Is our income enough for a new home? (tired of rising rent :( ) (Early: real estate, foreclosure)

[stubbs4prez]

Sent you a Direct Message with a recommendation of a mortgage broker you can call to get all your questions answered.

[CptnRn]

Originally Posted by EzPeterson
Add to that the tax advantages of the mortgage interest deduction and you really won't be spending much more than what you are right now.

Originally Posted by mickey65

Isn't the government thinking of eliminating this soon?

Theoretically every tax deduction could be on the table. But that one is so highly popular its not likely to be taken.

[Tralfaz]

Originally Posted by sinking

You have 65k total after taxes or 65k each?

Yep, $250+ is a bit rich for $65k total income if you ask me.. My recent home purchase was at a price/income ratio closer to 1.8 (lower if unpredictable bonuses are included), and 2.5-3 is more typical. And this is not factoring in having to stash $$ away for kids' future needs or any large expenses (such as emergency roof replacement, etc)..

Still, with my decent (not great) credit rating I ended up with 3.375% rate at 5% down, and all in my combined PITI comes to about $200/mo more than my last house's rent. I could have put down 20%, but it's nice to have the cushion of cash even if it costs me about $95/mo in mortgage insurance for a few years (I reckon if all goes well I can get principal to 20% in 2-3 years, maybe sooner if bonuses are healthy).

[wendyscott]

For me there is two types of income - the actual income and the relative income. Actual income is the one which you earn - it comes from cents until dollars or thousands but real income is on what you spend. Sometimes, there is no small r big amount of money. It all depends or where your expenses is going.

[austin0]

Originally Posted by wendyscott

For me there is two types of income - the actual income and the relative income. Actual income is the one which you earn - it comes from cents until dollars or thousands but real income is on what you spend. Sometimes, there is no small r big amount of money. It all depends or where your expenses is going.

very true.. and.. there is only one source of actual income but many hidden and surprising avenues for spending.. always better to buy a home less than what your banker can lend you.. Also, be careful going with multiple bankers because if everyone start pulling your credit report, your interest rate may go up by the time you are ready to purchase a house.

[ang3ldu5t]

I would say that the rule of thumb for most people is that you should have enough for 20 percent down when you buy the house. BUT, that doesn't mean you should take out all of your liquid savings. Even with the 20 percent down covered -- you should still have enough in savings to last you 8 months in case something happens (e.g. unemployment, death).

But yes, factor in your home insurance and see how it comes out for you.

Don't let the mortgage lender determine how much you should spend (they want more of your money) -- go with what you feel comfortable spending.

Don't forge that a bigger house comes with more furniture, more maintenance, more of everything. It's exhausting. :-p

[10scoachrick]

Originally Posted by ang3ldu5t

I would say that the rule of thumb for most people is that you should have enough for 20 percent down when you buy the house. BUT, that doesn't mean you should take out all of your liquid savings. Even with the 20 percent down covered -- you should still have enough in savings to last you 8 months in case something happens (e.g. unemployment, death).

But yes, factor in your home insurance and see how it comes out for you.

Don't let the mortgage lender determine how much you should spend (they want more of your money) -- go with what you feel comfortable spending.

Don't forge that a bigger house comes with more furniture, more maintenance, more of everything. It's exhausting. :-p

Good advice...the OP(and others) should shop for insurance and bundle with auto coverage in many cases. Our darned good insurance on a $420K house is just barely $1000/year; so not a drop in the bucket, but a whole lot less than our water service charges for each year! Of course, OP is looking at +/- $4K a year for property taxes...the gift that keeps on giving.

[ang3ldu5t]

Yes, lovely ol' property taxes! Had to pay ours a few weeks ago (EARLY!) because we were refinancing. Had to scrounge up that $5,000 with a quickness. LOL.

[ericsami]

well there are two conflicting views that i am gone give you.

the interest rates are the lowest. if you are willing to say to new cars. it is safe for you to buy a house at 220 range.
my parents are in the same income range.

but a house is money pitt. you constantly want put extra crap that you never thought of into it.
----
but it sounds like you guys are young. buying a house will mean you are stuck where you are pretty much.
you will avoid alot of jobs because you dont want to drive a whole lot.

because you you are young and you have no kids. my guts tells me stay without the house.

just have some discipline to save some money. that will keep your options open to moving outside the city or within the city when you get a new job.

[tickledpink]

Don't count on being able to take the tax deductions that come along with owning a home. For my husband and me, the standard deduction was still better than the itemizing with the home deductions we could take.

But, we have a low interest loan (3%) and only pay about 3500 in taxes, so if you have a more expensive home it could be in your favor.