Who can truly afford a home in Irvine?
- Thread starter Irvinecommuter
- Start date
NEW -> Contingent Buyer Assistance Program
If $40K is your household income, the max loan amount available to you is likely ~$215K - assumes a 35% front-end DTI & 45% back-end DTI. So, for a $300K condo, you'd need an ~$85K downpayment.
I don't if this helps or not. Do you know about the affordable housing program in Irvine?
http://www.cityofirvine.org/community-development/affordable-housing
https://www.irvinecompanyapartments.com/locator-service/affordable-housing
The Ability to Repay (ATR) rule requires lenders qualify borrowers based on their real income and the real monthly cost. Nearly every mortgage being made today is a Qualified Mortgage (QM) under ATR, which means the max back-end DTI is 43%. Fannie/Freddie/FHA/VA loans are afforded a temporary slightly higher DTI.
The lower the downpayment gets, the highly the monthly payment gets, thereby pushing the back-end DTI restriction. So it's great to have a 0% down VA mortgage available, but the monthly payment on that loan will be higher, and very likely constrict the amount you can borrow.
http://www.consumerfinance.gov/poli...andards-under-truth-lending-act-regulation-z/
I know people are talking about different programs that have less downpayment but for the sake of simple math..
For 300k loan (purchase price is probably more) let's just say at 3.75% purchase would be around $1400 a month. I assume you want to live in Irvine so I put your tax at around 1.4% (more at new communities...I did this at $300k so it's even less for argument sake) would add around $350 to your payment then add in expected $350/month for HOA (condo is higher) then $50/month for insurance...around $2150 already
$40,000 a year is $3333 a month. $2150/$3333 is already 64% DTI
Most people are right...banks like to keep 43% DTI or less
These are just simple calculations...but it'll be tough...solutions would be
1) make more money
2) save more money to borrow less (this is not counting reserves which are needed too and any closing costs
3) this is assuming no other debt like cars/credit cards/student loans
4) add another signer or guarantor to add their income
5) Look elsewhere, maybe somewhere like long beach or palmdale/Bakersfield where purchase price is closer to $200k and no Mello Roos (less tax rate)
At this point, I would recommend do anything you can to boost your income even if you like your current job and keep saving. I bought my first home at around 23-24 years old and saved until I got around $100k...or 20% down...of course you can do it with less but it's a lot of stress with
Best of luck!!
I am thinking all the time, how can a family afford that price.
I do not require a large luxury house, I would like to buy a condo with one bedroom. The market price is around 300K, if I make 40K a year is that possible to get the mortgage and start a loan?
is anyone could help me with that question?
I have 30K saved to be paid as the down payment.
I do not require a large luxury house, I would like to buy a condo with one bedroom. The market price is around 300K, if I make 40K a year is that possible to get the mortgage and start a loan?
is anyone could help me with that question?
I have 30K saved to be paid as the down payment.
Perspective
Well-known member
Cynthia said:
If $40K is your household income, the max loan amount available to you is likely ~$215K - assumes a 35% front-end DTI & 45% back-end DTI. So, for a $300K condo, you'd need an ~$85K downpayment.
Cynthia said:
I don't if this helps or not. Do you know about the affordable housing program in Irvine?
http://www.cityofirvine.org/community-development/affordable-housing
https://www.irvinecompanyapartments.com/locator-service/affordable-housing
Perspective
Well-known member
eyephone said:
The Ability to Repay (ATR) rule requires lenders qualify borrowers based on their real income and the real monthly cost. Nearly every mortgage being made today is a Qualified Mortgage (QM) under ATR, which means the max back-end DTI is 43%. Fannie/Freddie/FHA/VA loans are afforded a temporary slightly higher DTI.
The lower the downpayment gets, the highly the monthly payment gets, thereby pushing the back-end DTI restriction. So it's great to have a 0% down VA mortgage available, but the monthly payment on that loan will be higher, and very likely constrict the amount you can borrow.
http://www.consumerfinance.gov/poli...andards-under-truth-lending-act-regulation-z/
SoclosetoIrvine
New member
Cynthia said:
I know people are talking about different programs that have less downpayment but for the sake of simple math..
For 300k loan (purchase price is probably more) let's just say at 3.75% purchase would be around $1400 a month. I assume you want to live in Irvine so I put your tax at around 1.4% (more at new communities...I did this at $300k so it's even less for argument sake) would add around $350 to your payment then add in expected $350/month for HOA (condo is higher) then $50/month for insurance...around $2150 already
$40,000 a year is $3333 a month. $2150/$3333 is already 64% DTI
Most people are right...banks like to keep 43% DTI or less
These are just simple calculations...but it'll be tough...solutions would be
1) make more money
2) save more money to borrow less (this is not counting reserves which are needed too and any closing costs
3) this is assuming no other debt like cars/credit cards/student loans
4) add another signer or guarantor to add their income
5) Look elsewhere, maybe somewhere like long beach or palmdale/Bakersfield where purchase price is closer to $200k and no Mello Roos (less tax rate)
At this point, I would recommend do anything you can to boost your income even if you like your current job and keep saving. I bought my first home at around 23-24 years old and saved until I got around $100k...or 20% down...of course you can do it with less but it's a lot of stress with
Best of luck!!
https://www.zillow.com/mortgage-calculator/house-affordability/
You can't afford anything near 300k. You can only afford up to 225k in Irvine assuming no monthly debts such as CC or car payments, 1.05% prop tax, and 43% DTI. I would try going south such as Laguna Hills.
Median income in Irvine includes everyone such as renters. Home owners in Irvine are obviously more likely to earn more than the median.
You can't afford anything near 300k. You can only afford up to 225k in Irvine assuming no monthly debts such as CC or car payments, 1.05% prop tax, and 43% DTI. I would try going south such as Laguna Hills.
Median income in Irvine includes everyone such as renters. Home owners in Irvine are obviously more likely to earn more than the median.
Irvine Seeker
New member
It's not just Irvine, pretty much all OC. Cynthia needs another income from a friend, spouse or business partner (at least to double the income to $80k) for $450k 2 bed condo, or a big help from her parents or family member.
I was having conversation with an older couple who had a grown up working kid. The kid was renting a 3 bed condo with 2 other friends, paying close to $800 a month. The couple were thinking of getting $100k out of their home equity for the kid's down payment of $500k condo (2 or 3 bed depending on the plan, size and location) and renting out 1 or 2 bedroom when the kid was ready for home ownership.
This is not rich a couple. They both work, pushed themselves to get a descent home almost 20 years ago by stretching out their budget, and are still working hard to pay off the mortgage. However, for the kid who has an engineering degree and working full time, can't afford anything in OC without the parents' help.
I'm thinking this will get worse and become a norm for younger folks for starter homes. So if you don't have wealthy parents, it's pretty much impossible to become a home owner as a young professional...
I was having conversation with an older couple who had a grown up working kid. The kid was renting a 3 bed condo with 2 other friends, paying close to $800 a month. The couple were thinking of getting $100k out of their home equity for the kid's down payment of $500k condo (2 or 3 bed depending on the plan, size and location) and renting out 1 or 2 bedroom when the kid was ready for home ownership.
This is not rich a couple. They both work, pushed themselves to get a descent home almost 20 years ago by stretching out their budget, and are still working hard to pay off the mortgage. However, for the kid who has an engineering degree and working full time, can't afford anything in OC without the parents' help.
I'm thinking this will get worse and become a norm for younger folks for starter homes. So if you don't have wealthy parents, it's pretty much impossible to become a home owner as a young professional...
socal78
Well-known member
I thought this was a very good article which touched on several important issues that affects everyone from the millennials, on-up, as well as the future of different fields here, the change in demographics (the elderly), etc. A highly recommended read:
Orange County's workforce loses Millennials who can't afford to live here
Orange County's workforce loses Millennials who can't afford to live here