Having student loans alone does not preclude you from qualifying for a loan.  The problem as you have already figured out is the monthly payment.  How much the bank will allow you to pay monthly for a loan is reduced effectively by how much you are paying into your loans. Your best bet is to talk to a bank and find out the real story for sure. 

Just as an aside, did you see that Obama has hopes of signing into law that student loans will be forgiven in ten years if you are in public service and in 20 years if not?  Just something to think about for the long term.
Overall it sounds to me like have a great income.  You may want to consider renting for a year or two and paying off as much of the loans as you can.  It improves your credit and will allow you to pay less per month. 

When I graduated school I had the same situation.  Here is what I did.  I paid the minimum on the loans and then when I had saved up enough to pay off one of the loans (usually the smallest) I did so.   Then it lowered my monthly.  If you can just do this a few times your monthly starts to drop and gives you more money to save toward the next loan.  In a year or two the monthly goes down, you get a raise or two and viola, now you qualify for a bigger home. 
Just a thought. 

Best of luck,
Rob

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www.robgrahamrealestate.com

The best real estate search feature on the web!

Join us September 15^th  and October 20^th for the final installment of our 2009 Family Finances Series, “Budgeting in Real Life” with Mindy Crary, MBA, Certified Financial Planner®. The course will identify the many pitfalls that make money-management in everyday life such a challenge, and provide realistic solutions to stretch your dollars a little further.  We all have clients who are struggling to save up for their down payments or simply want to be more financially savvy – please extend this invitation to them!

To register for the course call: 206.789.8629 or email: Jessica@salmonbaylending.com

Both sessions will be held from 7:00-8:30pm at Salmon Bay Community Lending:

1502 NW 52^nd St.

Seattle, WA. 98107

Suggested donation: $10

Space is limited, so reserve your seats early!

Ruby Grynberg

Chief Loan Officer

Salmon Bay has offered a variety of classes in the past on many financial topics.  Feel free to contact them if you have any interest in finding out what else is available.

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Rob Graham, Accredited Buyer’s Representative

Windermere Real Estate

206-321-6349

robgraham@windermere.com

I had a great question from a client of mine regarding shopping for a  Seattle condo in a complex that is not FHA approved if your lender has pre-approved you for an FHA loan. 

It is a fantastic question given that FHA is by far the most popular kind of home loan right now.  The reason for this is that it offers the lowest down payment required by the industry, currently 3.5%.   All but two of my current buyers (the rich ones) are approved for FHA loans. 

Condos also represent some of the best and most attractive options for first time home buyers, downsizers and people looking for investment property.  Condos have not seen the recovery that single family homes have yet and many can be gotten for a fraction of what they were worth two years ago. 

So What Is an FHA Loan?  Don’t worry about it.  Suffice it to say it is a specific kind of loan that is backed by the government not private industry.  It offers a low down payment and has greater flexibility on how much a seller can pay for closing costs and where the money for a down payment can come from. (ie. family)

The Federal Housing Administration (FHA) has more stringent guidelines about which condos qualify for an FHA loan.  Basically they want to make sure that it is a good investment.  Some of the items the FHA will site for not allowing a specific condo complex to qualify for FHA financing are:

• Low cash reserves for capital improvements
• Too many rental in a complex
• Pending law suit against the association or builder
• High vacancy rate for new construction
• Pending special assessment
• Essentially anything that threatens the financial health of the association

To try to streamline the process, the FHA publishes a list of associations that are pre-approved for FHA loans.  These tend to be the larger and more well established associations.  But neither the FHA or smaller condo complexes have the capacity or incentive to get the pre-approval.  The Seattle area for example has hundreds of condo complexes.  I have seen the list of those approved for FHA loans and there are only a few dozen on the list. 

If you have an FHA approval and fall in love with a condo in a non FHA complex, that is not the end of the story. 

Because so few associations are approved, there is what they call a spot approval.  Any association representative can fill out the checklist and get it back to the listing agent.  A smart listing agent starts asking these questions when they take the listing but many do not.  If everything on the spot approval passes the FHA guidelines you can proceed as if the complex had FHA approval.

Bottom line:

Even if you have been pre-approved for an FHA loan, don’t limit your search to only

FHA approved complexes.  It requires a little extra gymnastics on

our part to get the approval, but that is why they pay us the big bucks.

Give me a call if you need help.

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Rob Graham, Accredited Buyer’s Representative

Windermere Real Estate

206-321-6349

robgraham@windermere.com