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Old 04-23-2010, 12:44 AM
 
Location: Greenwell Springs
97 posts, read 1,143,303 times
Reputation: 76

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My husband and I are thinking of relocating to Denver and I've been looking on Realtor.com to see what's available. Based on their mortgage calculator (using the average settings) it seems reasonable to look at houses up to about $300,000. Their calculator estimates the monthly payments to be about $1500 a month for this price.

We will be making about $50,000 a year (just over $4000 a month) plus about $20,000ish for a down payment. I was just wondering if $300,000 was reasonable like the website says. If anyone makes around that much and knows whats do-able on that salary or if any real estate agents could help me out on this one, I would appreciate it. I just want to make sure I'm looking in the right price range. Thanks.
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Old 04-23-2010, 12:59 AM
 
11,715 posts, read 36,457,157 times
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I'd call that house poor. Been there, done that, didn't enjoy it. You really shouldn't spend more than about a third of your gross on total housing expense. That puts your cap at $1389/mo. You'd have to borrow $280k if you put $20k down. My local credit union shows a payment of $5.44 per thousand for a 30 year fixed with no points. That's $1523/mo just for your house payment. From the local tax rates I've heard, you might need to add another $200/mo for property tax. Then you've got insurance and possibly HOA.
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Old 04-23-2010, 01:05 AM
 
27 posts, read 918,159 times
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It depends entirely on your lifestyle and debt. Instead of using an online calculator, I would add up all of your monthly bills (including utility bills, student loan payments, car payments, cell phone/internet/cable, cc bills, etc.) and other varying expenses (don't forget groceries, car maintenance, home maintenance and various medical bills). Subtract that amount from your monthly income MINUS taxes, social security, and health insurance.

In addition to the monthly mortgage payment, you will be paying insurance and property taxes each month on your home as part of your mortgage payment. For a $300K house in Denver, that could easily be around $300/month. Since you plan on putting less than 20% down, you can count on paying PMI (private mortgage insurance), which is required by the lender to protect them in case you foreclose... that could be anywhere from $50-$120 added on to your payment. It's also harder to get a loan without 20% down so expect to pay a bigger interest rate, even with good credit (which will raise your payment).

For reference, my DH and I will be looking at homes around $250K and we will be making almost twice that amount.

I also would not be talking to real estate agent for financial advice like this, I would turn to your bank, a financial advisor, or at least your mortgage lender.

Good luck!
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Old 04-23-2010, 01:07 AM
 
Location: Texas
44,124 posts, read 54,206,506 times
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Nope. I wouldn't do it on that salary. You're not even close to being able to afford that.
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Old 04-23-2010, 01:10 AM
 
27 posts, read 918,159 times
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Quote:
Originally Posted by stan4 View Post
Nope. I wouldn't do it on that salary. You're not even close to being able to afford that.
That's probably a better way of saying it.
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Old 04-23-2010, 01:11 AM
 
Location: Aurora, CO
6,769 posts, read 10,713,457 times
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While it may be do-able, I personally don't think it's wise.

Even if that 50k figure is net and not gross, a 30-year note at 5% on $280,000 puts your monthly house payment at $1500, and that's only P&I. That puts your mortage-to-income ratio at about 36%.

Add in other debt, groceries, utilities, etc, and you won't have much left over at the end of the month.
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Old 04-23-2010, 01:15 AM
 
Location: Greenwell Springs
97 posts, read 1,143,303 times
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Hmm. Sounds like maybe we should a) look for a house around $200,000 or b) save up more for a larger down payment...

Can you get a nice house in the city for $200,000? (preferably at least a 2 bed 2 bath) We're not really suburban people.
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Old 04-23-2010, 01:15 AM
 
4,570 posts, read 7,635,186 times
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Depends on who you speak with. Personally, *I* feel that will make you "house poor". That puts you a 37.5% of your income on just a mortgage, add in anything else like school loans, car payments, personal loans, credit card debt, whatever... and you'll be over the limit and won't likely qualify for a mortgage.

My wife and I are in our 2nd home now, and for both we tried to keep under 25% of our monthly income. That leaves us lots of room to tack on a car payment (none right now), save for vacations and retirement, and have a lifestyle that isn't exclusively sitting at home and fretting about money/bills. If you did the same, you'd be looking at about a $200,000 purchase price. We went with what we could buy and still put 20% down on the property (avoiding that PMI expense).

Now, my wife and I are Very conservative with our money... but we should also be able to "retire" by about 50~55 too. We buy used cars and have never financed a car purchase, no credit card debt from month to month and both of us had our college loans wiped out in 5 years. If you're not this kind of person, then up the risk level some... but I still think $300k is too high, and suspect that most lenders will think the same.

If you Really want to know and exact figure, then find yourself a lender and let them tell you what they will loan. That's going to be the limiting factor anyway.
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Old 04-23-2010, 01:19 AM
 
Location: Greenwell Springs
97 posts, read 1,143,303 times
Reputation: 76
We are exactly that kind of people.

We have no debt or loans to pay off, only one credit card that we pay off every month, and our car will be paid off by the time we go to purchase.
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Old 04-23-2010, 01:31 AM
 
27 posts, read 918,159 times
Reputation: 49
Quote:
Originally Posted by CuriousLindsey View Post
Hmm. Sounds like maybe we should a) look for a house around $200,000 or b) save up more for a larger down payment...

Can you get a nice house in the city for $200,000? (preferably at least a 2 bed 2 bath) We're not really suburban people.
You could probably get a townhome or apartment that was pretty nice for $200K in downtown Denver, but a nice house in a good neighborhood downtown might be a stretch.
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