The Loan Book: Complete Step by Step Guide to Getting a Personal or Business Loan (Small Business Series)

by Jill H West on Wednesday, April 4th, 2012 | No Comments

Loan Small

Small Business Loans & Commercial Financing | Lendio

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loan small question by summer07: Seriously, would buying a house really be “overextending” myself considering what I pay now???
I want to buy a house. I pay over $ 900/mo for a 1bd apartment right now and I hate wasting my money on rent. I want a quaint little old house that I can call “mine.” I’m disgusted with people like Robert W & people off the web who tell me that my verifiable income of $ 32K/yr is “too small” for a house when I’ve been doing everything right(can’t help it that I’m being paid less than I’m worth).

Seriously, how can someone say I’d be “overextending myself” by paying $ 1100-1300/mo for a $ 150K house(mortgage + homeowners ins + prop taxes), when I’m already paying at least $ 1400/mo for car payment + 1bd apartment right now??? If anything, paying for a house(by the time I buy a house, my car loan will be paid off) will be easier for me than paying for my car + apartment right now. Also, I live very VERY frugally…my living expenses are minimal. Hells, I don’t even have cable!

Here is a breakdown of my bills:
** I have a verifiable income of $ 32K/yr(full-time office job + part-time waitressing job). However, most of the tips from the waitressing job aren’t verifable, so although one can only “prove” that I make $ 32K/yr, I actually make $ 45-46K/yr.

** That means I make about $ 3200/mo.

** Please note that my car payment is in the $ 400s BUT I purposely pay $ 1500/mo so that I will have it paid off very early. I’m doing this to lower my debt so that I’ll be better suited to buy a house. If it weren’t for my strong passion to buy a house, I wouldn’t be working myself so hard to pay off the car loan so early. Buying a house is my #1 motivation for working so hard at my car loan.

So here’s how I pay the bills each month:

$ 905 rent
$ 1500 car loan
$ 105 student loan

$ 20-25 electric
$ 55 phone bill
$ 100 food (I eat cheaply)
$ 78 mass transit (yes, I save gas money + help the environment by taking the bus instead of driving 100% of the time)
$ 80 car insurance
$ 100 gas
$ 100 misc
$ 150 spending money (anything I end up not spending goes into savings)

I will have the car loan paid off in <6mos. Once I have the loan paid off, I will continue to sock away $ 1500/mo...only instead it will go towards savings for a house. I also get extra money from tutoring students(not consistent though), and from sharing my already-tiny apartment with a friend that travels a lot for work and offers me money to stay at my place. This friend also pays me for the benefit of allowing her to use my residence as a mailing address + keeping her stuff stored at my place while she's on business trips. I'm not counting these money sources since they're inconsistent, but all that money goes into savings too. As you can see, if I can aptly pay over $ 2400/mo for apartment + car loan, then surely I should be able to pay $ 1100-1300/mo for house costs. I'm obviously not an overspender...if anything I'm an overworker/oversaver who pays off her debts early!! ROB W, WHAT U THINK OF THAT?? OKAY GUYS I ALSO HAVE GOOD CREDIT TOO. My credit scores are in the 710-735 range. ROB W, yes I know that I am not obligated to stay at an underpaying job, but that doesn't mean that it's easy to find a job that pays better. Yes I am looking and yes it would be nice to make more money, but I've had horrible luck all my life being able to demand what I'm worth. Trust me I'm angry and bitter about it. And no I'm not going to wait a long time to buy...then prices will skyrocket! Perhaps I should find myself a husband and buy with him. Hmmph...maybe my key to buying a house is to attend charm school and keep up a good appearance to attract a potential suitor! With the way you guys talk, it makes me feel like I have ZERO chance to ever get a house even though I try real hard. So basically everyone is saying that if I buy, I will most likely face foreclosure and be a struggler. Okay here's another question. What if I got unexpectantly pregnant? Would I be able to handle raising a kid with my income and budgeting/discipline/maturity level, or would I be a "struggler" with that too? Would I be fit to raise a kid or would I be "better off" ditching my morals and getting an (evil, evil, evil) abortion? I'm in my mid 20s by the way. Not that I am pregnant, just curious what you guys think if you guys already think I'm "not fit" to buy a house. loan small best answer:

Answer by AM-NM centaur
Your housing payment should not exceed 1/3 of your gross income before taxes. In this situation you are overextending yourself and are unlikely to qualify for a mortgage.