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Old 07-24-2008, 10:49 PM
f_m
 
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This also depends on your area and cost of living. In areas of higher cost of living it is not uncommon for the ratio to be slightly higher.
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Old 07-25-2008, 12:33 PM
 
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I am just trying to figure "how much" of a house I can afford based on me and my wife's combined salary.... I figured the mortgage couldn't be higher than 30% of our income and I would like to build a house so I was wondering how much we could afford... it looks good so far, now we only need to save 30% of the downpayment to build it... which will take a while..
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Old 07-25-2008, 01:07 PM
 
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evilnewbie
just my personal opinion here, but think twice about qualifying on 2 incomes. I know several people, family included, that used both incomes to purchase homes and have lost, or are close to losing their homes. Spouses lost their jobs and either could not find a new one or one that paid as much. Unless you just happen to be in a highly desirable job field where finding new work (hopefully in the same area)would be very easy, please be careful not to overextend yourselves. Sometimes less is more
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Old 07-25-2008, 02:04 PM
 
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Hehehe... me and my wife are in highly desired job fields, there wouldn't be a problem in finding another job... albeit this home would be our first and "last" home since I plan to retire there as well...
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Old 07-25-2008, 02:20 PM
 
Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 4,127,174 times
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Originally Posted by evilnewbie View Post
Hehehe... me and my wife are in highly desired job fields, there wouldn't be a problem in finding another job... albeit this home would be our first and "last" home since I plan to retire there as well...

Well pray you both stay able bodied and don't get sick/hurt and you BOTH will be able to work until retirement.
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Old 07-25-2008, 02:28 PM
 
Location: Denver, CO
1,425 posts, read 3,873,544 times
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Mine is around 20%. But I don't need a jumbo house just because I can get a loan for it. I don't know, maybe I just think differently than a lot of people out there.
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Old 07-25-2008, 02:29 PM
 
Location: Wouldn't you like to know?
9,113 posts, read 15,300,815 times
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Quote:
Originally Posted by evilnewbie View Post
I am just trying to figure "how much" of a house I can afford based on me and my wife's combined salary.... I figured the mortgage couldn't be higher than 30% of our income and I would like to build a house so I was wondering how much we could afford... it looks good so far, now we only need to save 30% of the downpayment to build it... which will take a while..
Its not just about salary....

Do you have kids or plan to?

Will both of you continue to work? Will your wife (or you) stay home? How about daycare costs?

How many months of an emergency fund do you have?

How long do you plan to live in the house? Will you look to "trade up"?

Are you frugal w/a strict budget, or does money burn a hole in your pocket?

How much debt do you have??


These are questions that needs to be added to the mix to make your decision on how much you can spend
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Old 07-25-2008, 02:37 PM
 
16,701 posts, read 18,917,881 times
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I plan on hiring an au pair if I have kids, I plan to have a year's worth of emergency funds very soon, I will have disability insurance cause people in my field of work typically have it. I will not trade up, once I buy and build, its mine and my wife's home forever (or until we both die). Out of everyone I know, I have saved a LOT of money in a short amount of time (people call me "cheap", only because I don't spend money on them).... I have very little debt... my wife likes to create debt but I reign her in when she gets close to out of control... Based on under 30% of after taxes income, we could afford a house a bit under 2 M... I don't want "that" expensive of a house... maybe 1.2M... so even then it will be a bit more than 15% of our income.. which I think will be fine..
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Old 07-25-2008, 03:43 PM
 
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My husband is in a high paying /desired career field but just because he MAKES alot of money We would NEVER buy a home according to his salary. We are retired military & we will be playing it safe. Our mortage payment,taxes & insurance will NOT be greater than his retirement check. My philosophy is if worse was ever to come we can always flip burgers until he finds work.

Everyone should have ATLEAST 6 months up to 1 year salary in the bank REGARDLESS if they are renting or if they own a home. People who don't maybe they are living a little on the high side than they should be.

I don't go by what experts / banks tell me what I can afford. I know what I CAN afford and choose to live well below our means.Just because you saved for a rainy day doesn't mean a thunderstorm won't roll in and wipe you out
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Old 07-25-2008, 04:39 PM
 
3,191 posts, read 8,036,824 times
Reputation: 2174
Good grief. Excuse me but I am gonna have to put my momma hat on.WHY do you need such an expensiive house??? Do you realize with that kind of money you could buy a small nation?
Seriously, why not buy something very affordable, invest the difference ( even if you put it in a mayonaise jar and bury it in the backyard) and live well below your means. Plan well for a rainy day. You can still live very comfortably without spending so much on a house. What does a million dollar house have that one more economically priced doesn't have?

ai yi yi! I guess I squeak to much when I walk...do what you want...good luck
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