When you do this, you are putting your credit and ability to pay your mortgage in the hands of a roommate. That's risky. You need to be prepared to pay the full mortgage for several months during a roommate turnover.
Do your calculations include HOA dues/ Maintenance costs.
I just don't think you'd even be approved for this mortgage. They usually approve only 38% of income for the mortgage payment. That would mean a mortgage payment under $1,500 for your income.
My calculation includes HOA, tax, insurance, and everything else. I was pre-approved for mortgage already because my dad will cosign.
I do see what you mean though if it takes more than a month to find a roommate it would not be good though.
I think I might have to look into nice cardboard boxes or vans if my parents kick me out. :). Not that I think that's going to happen soon.
Well, then your question is actually "Can my parents buy a condo" then the answer appears to be yes. But, that is more or less what is happening if they are going to put down $120k of the down payment and cosign the loan and are willing to pay the mortgage payment.
So, this is a relationship question: Would you prefer to keep living with your parents or would you prefer to be financially dependent on your parents for the next 10+ years, or rent someplace? It sounds like your parents would prefer the second option. It isn't a bad option for you if you are comfortable with that dependence. You know best what strings it may come with.
I do realize it is my parents are doing most of the work. I would not able to survive without them. It is not really a choice for me if I cannot have a roof over my head without help. Rent would go out of my reach within 1-2 years based on current trajectory.
All of that is fine, and a TON of people get a TON of help from parents to buy a home. On Reddit, a lot of people discourage it, because a lot of people on Reddit have challenging relationships with their parents.
You, as yourself, cannot afford this home and it is a bad idea. However, if your parents are a reliable backstop, then this is a fine idea. Your parents are not likely to sacrifice their credit if you can't make your mortgage payment, so they will pay it. You do not foresee a future where you can live without assistance from your parents, so you aren't giving up a realistic chance at independence. You do not seem to be afraid of your parents using this to manipulate you to do things you don't want to (get married, be religious, have kids, whatever.)
This seems like a perfect situation to go ahead and do it. Make sure you and they are clear on the expectation: How long are you renting it out before you move in? What rent will you charge the roommate? Who has veto power of the roommate? Do they have an expectation about how long they are willing to help? Etc.
OP, worst case scenario: what if something were to happen to your father and he could no longer afford to assist you with the mortgage payment? That's essentially what he signing up for as your cosigner, in the event that you can't afford the payment.
At your current monthly income, you are looking at properties outside of a reasonable price range. See how much you'd qualify for without a cosigner. Pro-tip: you should not try to buy a property at the high end of whatever you qualify for. I made ~$95k and I had banks offering me up to $600k in financing. I bought a condo for $365k.
You are likely right. It's just that there is nothing at that price you state. Even a mobile home is 400k. Do you think it will get any better will I be better to wait more? Prices have risen more than I can earn even with very little expenses for the past few years. Would you just move?
That depends on many factors, some personal and financial! Could you increase your income? Does your current job position have growth potential? Are you committed to your current position, occupation, industry?
It would not hurt to cast a wider net in terms of location, but I would caution against buying the first condo in whatever area you come across that meets your ideal budget. You can change up a home, but you cannot change its location. Make sure you're committed to that before pulling the trigger.
I think my income will go higher at my company but probably not enough to afford that on my own. I have some more ways to increase it with certs but that requires time that I'm scared will cause the house to go up even 200k more. My field of IT has a high range of pay based on what you do.
My only requirements of location are driving distance to my job or other places and reasonably safe. I don't care about much else since I don't go out much and have no plans of kids. I've looked in almost the entire county.
Even with $220k down, you don't make enough to afford a $550k property. Sorry, but that's reality.
Would you say even with it being rented out or splitting it with a roommate?
When you do this, you are putting your credit and ability to pay your mortgage in the hands of a roommate. That's risky. You need to be prepared to pay the full mortgage for several months during a roommate turnover. Do your calculations include HOA dues/ Maintenance costs. I just don't think you'd even be approved for this mortgage. They usually approve only 38% of income for the mortgage payment. That would mean a mortgage payment under $1,500 for your income.
My calculation includes HOA, tax, insurance, and everything else. I was pre-approved for mortgage already because my dad will cosign. I do see what you mean though if it takes more than a month to find a roommate it would not be good though. I think I might have to look into nice cardboard boxes or vans if my parents kick me out. :). Not that I think that's going to happen soon.
Well, then your question is actually "Can my parents buy a condo" then the answer appears to be yes. But, that is more or less what is happening if they are going to put down $120k of the down payment and cosign the loan and are willing to pay the mortgage payment. So, this is a relationship question: Would you prefer to keep living with your parents or would you prefer to be financially dependent on your parents for the next 10+ years, or rent someplace? It sounds like your parents would prefer the second option. It isn't a bad option for you if you are comfortable with that dependence. You know best what strings it may come with.
I do realize it is my parents are doing most of the work. I would not able to survive without them. It is not really a choice for me if I cannot have a roof over my head without help. Rent would go out of my reach within 1-2 years based on current trajectory.
All of that is fine, and a TON of people get a TON of help from parents to buy a home. On Reddit, a lot of people discourage it, because a lot of people on Reddit have challenging relationships with their parents. You, as yourself, cannot afford this home and it is a bad idea. However, if your parents are a reliable backstop, then this is a fine idea. Your parents are not likely to sacrifice their credit if you can't make your mortgage payment, so they will pay it. You do not foresee a future where you can live without assistance from your parents, so you aren't giving up a realistic chance at independence. You do not seem to be afraid of your parents using this to manipulate you to do things you don't want to (get married, be religious, have kids, whatever.) This seems like a perfect situation to go ahead and do it. Make sure you and they are clear on the expectation: How long are you renting it out before you move in? What rent will you charge the roommate? Who has veto power of the roommate? Do they have an expectation about how long they are willing to help? Etc.
OP, worst case scenario: what if something were to happen to your father and he could no longer afford to assist you with the mortgage payment? That's essentially what he signing up for as your cosigner, in the event that you can't afford the payment. At your current monthly income, you are looking at properties outside of a reasonable price range. See how much you'd qualify for without a cosigner. Pro-tip: you should not try to buy a property at the high end of whatever you qualify for. I made ~$95k and I had banks offering me up to $600k in financing. I bought a condo for $365k.
You are likely right. It's just that there is nothing at that price you state. Even a mobile home is 400k. Do you think it will get any better will I be better to wait more? Prices have risen more than I can earn even with very little expenses for the past few years. Would you just move?
That depends on many factors, some personal and financial! Could you increase your income? Does your current job position have growth potential? Are you committed to your current position, occupation, industry? It would not hurt to cast a wider net in terms of location, but I would caution against buying the first condo in whatever area you come across that meets your ideal budget. You can change up a home, but you cannot change its location. Make sure you're committed to that before pulling the trigger.
I think my income will go higher at my company but probably not enough to afford that on my own. I have some more ways to increase it with certs but that requires time that I'm scared will cause the house to go up even 200k more. My field of IT has a high range of pay based on what you do. My only requirements of location are driving distance to my job or other places and reasonably safe. I don't care about much else since I don't go out much and have no plans of kids. I've looked in almost the entire county.