Understand. I will not qualify at all? Or I would like qualify for 500k? |
Anonymous
Lease yes. Stimulus no. Co parent isn’t paying ordered support stopped last year. |
Anonymous
You may or may not manage to be approved. I can't speak to that. And of course, there are many on DCUM who are very, very conservative financially, so you'll get a lot of "OMG NO TERRIBLE you need $200k cash to do that!!" on here, I'm sure. I'm a bit more willing to take financial risks (we have a HHI $185k, and we have a big mortgage ($4k PITI) plus pay a lot for childcare ($2500, about to go up to $4k) which many on DCUM would say is CRAZY and doesn't leave us with much other money, but we are fine with it. However - I do not thing this is a good move for you. 1) Closing costs in DC are very high. Honestly, I don't think you'd be able to cover them with your $16k. Even if you could manage to squeak by, you'll have literally 0% down. 2) You have no cushion. You need an emergency fund. You should be working up to 3 months expenses. I would not buy a house with less than that put aside. Things break when you own a house, and they need to be fixed right then - if the AC craps out in the middle of summer, what are you going to do? Or the hot water heater? Even a place that's pretty "turnkey" has stuff come up. 3) It's clear that you do not have good money habits if you're living paycheck to paycheck on $175k. You need to learn to live on a budget and save. How are your retirement savings? Do you have any idea where you money is going? Make sure you're at least putting enough towards retirement to get your full employer match. Let's say that's 5%, that means essentially you're saving 10% for retirement, that's a good place to start. That leaves you with a take home pay of, what, roughly $9k? Break that up, and make some sacrifices to save: $1700 - debt payments $2500k - housing expenses (yeah, you need to rent a while longer, I'm also including utilities, etc) $1k - food $1k - emergency fund savings $1k - house fund $1k - clothes, entertainment, spending money, travel $300 - gas $500 - other This is just a sample - but you've got to figure out where your money is going and get a handle on your savings. If you're saving $2k a month, that means your expenses are $7k a month, and your emergency fund goal should be $21k. If you split your $16k in half, $8k for emergency fund, $8k for your house fund, in a year or so, you'd have a solid emergency fund and enough to cover your closing costs and put maybe a percent down. THEN you can think about buying a house. Also - moving should not cost $8k!! This is what I mean by you need to get a handle on your spending - money is clearly just flowing through your fingers. |
Anonymous
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OP - Although you want to, I don't think you are ready to buy a home yet. There are a lot of issues that go with buying a home.
First, when you are buying with less than 20% down, you will be paying PMI (private mortgage insurance). Basically you are paying an extra fee to insure that should you fail to pay and the lender has to foreclose on your house that the lender is insured for monetary losses which can be substantial. It's not a lot, but it is a monthly payment added on to your payment, which decreases the amount of money that you pay each month towards principal. As another PP mentioned, the first 2-3 years of payments, you will be paying virtually nothing towards equity, but will primarily be paying heavily up front on the interest payments against the loan. Last, the closing costs can be significant and range between 5-15% of your home cost (the most expensive the house, the lower the percentage). You are probably looking at around $8K-20K worth of closing costs You can roll some or all of the closing costs into the loan, but that increases your loan. The less you put in for a down payment, the higher your interest rate will be. So it will increase the amount of money that is taken up front in the first few years and extend the period when you are earning virtually no equity in the house. Also, your credit rating will likewise increase the interest rate you are paying. When you hear all of those great rates on commercials and ads, those are essentially for people who are putting 20% down and have a credit rating 750+. You will not get those rates in your situation. Another big issue is that unless you are buying a very solid home, either one well-cared for by the previous owners, or a flip where most things are new, you can expect some costs in the first year of ownership. There are always things ranging from appliances (d/w, w/d, stove, oven, water heater, HVAC, fridge) to electrical to plumbing, vents, that need repairs or maintenance in the first year. And if you don't do maintenance on these things (like doing a spring-time inspection/cleaning of the AC or the fall inspection/cleaning of the furnace/heat pump) then you run the risk that something could happen and leave you without that appliance when you get into the season. A little money up front often prevents a lot of money later, especially at the wrong times (e.g. furnace going out during a cold snap or A/C going out during a heat wave). I general, it is conservatively recommended that you have 1% of the purchase price of the home to account for the unexpected during the first year or two of home ownership. There always seems to be something that comes up that you need to deal with. The older the appliances and components of the house, the more likely you'll have issues (although there often seems to be a cap at around 60 years, things were built to last much longer in pre-1960 homes. Additionally, although might be included in the 1%, you might find the additional accessories for home ownership may run over that. For example, if you buy, you may be responsible for a yard, or landscaping or plants. When you rent and there is a problem with that, usually the landlord takes care of a lot of those costs, but when you own you have to pay for all of that. You have to be responsible for clearing your sidewalk or shoveling a driveway or parking space. I've had many friends who didn't realize all of the things that they'd need to buy to take care of a house. As renters, when many problems came up, they called the landlord or property management and had them take care of things. But when you are a homeowner, you have to deal with things yourself or you have to hire someone to do it for you. Like others, I would recommend that you consider relocating to a less expensive home for a few years and get much more of a savings before you go into home ownership. I just don't want to see you spending everything to get into a home and then finding in the first two years that you just can't afford to live there. Home ownership is a lot of work beyond just the mortgage payment and it can be pretty expensive. In the long run, you'll get more out than you put in, but it does require a lot of time and money investment up front. |
Anonymous
where in DC? |