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Reading some other threads here got me thinking about what I can afford to buy and where. Right now my wife and I are in our early 30s and we rent a 2 bed 2 bath in Middlesex County (no kids).
She works in Dunellen and I work in Cranford. Combined we make about $150k. We both have stable jobs. We have $50k for a down payment which does not affect either of our retirement or investments. (I have another ~30k or so in securities investments than can be liquidated for emergencies etc.)
Anyway, we are looking in the Scotch Plains area as a middle ground between her job and mine, but as mentioned it's tough to find nice properties in good areas that are affordable. Given my financial situation, do you think $450k is an unreasonable amount to look for a home? Assuming we put $50k down and borrow $400k? Any suggestions on where else to look besides SP? Like anyone else we want a decent area with good schools. Obviously we cant afford the higher end towns like Milburn etc.
You should consider Cranford. If one of the kids gets sick and needs to be pulled out of school, you're right there. The town is nice, the schools are really good and affordable properties certainly exist within your budget. Yes, it makes her commute longer, and that's not ideal, but she's going to be mostly going against traffic and having a parent in the town is something that is often overlooked when emergencies pop up.
As far as I know, you need a 20% down payment to get a normal loan these days. If not, you are looking at the FHA loan that makes you pay more for Mortgage Insurance. It might be a good idea to save more if you want a house that costs around 400K.
In my opinion $450k sounds a little high for a $150k income. You should probably focus more in the $350k range (which would give you a 300k mortgage after the 50k down). Don't forget to factor in property taxes which is a significant amount of money anywhere in North Jersey. Once you start eventually factoring in the cost of daycare and things like that you will appreciate the lower mortgage.
In my opinion $450k sounds a little high for a $150k income. You should probably focus more in the $350k range (which would give you a 300k mortgage after the 50k down). Don't forget to factor in property taxes which is a significant amount of money anywhere in North Jersey. Once you start eventually factoring in the cost of daycare and things like that you will appreciate the lower mortgage.
Seconded on that opinion. It looks like there's no end in sight for property taxes and 450k sounds like the tippy top of the budget. Think life emergencies that can get in the way as well. Better to have a lower mortgage that you can potentially pay off quicker than a higher mortgage that doesn't leave much room for life's bumps in the road.
In my opinion $450k sounds a little high for a $150k income. You should probably focus more in the $350k range (which would give you a 300k mortgage after the 50k down). Don't forget to factor in property taxes which is a significant amount of money anywhere in North Jersey. Once you start eventually factoring in the cost of daycare and things like that you will appreciate the lower mortgage.
I hear ya, but I'm having a hard time finding anything decent under $400k in a good area. These mortgage calculators must be skewed because most shows higher purchase price for our income. I guess they want you to borrow more.
You should consider Cranford. If one of the kids gets sick and needs to be pulled out of school, you're right there. The town is nice, the schools are really good and affordable properties certainly exist within your budget. Yes, it makes her commute longer, and that's not ideal, but she's going to be mostly going against traffic and having a parent in the town is something that is often overlooked when emergencies pop up.
I certainly like Cranford but it's pricey. No kids yet but in the future they are in the plan. Of course nothing is guaranteed.
If your mortgage payment is less than 30% of your net take home, you should be fine.
$150,000, 25% taxes = $9375 NET/month
9375 * 30% = $2813/m in housing payments.
$1,000 for taxes
Leaves you with $1800s for mortgage payment.
A loan of $360,000 @ 4.25% will run you in the high $1700s. I think $450,000 should be your cap, if you are able to put the 20% down. Shoot for the 20% down paying mortgage insurance is a waste of $$.
I always suggest for young couples to buy a 2 family house, especially if this home won't be your 20-30 year home.
The numbers should almost always work and your housing payment will probably be under $1,000.
If your mortgage payment is less than 30% of your net take home, you should be fine.
$150,000, 25% taxes = $9375 NET/month
9375 * 30% = $2813/m in housing payments.
$1,000 for taxes
Leaves you with $1800s for mortgage payment.
A loan of $360,000 @ 4.25% will run you in the high $1700s. I think $450,000 should be your cap, if you are able to put the 20% down. Shoot for the 20% down paying mortgage insurance is a waste of $$.
I always suggest for young couples to buy a 2 family house, especially if this home won't be your 20-30 year home.
The numbers should almost always work and your housing payment will probably be under $1,000.
Good advice. We are both 31 so we don't want to buy just to move in a few years. Would rather put roots down for the long haul.
Check out Clark NJ. Decent location, decent schools, and in your budget.
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