Approved for a $200k mortgage, but I am unsure if we should take it!

Approved for a $200k mortgage, but I am unsure if we should take it!

Erin and I have been approved for a $200,000 mortgage, but the payment will be $1,971. This payment worries me because we have existing debt, which I cannot restructure without compromising the mortgage application, leaving us in what I see as a precarious financial position with little wiggle room.

Long story short, our net income is roughly $5,000, and our current debt payments amount to $1,000, so between the mortgage, assuming we buy a home for $200,000 and the other debt payments, that accounts for 60% of our net income. I find myself annoyed and stressed out because I specifically told the loan officer that I planned to consolidate all our credit card payments and existing loans into a single loan, bringing our monthly payment down by 40—45% and making the mortgage more affordable.

Now that we are applying, I cannot make any changes to our debt structure, something that I wish the loan officer had told us before we paid her $150 for credit checks. We cannot realistically proceed with losing 60% of our net income to debt payments, leaving us just $2,000 for everything else, including contingency for issues with the home, which we will be on the hook for being a homeowner.

Our loan and credit card debt totals almost $28,000; and over 360 months, we will pay $710,000 in mortgage fees. If I live that long, I will be at the ripe old age of 77 when the mortgage is paid off. And because house prices are inflated right now, I am concerned we will end up losing money even if we sell

Miss Annie, our realtor and a family friend, looked over the mortgage company’s fee worksheet and said there were excessive fees. She suggested that we look at other options, as she thinks we can do better. I am inclined to do this, but after some financial restructuring, I feel it is necessary to put ourselves in a better position to move forward with buying a home without increasing our overall credit card debt.

Of course, if we can limit our mortgage to $150,000, our payment will be $1,560, which will be only $205 more than our rent from June 2024. This rent increase is one of the main incentives to move, either renting elsewhere or buying a home. When we moved into this ghetto-adjacent house in 2013, rent was only $800, and in the past 3 years, under the third owner in 11 years, despite many deferred maintenance issues, rent has increased by over $450, which I am not willing to pay to live in this area.

None of this is urgent; we have two months before we have to renew our lease, and we can sign a month-to-month lease for just $10/month extra to allow us time to make our choice, whether it’s a different rental home or buying a home; it has to be this year though, we don’t want to be in this house in 2025.

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