Will my wife and I be able to afford a home? (Houston: coupon, HOA fees) - Texas (TX) - City-Data Forum

parisby · 01-14-2009, 10:24 AM

I am currently doing contract work for the past 5-6 years, and my wife has a full time job as a teacher. We been wanting to get a house and move in together within the next 3-4 years. We are trying to save up some money to put a down payment on. My salary is about 20k and hers is about 30k. We were looking at houses around the 300k area. Will we be able to handle this with our salary? Please help. I never bought or owned a home before and this will be a very big step for us so we just want to get some opinions and advice before we make the move.

EasilyAmused · 01-14-2009, 10:29 AM

Property Taxes on a 300k are going to be 8000+/- a year. Keep that in mind. Then insurance will run about 1500+ a year. Then a HOA fees and utilities.

In general, you will find people in 300k homes are making 100k+

a year. Or at least they should be.

sbhubbell · 01-14-2009, 10:38 AM

300K sounds like a LOT for a first home on $50K a year, unless somehow you have saved 50% of that for a down payment.

cla · 01-14-2009, 10:44 AM

2 1/2 to 3 times your gross income is a general guideline for how much mortgage you can afford. I personally think those guidelines are too high, especially with the property taxes so high in Texas. I purchased a home for about 1 1/2 times my gross income and if I had spent more than that I would feel like that I am working just to pay my mortgage.

You need to ask yourself how much you can comfortably afford to pay monthly and find a house where mortgage + property tax + insurance + hoa fees = affordable payment.

Houston3 · 01-14-2009, 10:45 AM

I'd down size if that was all I made. Start at around half that price.

Yonkers · 01-14-2009, 10:46 AM

Wow. Where'd you get your numbers? I can't imagine you getting anything close to that expensive on just $50k a year. Frankly I wouldn't look at anything over $150k if I were you.
Assuming you don't have any other debt (car, student loans, etc) and assuming you have $10k to put down, you could afford probably $170k. In this market though I can't imagine you'd get that unless your credit is spotless.
But $300k? No way.

Hayato · 01-14-2009, 10:58 AM

why are you looking at 300k houses?

parisby · 01-14-2009, 11:03 AM

Thanks for the advice. I really appreciate this. Like I said this is going to be our very first time, and I just want to know what I will be getting into by being a home owner.

I figured at 300k for a house. I have excellent credit. We plan on doing the 30yr fixed rate mortgage plan and we plan on putting a 20% down payment (60k) on the house, and finance the rest by taking out a loan at the bank. So that should leave us with 240000 right. So we will have 30 years to pay 240k. Not sure how much our monthly payments will be. Is it possible to consolidate our monthly mortgage+property tax+hoa fees+insurance into one monthly fee instead of having everything seperate?

EasilyAmused · 01-14-2009, 11:08 AM

Yes you can roll them into one payment. But how are you going to afford a $2,200 monthly payment on 50k gross?

Not to mention that you won't qualify at your salary for a 240,000 loan.

Best to look in the 150k range. I know it's a bummer, but it's the reality now that sub-prime submerged the country.

Tasksgirl · 01-14-2009, 11:11 AM

Quote:

Originally Posted by cla

2 1/2 to 3 times your gross income is a general guideline for how much mortgage you can afford. I personally think those guidelines are too high, especially with the property taxes so high in Texas. I purchased a home for about 1 1/2 times my gross income and if I had spent more than that I would feel like that I am working just to pay my mortgage.

You need to ask yourself how much you can comfortably afford to pay monthly and find a house where mortgage + property tax + insurance + hoa fees = affordable payment.

Well a family that has a home 1.5 times their gross income would have quite a bit of money left over for necessities and all those "extras".. maybe it doesn't seem like much to that family because they are used to it, but I've had months with nothing left over for extras or anything other than my bills, but I still paid my bills and lived a great life. Likewise maybe this family is used to or doesn't mind living more frugally without tons of extras. (and I don't mean to call you out personally I just mean in general) Maybe they have large sums of cash saved up and maybe they already own their cars outright. Maybe they don't care about going out to eat 3 times a week or getting Starbucks every morning as it seems everyone in Houston does. 300k is reaching but I know people out here in CA who make around 50k and even a little less and still make their payments on their house every month. They should bring it down a little bit to make it easier on themselves, maybe 250k since they have such a large down payment, but overall what is right for one person is not always going to be right for another person. A family with 3 kids and 2 brand new cars that loves to take vacations and eat out or buy tons of books and CDs (like my mom does ha) would have a hard time affording anything more than 1.5 times their income. But a family with no kids, 1 paid-off used car, knowledge of how to get $200 of groceries for $50 using triple coupon days and get $400 worth of household items at CVS for $35 using their coupon and rebate programs would have no problem affording something alot higher that at first glance everyone goes

. Yeah they'd have to sacrifice alot and to some people that sacrifice may seem silly, naive, or not worth it - but ultimately everyone has to decide what's right for their family.

That being said, pulling it back a tiny bit to 250k would be easier for yourself, which would be 190k after your down payment.

Oh and BTW if they are on their way to having 60k saved up on a 50k salary then they obviously know some great secrets about saving money and living frugally !

Oh and everyone should check out those CVS/Walgreens coupon programs. I have friends that literally walk out with $400 of shampoo, diapers, dish soap, laundry detergent, toilet paper, toothpaste and deodorant, etc. for only $20 out of pocket. They stockpile it in their closets and have like a 2 year supply.. and only paid $20..... haha.. I'm not THAT great.. I've only gone a few times myself but my first trip I got $365.16 of merchandise for only $80.91 !! Try www.afullcup.com I swear it's awesome.. I haven't needed to buy shampoo in over a year or laundry detergent for 6 months.