How much house can I afford with 100% P&T as my main source of income? + roommates + Gi Bill during semesters

[minh0256]

Young Vet need advice for first time home-purchase

Currently, I use my GI Bill with around 2 years of school remaining until I get my bachelor's of Computer Science. My mother is blind and I was likely going to claim her as a dependent as I care for her so I may have a little bit of help from her in the form of her social security that she may offer to help me with rent (approx 300$ of help with rent + 200 for being a dependent).

I may drop back down to 90% once I start working because I am currently TDIU and trying to get back into the workforce. I am in a property tax exemption state (San Antonio TX) and can later file a secondary claim I have been putting off to try to get that exemption back at some point (I just didn't see the point in filing now under the current circumstances).

I also currently have no debt and about... 53k saved. My credit is around a 770. I was thinking I could maybe swing a house with my VA loan of 265k max; however, I am having difficulty being able to assess what would be a responsible house price that I may be able to afford. I would really value input from people more experienced than me as this would be my first home purchase and I don't really have a financially savvy family background.

I think I may have a special condition code so I receive around $4158 from my conditions + Gi bill during semesters + 500 (my mother helping with rent + dependent) and my girlfriend says she would be willing to pitch in 500 a month as well to help.

 

[groundedglitz]

@minh0256 Husband is a MLO specializing in VA loans. I have insomnia so am wide awake while he’s snoozing away. Will ask him his thoughts when he gets up.

 

[groundedglitz]

@minh0256 Okay, husband is now awake. He doesn't "do" Reddit (LOL) so I am sharing what he's dictating to me. Before we get started, let me confirm that he is a MLO but is not your MLO, and any info shared is just to help answer your question. This is a long reply, sorry!

The only real way to find out what you qualify for is to apply with a lender, which will require you to submit documentation - your disability award letter, maybe a DD214, 30 days of bank statements, DL or govt ID, any W2s / work history if any from the last two years (or two years' school transcripts proving you're a full-time student if no work history) and a credit pull.

Concerning income from your mother and girlfriend, you cannot list that as qualifying income as they will not be on the loan. VA also will not allow educational benefits to be included in qualifying income. The only qualifying income is any employment income and disability benefits.

On the property tax exemption, typically states will require you be in the home by Jan 1st to qualify for the exemption. Therefore, from a lender standpoint, you would have to generally qualify for the loan WITH taxes included. Once you get the exemption, you go back to your loan servicer to provide proof of exemption and have that removed from your escrow after closing.

As for a responsible home price, the thing to think about is your debt-to-income ratio (DTI), as it is the biggest factor that gets people denied for loans. You say you're debt-free, however, you need to be sure. If you have any recurring expenses like student loans, childcare, child support, tax liens, IRS payments, etc., that will count against your DTI calculations. Also be aware that DTI is calculated on not only what obligations you have now EXCEPT for current rent, but on those obligations PLUS your proposed home payment which includes principal, interest, taxes (even with the tax exemption as discussed above), insurance, and HOA if applicable. Further, VA requires you to have "residual" income (an amount that must be left over after paying all bills including the house payment) based on the square footage of your home, how many dependents you have, and a number of other factors.

That being said, just based on the info in your post and off the top of his head, husband says it sounds like you should qualify for a loan but can't give you dollar estimate due to rates, points, taxes, DTI, and other factors. You can try to estimate affordability using a mortgage calculator but the fastest and easiest way to find out what you can afford is by applying with a lender. Also, don't go to a retail lender (for example: big banks, Rocket), but go with a broker who is going to have far more flexibility.

Hope that helps but if you have other questions, please DM me and I will share with him, as I don't wanna get in trouble with the mods.