All Forum Posts by: Bill B

i apologize if i suggested something illegal or unethical. i just figured if all the appropriate taxes were being paid it would be okay, at least before a tenant moved in, kind of like a contractor working out of state and paying all the proper income taxes for the place he works and the place he lives. anyway, thanks again for all the replies and ill probably be back here for more advice in the future - ni the meantime ill look at smaller banks and/or credit unions and talk to some family in the area about local lenders they've worked with. definitely want to do this the straightforward/honest/legal way!

thank you for your quick reply! i really appreciate the information as i think more about making this idea a reality. i think i would be comfortable with 15% down as i would still have about $15k in the bank for emergency savings or miscellaneous items. surprisingly (or maybe not if you're familiar with the midwest real estate market), aside from some missing copper pipes a lot of these $30k-$40k homes are in nearly move-in conditionj.

would calling the house my main residence (getting a driver's license in ohio at that address, etc. yet just never being there) work to change the loan conditions and benefit me? i realize there may be income tax implications as a result, but is an owner-occupied mortgage different and/or better in this circumstance?

i just think having a 3BR/1BA house in a city with friends and family for about $180 plus utilities is unbelievable and would be a great investment in this time of somewhat uncertainty, and i could move into it and live cheaper than renting a 1BR - how could i go wrong? seems foolish to let my $25k sit in a less than 1% interest savings account when it could be invested in a property. any thoughts on that concept as well?

thanks

hello,

this is my first post, and i'm trying to learn as much as i can, but here is my situation: i currently live in chicago where i work part time and rent an apartment. my total bills are around $800 a month ($400 for rent plus utilities, $100 for phone/internet, $150 for health/car insurance, and $150 in student loans), i have about $1200 net income per month, i have no credit card debt, and a paid off vehicle. i do have other miscellaneous expenses every month of course, such as gasoline, groceries, and dining out, but i'm pretty thrifty overall. i am planning on finding full-time work in the near future so my income should increase by at least 50% as a conservative estimate.

i do not want to purchase a house in chicago, yet i want to live and work here for the time being. i am interested in purchasing a single-family home in ohio where i am from and where i have family and friends. the idea is to have the property to fix up or update as necessary and then rent out to a friend or friends, and maybe eventually move into it in the future if the job market in ohio recovers.

many homes i have been looking at are in the $40k range. i have about $25k in the bank, so here's what i'm thinking: get a mortgage loan for the $40k, and put about 20% down. that will leave me with about $17k in the bank and should give me a manageable monthly mortgage payment. i know i will also have homeowner's insurance, taxes, and utitlities to pay, but i think i can manage if i get someone into the house and renting it within a year or so.

now, is it even possible to get a $40k loan these days? is my relatively low income a problem? what of my expenses are included in the debt-income ratio many lenders look at (i believe my credit is in excellent shape)? would the $25k i have in the bank and a 20% down payment be enough to convince a lender that i am a trustworthy borrower even with relatively low income? how would you proceed with this investment/purchase?

thanks for your help and advice!