I'm fresh out of college, making $28,000 per year with a wife, a child, and a second child on the way. We currently live with my mother-in-law who helps us with childcare expenses. However, the section of the house we live in is too small for another child, so we are building a house.
We were able to buy property across the street from my mother in law's and it is paid off. My Father in law is a general contractor who has built more homes than I can count. He has offered to build a home for us and not charge labor (according to him, about 50%) the cost of a house.
I'm trying to get an idea about what size mortgage would be manageable for us. Currently we don't really have credit card debt ($200 that is being paid off by the time the house it build), and I have a car payment of $140 per month. I have student loans, but am currently on Income based Repayment for $0 due per month right now. Once the kids are in school my wife will go back to work and I will hopefully have moved into a better paying position at a new company by then.
My problem is this: Right now, our financial situation is not great, but within the next 5 years it should get quite a bit better. However, we can only benefit from the free labor offered to us if we build a house now (her father is probably retiring in the next 2 years). So what can we afford? I've struggled with doing the math knowing that the next fews years will be tight, but worth it in the long run.
One last note, We have about $12,000 in savings we were going to use for a down payment, but the mortgage officer we spoke with the other day said we could use her dad's labor as a "gift of equity". Meaning that if he builds a $200,000 house, our mortgage is roughly $100,000 since labor is not being charge, thus we have essentially made a $100,000 down payment.
Submitted May 19, 2017 at 01:00PM by BuildDatHouse http://ift.tt/2qFPYHd
