How can we possible afford the mortgage on a 500k house with only ten percent down?
September 26, 2011 8:47 AM Subscribe
Home Loans Question: How can we possible afford the mortgage on a 500k house with only ten percent down?
posted by 2legit2quit to Work & Money (36 answers total) 3 users marked this as a favorite
I am giving the following background only to explain WHY we would possibly want to attempt this feat. We are trying to buy a home in a particular neighborhood that is in the heart of one of the largest transportation/redevelopment project in America. The neighborhood is already very nice, but will be substantially nicer once the project is completed. We would like to live in this area very long-term as this area will have features/amenities that would not be available anywhere else in the metro-area. There is one small neighborhood in this area with houses, the rest is massive condos and other developments. For a variety of reasons, we do not want to live in a condo, particularly long term. The values of the houses in this particular neighborhood have began to increase, from around $600,000 to the 800-950s over the last ten years--which is amazing considering the last ten years. There are also some outliers in the 300k range and in the 1.5 million+ range. We are trying to buy one of the few houses in this area before we are priced out of the market and would like to live there 20+ years.
We are focused on purchasing a house in the 400-600k range. We only have about $50,000 for a down payment. My wife and I are both highly compensated, but are very young in our careers. When we met with a real estate agent, he said that it would not be a problem and could definitely get into a house in this neighborhood with our employment and the down payment. I don't understand how we can possible afford the mortgage on a $500,000 house with only 10% down. Are there programs/types of loans that I simply don't know about as a first-time home buyer. We are comfortable with paying an interest only loan, or anything else that would allow us to get in the house, because we would expect the value of the house to raise proportionately with whatever additional expense that adds, in no case are we willing/able to spend more that $3,000 for the next five years.