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Question
Do you think we can get a mortgage?
My fiance and I are in the process of moving out a townhome into a house. Our townhome is up for sale and we don't plan on seriously looking for our new place until we have a contract.. But, here's the deal. He owes 95,000 on the townhome, we are asking 215,000. We are hoping to get 208000 for it. Now the townhome is in his name only. He had it before we met, so that money is his. He will have between 95,000 and 105,000 down payment on something new. I make 41,000 as a legal secretary (and I'm up for a raise come january) and the only debt I have is my car payment and fixed things like car insurance, and phone bill. He is a union electrician, but he is laid off. He is collecting about $45,000 per year under unemployment and has about $20,000.00 in a savings account. (he saw the economy going down and planned for it... he's really good with his money (*cough* cheap *cough*)) and has no debt (not even a car payment) outside of his mortgage, which he has already paid up through the end of the year. When he is working he makes about $75,000.00 per year, but we both agree in its best to get something we can afford while he is laid off anyway as you never know what the future holds. . We are looking at homes that are asking around 289,000. Do you think we can get a loan or will we be resigned to living with his mother until he is working again? Additionally, should we wait until our house is under contract before we try and get a loan? Or is it ok to go to a loan officer now and we what we are working with?
4 weeks ago - 5 answers
Best Answer
Chosen by Asker
It's definitely worth applying with a lender or two. Have you looked at any mortgage calculators to see if you can afford that payment? Assuming that your fiance is out of work for longer than expected and that you have to make all payments on your salary alone, you'll want to do a "worst case scenario" budget using just your salary. Also, it sounds like you may be using a lot of your liquid cash reserves as down payment, so you'll need to know how you'll pay for it if you have any big repairs come up in the first few years. Another thing you need to be careful of is that you may not have enough credit to have an excellent rating. If you haven't already, it's worth going to annualcreditreport.com (the government's website where you can get one free report each year) and pulling your credit reports to see what's reporting. You can then, if you choose, pay to get your scores from the three credit reporting agencies. It may be useful to each have one credit card that you use once a month and then pay off in its entirety every month. The available credit and on-time payment history will report to the credit reporting agencies and help improve your scores. Other than that, your situation sounds very doable. I'd definitely do a little more budgeting/planning and then start talking to a lender or two.
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by wilhelmina_d
4 weeks ago
Asker's Rating: 
Other Answers
I think you can probably get a loan, mostly because of the size of your down payment. However, it's not entirely certain; his unemployment may be a problem. I will say, though, that different banks have very different algorithms for who they loan what to, so my big suggestion is that if his bank rejects you, you should shop around a bit. I expect somebody will be willing to give you a loan.
by SK- 4 weeks ago
If you take the expected equity out of the home as a downpayment you avoid PMI and in turn show that you have sizeable equity invested in your home. Bottom Line...Yes I think you would be able to get a loan. Even on your income and his unemployment benefit. Good Luck!
by the biz- 4 weeks ago
First of all kudos to both of you for your common sense and "frugality"!! Any lender and Realtor would love to work with people like you. Most likely your credit scores are in the excellent range, so you can probably qualify for the amount you want if all the factors are in place. Speak to a lender about how much you can qualify for and start looking at houses but don't make any offers until you have a contract on that town home. Since you are not in a hurry you can afford to sit tight until the right offer comes in.
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by Lee Cook- 4 weeks ago