[Wilton2ParkAve]

Originally Posted by nep321

$350K is a very high price for someone on a $75K salary. I don't count any bonus income as part of my monthly budget, because it's a one-time payment per year and I just stash it away. But based on my calculations, I can only afford a home up to around $240K and comfortably make monthly payments. This is very doable in Hartford County. In FFC, highly unlikely, unless it's Bridgeport or a crummy area of Stratford, etc.

You may not count it, but bonus is part of your income for the last time. It's not a one time payment if under most circumstances it is earned each fiscal/calendar year.

My annual bonus exceeds my base pay by a wide margin. Not surprisingly I do this amount into my budget (and stash away a piece as well).

[Wilton2ParkAve]

Originally Posted by Sigequinox

That's a lot for 90k. Many say house should not cost more than 3x income. General rule anyway. Plenty of variables. Taxes being the most inhibitory one.

Really depends on mortgage/interest rates. 4x in this low interest rate environment is pretty conservative actually, provided you lock.

[nep321]

Originally Posted by Wilton2ParkAve

You may not count it, but bonus is part of your income for the last time. It's not a one time payment if under most circumstances it is earned each fiscal/calendar year.

My annual bonus exceeds my base pay by a wide margin. Not surprisingly I do this amount into my budget (and stash away a piece as well).

Yes, but my annual bonus is variable. One year it could be 20%, another year it could be 10%. I wouldn't build a stabilized budget around that, I'm sorry. Instead, I keep it out of my budget and save it away and use it toward things like a home down payment, car down payment or vacation. Special items.

[Wilton2ParkAve]

Mine is quite variable. Still counts, come again. Stop rejecting reality and whining.

[Goose-boy]

Originally Posted by Wilton2ParkAve

Really depends on mortgage/interest rates. 4x in this low interest rate environment is pretty conservative actually, provided you lock.

Wouldn't it also heavily depend on property taxes in the area as well?

[INJEN78]

sorta on topic-
i was born and raised in eastern CT(newlondon, groton, colchester, norwich, and montville), moved to NH when i was 22, then to college at shortly after. ive been living in ohio(college) for the past 3 years and miss the hell out of CT, seems i cant figure out a place to move from here that will feel like "home", so im considering a move back.

[JayCT]

Originally Posted by Sigequinox

That's a lot for 90k. Many say house should not cost more than 3x income. General rule anyway. Plenty of variables. Taxes being the most inhibitory one.

That 3X rule is not accurate. I go by the 28% rule that most finance companies use to calculate what people can afford for housing costs (mortgage, taxes and insurance). For a $90,000 per year salary, the recommended maximum would be $2,100 per month. Assuming $585 for taxes and insurance leaves $1,515 for a mortgage payment. That works out to about a $320,000 mortgage at current 30 year rates. Assuming 10% down, this brings him to $350,000. This is a quick calculation and needs to be vetted further based on the OP's personal finances. Jay

[Serious Conversation]

Originally Posted by JayCT

That 3X rule is not accurate. I go by the 28% rule that most finance companies use to calculate what people can afford for housing costs (mortgage, taxes and insurance). For a $90,000 per year salary, the recommended maximum would be $2,100 per month. Assuming $585 for taxes and insurance leaves $1,515 for a mortgage payment. That works out to about a $320,000 mortgage at current 30 year rates. Assuming 10% down, this brings him to $350,000. This is a quick calculation and needs to be vetted further based on the OP's personal finances. Jay

If one were to buy a house in an area with lower property taxes, the budget could be stretched a little further.

[nep321]

Originally Posted by JayCT

That 3X rule is not accurate. I go by the 28% rule that most finance companies use to calculate what people can afford for housing costs (mortgage, taxes and insurance). For a $90,000 per year salary, the recommended maximum would be $2,100 per month. Assuming $585 for taxes and insurance leaves $1,515 for a mortgage payment. That works out to about a $320,000 mortgage at current 30 year rates. Assuming 10% down, this brings him to $350,000. This is a quick calculation and needs to be vetted further based on the OP's personal finances. Jay

Considering how high the property taxes are and the cost of oil heating, which most homes use around here, the maximum home price that I can currently afford on a monthly basis, assuming a 20% down payment, and factoring in a $75K salary would be around $220K. That payment would be about $1,487 per month in total. If the property taxes are a bit lower and maybe there's gas heating, etc, then I could probably afford up to $240K. That's the budget that I feel comfortable with. Don't forget, I have many other expenses and bills to pay as well. Housing is only about 30-40% of my monthly expenses.

And just for the heck of it, that would be about 3x my annual salary, as others have stated in this thread. I do not feel comfortable buying a $350K house on my $75K salary. That's outrageous and certainly not living within my means!

[nep321]

Originally Posted by Wilton2ParkAve

Mine is quite variable. Still counts, come again. Stop rejecting reality and whining.

If anything, I'm NOT rejecting reality. An annual bonus has the potential to vary greatly, at least in my company. It could be 20% one year. Another year it could be 0%. I do not feel comfortable relying on a bonus as part of my annual budget. Now, if the bonus was a fixed, stable amount, THEN maybe I could understand including it in your monthly budget. But to each his own. Personal finance is.....personal.