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MissLola · 02-06-2007, 07:41 AM

From buying our first home and from my previous job as a collector for a mortgage company, I can tell you a couple things. As a general rule, your house payment shouldn't be more than 25% of your take-home pay. Do whatever you can to get a 15 year mortgage, if possible. It sounds like that might not be an option in your case. It wasn't an option for me and hubby either when we went to get our first loan 3 years ago because he was self-employed and they wouldn't use his income to qualify. We ended up getting a balloon payment mortgage in order to get into the home on my income only, which we have to refinance in the next few months to a regular mortgage. We are going to do everything possible to get a 15 year mortgage this time.

Here are a few stats you might find interesting about a 30 year mortgage vs. 15 year mortgage....If you borrow $110,000 for your home, your monthly payment at 7% interest is $732 on a 30 year loan. On a 15 year loan, your monthly payment goes up only $256, so $988 per month. When you look at interest, you pay almost $86,000 more in interest on the 30 year loan.

So if you can scrape by an extra $250 per month for your payment, you'll save $86,000 in interest. I've never considered a 40 year loan...yikes.

One other thing I have to say (from experience at my previous job), NEVER, EVER put much money into (and by no means finance) a mobile home. Please tell me this is a stick-built home you're trying to buy. Even the newest mobile homes will depreciate just like cars, no matter what you do to make them seem like a regular home (permanent foundation, basement, etc). In a few years you will owe several times what the house is worth.

And definitely check the housing market in your area. Where we built, land and houses are going up in value like crazy, so I'm glad hubby and I scraped by and built this house when we did. Even though we are looking to refinance shortly, our land and house has gone up significantly in value over the last 3 years. You'll have to check different areas where you live. We live outside the city, in an area where land prices are getting ridiculous. I'm 27 and hubby is 29, which makes us the youngest people in our area (most are retired), but we shopped carefully to find land we could afford in an area where the value consistently goes up.

I hope that helps a little, and good luck! Buying a home is exciting!

02-06-2007, 07:41 AM	#15
MissLola Donating Senior Yorkie Talker Join Date: Jan 2007 Location: South Dakota Posts: 340	From buying our first home and from my previous job as a collector for a mortgage company, I can tell you a couple things. As a general rule, your house payment shouldn't be more than 25% of your take-home pay. Do whatever you can to get a 15 year mortgage, if possible. It sounds like that might not be an option in your case. It wasn't an option for me and hubby either when we went to get our first loan 3 years ago because he was self-employed and they wouldn't use his income to qualify. We ended up getting a balloon payment mortgage in order to get into the home on my income only, which we have to refinance in the next few months to a regular mortgage. We are going to do everything possible to get a 15 year mortgage this time. Here are a few stats you might find interesting about a 30 year mortgage vs. 15 year mortgage....If you borrow $110,000 for your home, your monthly payment at 7% interest is $732 on a 30 year loan. On a 15 year loan, your monthly payment goes up only $256, so $988 per month. When you look at interest, you pay almost $86,000 more in interest on the 30 year loan. So if you can scrape by an extra $250 per month for your payment, you'll save $86,000 in interest. I've never considered a 40 year loan...yikes. One other thing I have to say (from experience at my previous job), NEVER, EVER put much money into (and by no means finance) a mobile home. Please tell me this is a stick-built home you're trying to buy. Even the newest mobile homes will depreciate just like cars, no matter what you do to make them seem like a regular home (permanent foundation, basement, etc). In a few years you will owe several times what the house is worth. And definitely check the housing market in your area. Where we built, land and houses are going up in value like crazy, so I'm glad hubby and I scraped by and built this house when we did. Even though we are looking to refinance shortly, our land and house has gone up significantly in value over the last 3 years. You'll have to check different areas where you live. We live outside the city, in an area where land prices are getting ridiculous. I'm 27 and hubby is 29, which makes us the youngest people in our area (most are retired), but we shopped carefully to find land we could afford in an area where the value consistently goes up. I hope that helps a little, and good luck! Buying a home is exciting!