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If your salary is 60k (total household), how much did you pay for your house? How are you managing? Do you think you are paying too much? etc. We currently have one child not yet in school and live in NE FL.
A very general rule of thumb is that a person can afford to buy a home that is 2x-3x their gross income. That puts you in a purchase price of $120k-$180k. Obviously this is very general and will be different for everyone.
Another level that is considered "safe" is a total debt to income ratio of 36%. This would dictate that your full debt load would be $1,800/mo. Debt load consisting of the new house payment (principal, interest, taxes, insurance) plus any other monthly obligations you have like car loans, student loans and credit card debt. You do not include utilities and such.
We were making about that much, somewhere between $60-70k, when we bought our house years ago. We paid $160k. This was during the time of easy credit and we were approved for over $200k, but were not at all comfortable with spending that amount. In retrospect, we could have handled it and should have gone for it, but, hindsight.
Circa 1998, I was single, making about $58,000 and purchased a home for $132,500. Between it and child support, times were tight but with each passing year, it got easier. Same house today, I’m in low $100’s and we’re debt-free. I live on 8th Street but it feels like “Easy Living Lane”.
How much a person spent on Mortgage, taxes, insurance, fees and upkeep is much more usable data. Home price is only the starting point but fine...
Just over 2x my salary for purchase price which I was able to pay off in a bit over 5 years. That tells you nothing of how much I spent on the month to month or how much I put down or PMI, taxes, HOA etc.
IMO having a child should lower the amount you are willing to spend on housing not raise it. YMMV.
Mortgage shouldn't be more than 25% of income. I think hat puts you at 1250/month.
Best thing to do is save as much money for down payment to keep your mortgage as low as possible.
We were making about that much, somewhere between $60-70k, when we bought our house years ago. We paid $160k. This was during the time of easy credit and we were approved for over $200k, but were not at all comfortable with spending that amount. In retrospect, we could have handled it and should have gone for it, but, hindsight.
Believe or not, under-buying is as expensive as over-buying. It starts slowly, the house is a tad small, or you start resenting repairs, or you grow exhausted from your extended commute. Whatever you sacrificed, catches up to you. The sooner it happens, the more expensive. Less than 2 years, cha-ching. Paid full price or rolled in closing costs rolled in, cha- ching. If your appreciation rate is 4% or less, you may be lucky to break even, or less, eating into any down payment you had the first time around.
Everyone is so suspicious that the Realtor or the loan officer is pushing the buyer higher for more commission. Yep, that's it, they want that additonal $140. Nope, they know the dangers of under-buying. I am not saying stretch yourself beyond your comfort zone, but don't sacrifice everything you want for a super low payment. It will come back to bite you. The reason most buy is the payment remains fairly constant while income climbs. When you rent, your rent increases keep up with your income. Now, this isn't everyone that over compensates with sacrifices, but for those that are looking at dramatic lifestyle changes need to think this through.
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