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I bought my first condo at age 25 for 220k mortgage is 176k...I pay $1360 a month on that. I collect $1400 month in rent on that now. Bought my current house with my wife at age 32 for 500k. My mortgage is 330k taxes just went up to 13k. Mortgage and taxes are $2691. Just bought a shore home all cash but in 6 months I plan to do a cash out refi for 145k to get some money back. Taxes on that are currently 3600 but house was storm damaged im assuming taxes will be about 5500 once I get the CO.
I'm guessing part of it might be that people got mortgage modifications that would result in lower payments or possibly even principal reductions. But I don't think anyone is going to come right out and say that.
A more interesting question would be what kind of incomes are people generating to support these large mortgages. I know lenders are approving loans with a 43% debt to income ratio which is way to high for most people.
I said it!
Our percentage of income going towards our homes (we've had 3 homes, never more than 1 time) has never been more than 25%.
This is an interesting thread... figured I'd throw my numbers in the hat .....
I live in Millburn, NJ and have a mortgage around 550K - put about 40% down on the house, and have taxes around 17K. Monthly is about 4500 with tax and insurance.
Been looking to upgrade and will probably go with a mortgage in the 800-900K, again with around 45% down on the next house - taxes more in the 30K range, about 7K per month with insurance.
I am 38... finance executive - with incentive comp I make about 420K per year.
Banks and others say I can afford a house that costs 2.5mm, but in no way would I go that high, even in my town. I am most comfortable at around 1.7mm - keeps monthly payment at around 20% of gross monthly and 30% post tax. I also drive Hyundais (love my santa fe)
My concern is variability in my bonus, which is about 50% of my pay - grossly underspent out of the financial crisis out of fear that I would get 0 in worst case, but have decided to take a bit more risk given my pay is not crazy variable.
I think the taxes are about the same as some nearby states like NY.
Take for example a lot of single family homes in NY costs over $500k, the property taxes already creeped up to $7k for a 1200-1600sq ft and tiny back yard. Then you have avg to below avg school system. Then you have to pay the NYC Resident tax at 4% and all the higher costs of living it amounts to another $3-8k in taxes depending on your tax bracket.
NYC tax code is good for poor people making below $28k which is why so many landlords scam the system and you working people have to pick up the tab.
As a renter, you are paying for a share of the cost the landlord pays to support the property so it goes up when the taxes goes up.
This is an interesting thread... figured I'd throw my numbers in the hat .....
I live in Millburn, NJ and have a mortgage around 550K - put about 40% down on the house, and have taxes around 17K. Monthly is about 4500 with tax and insurance.
Been looking to upgrade and will probably go with a mortgage in the 800-900K, again with around 45% down on the next house - taxes more in the 30K range, about 7K per month with insurance.
I am 38... finance executive - with incentive comp I make about 420K per year.
Banks and others say I can afford a house that costs 2.5mm, but in no way would I go that high, even in my town. I am most comfortable at around 1.7mm - keeps monthly payment at around 20% of gross monthly and 30% post tax. I also drive Hyundais (love my santa fe)
My concern is variability in my bonus, which is about 50% of my pay - grossly underspent out of the financial crisis out of fear that I would get 0 in worst case, but have decided to take a bit more risk given my pay is not crazy variable.
Similar income situation (dollars and structure)...less variability, but comp/stability is very dependent on the market.
side stepped into a decent full size in Glen Ridge instead of taking the starter home in Summit/Millburn, etc. Wife has a decent income as well which offsets the comp structure. 32 yrs old 1MM first ?last? house, mid to be high 20k taxes, hefty down payment to back into roughly 5k/mo nut inc escrows. Strategically locked in a jumbo 30 yr fixed at 3.375 when there was a blip in rates
UWers were also pushing us to 2mm levels at higher LTVs. Which at our age is a bit ridiculous, although ironically for them, is considered upside in earning potential.
Between the long term cheap money, no more 3.5% NYC tax on dual income, and 4.25% NYC tax on bonus, the monthly nut is inline with our outgoing NYC rent when you factor in the tax savings. That was pretty much the rationale for budgeting the purchase from a financial standpoint.
Wow, fun thread, guess I'm doing alright after all. Husband (31) and I (28) bought for $400k, total payment just under $3k/month with taxes, insurance, etc. Putting in some sweat equity and renovating as we go, similar houses on our block are $550k+. Plan to stay for at least 10 years.
My wife and I did something totally different. Got married in 2013 (age 27/28) and did the following:
1) Bought a knock down house on a 50x100 lot in the Ironbound section of Newark in 2013 for $315,000
2) Built two new two family homes on that lot.
3) Moved in February 2015, ended up refinancing to 15 year mortgages in February 2016 with the following:
Primary house
Mortgage balance: $358,000, 14 years left
Valued at: $550,000
Rate: 3.125%
Rent upstairs at $2,200 per month. Taxes are $6800 for the first five years, than $11k after. Pretty much live for free in a 3 bed / 2 bed apartment. First child is due next month, so schools aren't an issue.
2nd home
mortgage balance: $325,000, 14 years left
Valued: $550,000
Rate: 3.75%
We collect amount $4,600/month in rent. Have abatement on property for another 3 years. Rents paying for 15 yr mtg, taxes, all expenses while bringing in positive cash flow.
Doing this real estate transaction in 2013, instead of buying a 1 family home in the $400k-$500k range when we were age 27/28 will set us up financially for the rest of our lives. By the time we are 45, both homes will be paid off. We have been able to save a substantial amount of money since we did this. Our plan is to leave our apartment, rent it for $2400/month. We will use our cash savings to buy a lot or old house and build a new house as our permanent home in 3-4 years. We will also we able to tap into the equity of our home to help fund construction costs. By that time our first child will be going to pre-k.
Wow, fun thread, guess I'm doing alright after all. Husband (31) and I (28) bought for $400k, total payment just under $3k/month with taxes, insurance, etc. Putting in some sweat equity and renovating as we go, similar houses on our block are $550k+. Plan to stay for at least 10 years.
Sounds like my wife and I (slightly less monthly payment and home cost). We had to do the sweat equity in a hurry since the baby was coming 3 months after closing. Changed light fixtures, painted almost every room, had the floors refinished, removed wallpaper, I even changed the commode (I was proud).
Now houses on our block go for about 100k more than what we paid, however, we'll be here for quite a while.
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