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Old 03-26-2015, 05:59 PM
 
Location: Denver, CO
1,627 posts, read 3,713,235 times
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Quote:
Originally Posted by Willy702 View Post
You really can't afford $1200/month with a $66k salary and you tell us you are in finance? Sounds like budgeting issues, not "net income" issues. You must have a very large student loan to pay off?
Actually, you can afford $1200/month on a $66k salary...but that includes some "ifs". Usually "ifs" involving not being (too much) in debt and generally living within your means.

$1200/month is about 21% of 21% of an income at gross $5500/month.

That said, some of us (myself included) have made some bad decisions that, at least at one time, made that a more difficult target to hit (21% of my income would not be very good while having a high debt to income ratio, which I used to have.)

But for those that are in control of their finances, it should be achievable and (job market permitting) sustainable.
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Old 03-26-2015, 07:03 PM
 
Location: Denver, CO
2,391 posts, read 1,802,118 times
Reputation: 1920
Quote:
Originally Posted by Willy702 View Post
You really can't afford $1200/month with a $66k salary and you tell us you are in finance? Sounds like budgeting issues, not "net income" issues. You must have a very large student loan to pay off?
I budget just fine and that's exactly why I'm saying I can't afford a place in Denver Metro on this salary. I could follow headedtoDenver's infallible logic and sound financial advice and spend 40-50% of my net income on a place, but I refuse to be house poor. I actually want to be able to live after I purchase a home. My student loan payment is about $275/mo. That is the only debt I have.

Besides, I never said I couldn't afford $1200/mo. That was another false implication put in place by headedtoDenver during this discussion. That would my my maximum that I'm willing to pay. Ideally, I'd be somewhere between $900-$1000/mo. Again, that's so I can be financially responsible and still live a somewhat interesting lifestyle (i.e. not sitting at home watching Netflix and eating Ramen).
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Old 03-26-2015, 07:23 PM
 
2,409 posts, read 2,632,287 times
Reputation: 1807
Quote:
Originally Posted by Lafleur View Post
I'll echo the sentiments of just about everyone else here. I make about $66k/yr, which is a pretty good salary in most of the country and well above the median individual income. But here in Denver Metro, with the COL skyrocketing as it has been and the housing stock diminishing (around 4k single-family homes available as of last December), I feel stuck as a renter. If you're having thoughts about whether you can afford something on $100k/yr, what does that say for the rest of us?

I guess the only way to be able to afford a single-family home in Denver is to A) make a lot of money (apparently a lot more than $100k), B) have dual-incomes (get married ASAP), or C) have roommates in your house.
Um no. Just about anyone can afford a single-family home in Denver with income of 66k. There are plenty of houses around 250k-300k which a 66k single income can support without kids. If you can't, that's a matter of priority rather than affordability.
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Old 03-26-2015, 07:58 PM
 
5,444 posts, read 4,826,992 times
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Quote:
Originally Posted by Lafleur View Post
I budget just fine and that's exactly why I'm saying I can't afford a place in Denver Metro on this salary. I could follow headedtoDenver's infallible logic and sound financial advice and spend 40-50% of my net income on a place, but I refuse to be house poor. I actually want to be able to live after I purchase a home. My student loan payment is about $275/mo. That is the only debt I have.

Besides, I never said I couldn't afford $1200/mo. That was another false implication put in place by headedtoDenver during this discussion. That would my my maximum that I'm willing to pay. Ideally, I'd be somewhere between $900-$1000/mo. Again, that's so I can be financially responsible and still live a somewhat interesting lifestyle (i.e. not sitting at home watching Netflix and eating Ramen).
I never said you couldn't afford 1200 dollars a month. Heck, I was the one saying that you COULD/should be able to afford it, but you followed it up with all the crap over gross vs net income. For someone with a background in finance, you really have a hard time with numbers.

Also, your logic about how you feel that housing is too expensive is what is baffling to a lot of people on here, myself included. Seriously, do some research and you will find that there are very few large cities (Denver is the 22nd largest city in the US, I believe) where anybody on a 66K a year salary would be able to live and that includes just renting. Most people would live outside the city and commute in.
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Old 03-26-2015, 08:02 PM
 
Location: Denver, CO
2,391 posts, read 1,802,118 times
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Quote:
Originally Posted by AmFest View Post
Um no. Just about anyone can afford a single-family home in Denver with income of 66k. There are plenty of houses around 250k-300k which a 66k single income can support without kids. If you can't, that's a matter of priority rather than affordability.
This is the problem on this sub, I'm learning. People here are essentially advising people to be house poor. I could afford a whole bunch of house. According to the last broker I spoke to, with my credit score (about 780) and income, I could be financed up to about $350k. Yeah, sure, if all I want to do is sit around my house watching Netflix and eating Ramen.

My priority is to actually have a life and to have money after all expenses in case of emergency. Or, you know, some leisure from time to time.

Be advised people. From somebody who is actually in finance and does an excellent job with his own personal finances: There is a huge difference between what you can afford and what you can afford wisely. You SHOULD NOT put yourself into such a hole where your mortgage payment is eating up more than 30% (maybe 35% max) of your NET income. Again, gross income does not matter because it's not what you actually bring home on a month to month basis. What's the point of using that figure when you won't actually have all of that money to work with?
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Old 03-26-2015, 08:10 PM
 
Location: Denver, CO
2,391 posts, read 1,802,118 times
Reputation: 1920
Quote:
Originally Posted by headingtoDenver View Post
I never said you couldn't afford 1200 dollars a month. Heck, I was the one saying that you COULD/should be able to afford it, but you followed it up with all the crap over gross vs net income. For someone with a background in finance, you really have a hard time with numbers.

Also, your logic about how you feel that housing is too expensive is what is baffling to a lot of people on here, myself included. Seriously, do some research and you will find that there are very few large cities (Denver is the 22nd largest city in the US, I believe) where anybody on a 66K a year salary would be able to live and that includes just renting. Most people would live outside the city and commute in.
You're wrong on all accounts. I'm very good with numbers and that's why I have anywhere between $500 and $1200 left over each month after ALL expenses and entertainment are paid for. Knock that figure up to about $2700+ when I have a 3-paycheck month. I am very good with money, because I learned some valuable lessons when I was much younger. That's why I don't advise using gross income to determine what you can afford. Can you even tell me why you would, other than that's because that's what the banks do? You don't bring all that money home, so it's irrelevant. What you bring home each month IS relevant, because that is actual money you have to spend.

I don't think it's wise to spend 50% or more of that on your mortgage. What if you have an emergency? What if you need to take a trip? What if you need to replace something expensive in your home or on your car? It's not financially wise to do what you people are suggesting.

$1200 is reasonable for someone on my income, at a maximum. But nobody here has proven that this can be found in the metro area. The only ad you provided was from some rent-controlled, 600 sq ft unit. If they exist for regular folks, where? And if you can, will my life or property be in danger on a daily basis? In other words, is it in the "hood"? Can anybody suggest where one might find something in the range of $900-$1000 month? Because all I'm seeing so far are insults about how surprising it is I'm in finance and how I must be terrible at budgeting. Nobody has actually proven anything yet.
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Old 03-26-2015, 08:19 PM
 
5,444 posts, read 4,826,992 times
Reputation: 15030
Quote:
Originally Posted by Lafleur View Post
You're wrong on all accounts. I'm very good with numbers and that's why I have anywhere between $500 and $1200 left over each month after ALL expenses and entertainment are paid for. Knock that figure up to about $2700+ when I have a 3-paycheck month. I am very good with money, because I learned some valuable lessons when I was much younger. That's why I don't advise using gross income to determine what you can afford. Can you even tell me why you would, other than that's because that's what the banks do? You don't bring all that money home, so it's irrelevant. What you bring home each month IS relevant, because that is actual money you have to spend.

I don't think it's wise to spend 50% or more of that on your mortgage. What if you have an emergency? What if you need to take a trip? What if you need to replace something expensive in your home or on your car? It's not financially wise to do what you people are suggesting.

$1200 is reasonable for someone on my income, at a maximum. But nobody here has proven that this can be found in the metro area. If so, where? And if you can, will my life or property be in danger on a daily basis? In other words, is it in the "hood"? Can anybody suggest where one might find something in the range of $900-$1000 month? Because all I see are insults about how surprising it is I'm in finance and how I must be terrible at budgeting. Nobody has actually proven anything yet.
Jesus man!! Where do you keep coming up with this 50% nonsense. Also, concerning gross and net, yes I fully understand the difference. I was using gross because I don't know what all expenses you have, but to have the difference go from roughly 20% (gross) to now your 50%(net) figure, you obviously have more expenses than just your 275 a month student loan. Again, who knows, which is why I was going by gross, because it is a factual number that you have presented to us. This is why most people use gross when looking at long term figures. Obviously, if you are sitting in Best Buy looking at TVs, you are going to look at the money in your bank account to see if you can afford it. This is common sense and yet you keep dwelling on it.

Also, I HAVE proven and even gave you a link to a place that can be had for 1200 a month. You just chose to not like the place, which is your prerogative, but to say that there are no places out there is a flat out lie and you know it is.

I'm done with this conversation because pretty soon, 1200 a month will be 75% of your net income and you will still be whining that you cannot find a place downtown to live.
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Old 03-26-2015, 08:22 PM
 
2,409 posts, read 2,632,287 times
Reputation: 1807
Quote:
Originally Posted by Lafleur View Post
This is the problem on this sub, I'm learning. People here are essentially advising people to be house poor. I could afford a whole bunch of house. According to the last broker I spoke to, with my credit score (about 780) and income, I could be financed up to about $350k. Yeah, sure, if all I want to do is sit around my house watching Netflix and eating Ramen.

My priority is to actually have a life and to have money after all expenses in case of emergency. Or, you know, some leisure from time to time.

Be advised people. From somebody who is actually in finance and does an excellent job with his own personal finances: There is a huge difference between what you can afford and what you can afford wisely. You SHOULD NOT put yourself into such a hole where your mortgage payment is eating up more than 30% (maybe 35% max) of your NET income. Again, gross income does not matter because it's not what you actually bring home on a month to month basis. What's the point of using that figure when you won't actually have all of that money to work with?
Mortgage P&I on a 350k house, assuming 20% down, is only 1.3k per month. Insurance and property tax add up to around 200/month. For the first several years, your mortgage payment goes mostly to interest, so you get high tax deduction there, about 200/month. So you only really pay 1.3k a month for the house. Maintenance and utilities cost maybe 100/month. Your monthly net income is around 4.5k. Subtracting the house and student loan expenses, you still have around 2.8k a month. If you save 500 for retirement, you still have 2.3k. Pretty sure you don't have to eat ramen everyday with this budget.

And that's for a 350k house. If you can settle for less than 300k, your budget will be expanded by quite a bit.
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Old 03-26-2015, 08:29 PM
 
Location: Denver, CO
2,391 posts, read 1,802,118 times
Reputation: 1920
Quote:
Originally Posted by headingtoDenver View Post
Jesus man!! Where do you keep coming up with this 50% nonsense. Also, concerning gross and net, yes I fully understand the difference. I was using gross because I don't know what all expenses you have, but to have the difference go from roughly 20% (gross) to now your 50%(net) figure, you obviously have more expenses than just your 275 a month student loan. Again, who knows, which is why I was going by gross, because it is a factual number that you have presented to us. This is why most people use gross when looking at long term figures. Obviously, if you are sitting in Best Buy looking at TVs, you are going to look at the money in your bank account to see if you can afford it. This is common sense and yet you keep dwelling on it.

Also, I HAVE proven and even gave you a link to a place that can be had for 1200 a month. You just chose to not like the place, which is your prerogative, but to say that there are no places out there is a flat out lie and you know it is.

I'm done with this conversation because pretty soon, 1200 a month will be 75% of your net income and you will still be whining that you cannot find a place downtown to live.
Here's the breakdown:

After taxes, 401k, healthcare, HSA, and student loans ($275), I bring home about $3025 each month during a two-paycheck period (we are paid bi-weekly). That goes up to $4672 during a three-paycheck period, which is two months per year. This is my NET income. I don't give a crap what my gross income is, because it's not what I actually bring home each month. Understood?

At $1200/mo (this is assuming a lot about many variables, too), that is about 40% of my net income (I currently pay $785/mo, which is about 26% of my net income), leaving me about $1825 left per month. It's not perfectly ideal for me, but I can make this work by cutting out some things from my budget. After food and gas expenses, we're probably looking more at about $1300/mo left over.

My concern is and always has been those pesky emergencies that always come up when you least need them. That is why I like to have a decent chunk of extra money each month left over. I also like to have a little bit of play money. Because as an unmarried 29 y/o, I do still have and need somewhat of a social life.

Ideally, I'd like to find a place that is about $900-$1000/mo. I really don't think that's possible in Denver Metro.

And if you bothered reading my response to your previous post, you'd see that I don't qualify for that condo in uptown. It's rent controlled, and individuals can only make a maximum of about $54k/yr.
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Old 03-26-2015, 08:33 PM
 
Location: Denver, CO
2,391 posts, read 1,802,118 times
Reputation: 1920
Quote:
Originally Posted by AmFest View Post
Mortgage P&I on a 350k house, assuming 20% down, is only 1.3k per month. Insurance and property tax add up to around 200/month. For the first several years, your mortgage payment goes mostly to interest, so you get high tax deduction there, about 200/month. So you only really pay 1.3k a month for the house. Maintenance and utilities cost maybe 100/month. Your monthly net income is around 4.5k. Subtracting the house and student loan expenses, you still have around 2.8k a month. If you save 500 for retirement, you still have 2.3k. Pretty sure you don't have to eat ramen everyday with this budget.

And that's for a 350k house. If you can settle for less than 300k, your budget will be expanded by quite a bit.
As a first time home buyer, I don't have 20% down. For a $350k house, that'd be $70k, or just more than a year's salary for me. That would take me years and years to accomplish with the low rate savings accounts that are available.

An ideal home would be between $150k-$200k for me, as a first time buyer. And even then I'd only have around 10% at best to put down at this moment.
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