Online House Hunting

I make $18.76 an hour.Can I afford to buy a house in Tampa Florida?

Single,have 10K in Roth Ira I can tap if needed for down payment plus there is a tax credit of 8K available to 1st time home buyers like me.

Public Comments

1. Please talk to a good lender. You should interview a couple of them, and make sure that the person you talk to will be servicing your loan after closing. Figure roughly $70 per $10k in value for your principle, interest and mortgage insurance. It may be slightly higher or lower depending on your area's tax base and the interest rate you receive, but it is a good rule of thumb. Look at your local home listings, see if the homes in your area are appropriate to your income with this simple calculation, and then interview a couple of Realtors to find one that is comfortable for you to work with, knowledgeable about your situation, and who offers you good service and sound advice. Good luck!
2. There are two easier rules for affordability. One is that you can afford a mortgage between 2x and 3x your annual salary. If you legitimately work full time, 40 hours a week and 52 weeks a year, your 'salary' is $39,000 per year meaning you could afford a mortgage of $78,000 to $117,000. Looking in more detail, you should follow the 28/36 rule. No more than 28% of your gross monthly income in a housing payment and no more than 36% of your gross monthly income for all debt payments. These ratios are affordable and even though some lenders might let you exceed these, I'd recommend against it (some lenders during the boom allowed more than 50% debt to income ratio and we all see how well that turned out). A housing payment is comprised of 4 or 5 items. Principal and interest (don't take out an interest only or ARM loan), homeowner's insurance, real estate taxes and private mortgage insurance (if putting down less than 20%). Any amortization calculator can give you information about principal and interest payments, but the real wild cards are homeowner's insurance and real estate taxes. I live near a coast, too, and insurance is very expensive and can expose you to a lot of financial liability. Real estate taxes can also vary wildly - I have personally seen anywhere from 0.5% of value per year to 4.5% of value per year. Making some huge assumptions I could give you an estimate for housing price, but it would be just that, an estimate. Your housing payment should be maxed out at $840 per month. I'd guess that homeowner's insurance in Tampa, FL even for a $100,000 house would be $100 a month, real estate taxes would be $125 per month, PMI would be $75 a month leaving only $540 for the actual payment, meaning at 5% interest you could borrow, at most, $100,000. So, if you can find a house for ~$100,000 in Tampa, then you can afford it! good luck!
3. I think you are more likely to afford a condo. Houses go for $150,000 and up in a decent neighborhood. Get a two bedroom 2 bath condo and rent one bedroom to someone else to help pay the mortgage. Sit down with a lending officer and see how much mortgage you can qualify for. I would think probably $70-$80 K.