I closed on my house in July 2015 – this is the current house my family lives in. We paid 129,500 closing price and I currently owe 120,000 on it today. It appraised for 140,000 at the time of sale. My full payment as it stands today is $ 911/month. 4 bed / 2 bath, around 1600sqft. Acre lot.
On a sheer whim, my DW and I were looking at a new neighborhood going up nearby (a mile from my current home probably) and these houses are A-MAZING. Needless to say we want one. We are looking into a 6 bed / 4 bath, 3700 sqft. This is the dream home and it starts at 275,000. The subdivision is about 20% developed today.
After walking some models for fun and getting brochures, we are in love. So much in love that I called one of their preferred lenders and was preapproved for 300,000. 95% conventional, 700 middle score. I make 96k a year and I would be the only one on the loan. 30 year fixed at mid 3’s rate.
First and foremost, I don’t have $ 15,000 at the moment. Had a big push this year to pay down debt and monthly costs. Because of this however, my DTI is great. I have only my mortgage and my car payment (620/month) as obligation, my credit card obligations are very low. The lending company said I could either sell my current house or keep it and lease it out. Either way is fine because my DTI with both my current mortgage and my new estimated mortgage at 300k (she said about 1850/month) was right at 43%.
Problem is money of course. Build time is typically 6 months on these houses and I can comfortably save $ 1500/month. I can stretch myself and save $ 2000/month, but it will be tough. I also have an extra check next month (getting paid bi-weekly trick where I get so far ahead, that I have free spend of 2 full paychecks a year) which will be $ 2600 saved. There is also yearly bonus coming December time of an unknown amount. My estimate is $ 4000 conservatively. Then there is my tax return which last year was $ 6000, still an unknown.
Ideally, I’d like to rent my house and keep it, because it is a perfect rental property that could easily go for 1000/month minimum. Otherwise I sell the house for an unknown amount and for unknown profit because of closing costs eating into whatever equity I actually have.