Should I Buy A Home
by Heather from North Carolina USA
Hi Kate, Should I buy a home without significant income? My husband and I are hoping to be able to relocate soon. We both have good credit. Our concern is that he is currently unemployed, but enrolled in college. I do not make a lot of money at my job. However, we have decent savings. We have enough savings we could pay off a new home, but obviously we do not want to do that.
... Is it possible that we could get approved for a mortgage based on our savings rather than our income? We plan to put down a 25 to 30 percent downpayment. Thanks, Heather
Kate Answers: Should I Buy A Home
Dear Heather, I recommend not asking how can I get a mortgage but should I buy a home
Conventional wisdom says buy a home before prices escalate and keep 6 months living expenses in reserve.
But taking into consideration a recession, it is realistic to doubt that real estate values are going up anytime soon. This takes the panic out of buying a house today.
When your husband graduates from college, what if there are no available jobs? How long would the remainder of your savings last with monthly house payments and no income? Reserving two years living expenses would be prudent.
Think about this! The two of you are good savers. You've demonstrated that. But even a comfortable savings evaporates quickly for new graduates in search of jobs and simultaneously responsible for mortgage payments.
Once your husband is out of college and employed, buy a home. By keeping your savings available for living expenses until a job is secured, you won't risk over-extending yourself or becoming cash-poor.
Preserving good credit and avoiding bad credit should always be number one priority.Click here to comment on this page
. Or, if you still have questions about home buying, write me at Ask Kate
where every question is a good question.
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