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Old 02-16-2010, 12:26 PM
 
15 posts, read 151,572 times
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Just curious what folks out there who earn $100k year (and not much more) are able to afford in terms of housing, or have any suggestions. I've run the typical calculators online, but am hoping to get some "real" data for a reality check as I (hopefully) look for a SFH...

A few things about my situation:
- I earn almost exactly $100k/yr and am the sole source of income.
- I support a wife and two pre-school kids.
- I am NOT handy in the slightest bit.

Given the property taxes in NJ, the calculators are putting me between 375k to 450k for the price range (monthly payments ranging from 2300-2750). In Central and Northern NJ, that's not getting you very much house. Throw in thing like retirement savings, kids' college savings, etc., and I'm looking further in the upper 300s. Not thrilled with the options.

Thoughts anyone?

-jersey$P!KE
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Old 02-16-2010, 12:35 PM
 
239 posts, read 526,304 times
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I say 300k but I am cheap
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Old 02-16-2010, 12:47 PM
 
101 posts, read 420,178 times
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property taxes make a difference- for a 350k house, you could see anywhere from 5k a year (Whippany/Hanover) to 13k (Oranges) - Its worth considering before you lock into an area.

You may be looking at a good time to buy though- house prices seem to be at more reasonable levels, interest rates are about as low as they can get...

You didn't say how steady your income was or how much savings you have(to cover mortgage payments in case you are out of work) - I would take this into account.

I would say you are being pretty reasonable- I would have mentioned daycare costs- but you have a stay at home parent.
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Old 02-16-2010, 12:53 PM
 
Location: Edison, NJ
89 posts, read 400,710 times
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"not thrilled with the options"

Welcome to my world! My wife and I make $120K gross but after $85K in law school debt, savings, etc. I'm in your same boat. I hate the idea of renting in my middle 30's but I'm not going to spend $375K for a 3BR, 1BA ranch or cape with window AC and pay $5-7K in property taxes per year!
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Old 02-16-2010, 12:54 PM
 
1,173 posts, read 4,116,377 times
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How much are you putting down? That's going to greatly impact the size of the payments you will be making. Also what other debt/obligations do you have student loans? Car payments? Credit card bills? Medical bills? Outstanding taxes? Preschool costs? Is your gas comsumption going to go up? etc.??

After that how much is left? There maybe enough for a mortgage payment on a large house but is there enough left to heat that house? Furnish it? The larger the house the larger the bills.

Instead of using those calculators you should take a look at your current situation, how much do you pay for housing now? How much more can you afford? Are you leaving some extra for repairs and maintenance?

Our household income is a lot higher than yours but we kept our budget much lower, a lot had to do with the fact that we were putting very little down (FHA) but we also want to be able to pay stuff off not just get stuck paying the minimum on all our other bills.

Good luck and keep looking there ARE deals to be had!
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Old 02-16-2010, 01:00 PM
 
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IMO I wouldnt go above 350k in todays economy. Especially if you have a decent amount of outstanding debt already (1 or more car notes, cc balances, studen loans, etc). Since my wife lost her job last year it has been ROUGH. Max UE will pay is like 2100/month regardless of what you made and how many dependants you have. It has taught us a very hard lesson about not only planning for today but the possibilities of tomorrow as well.
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Old 02-16-2010, 01:10 PM
 
530 posts, read 2,588,242 times
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Yes, as someone else asked how much are you putting down? Do you have any other debt? Car payments?

I make roughly the same, my take home is about $6,000/month. I would target a monthly payment, including taxes, of no more than $2,500/month. That assumes you don't have any major monthly expenses other than the standard grocery bills and also assumes a car payment of about $400/month.

Just my opinion. And then back into what you can afford using whatever monthly figure you are comfortable with. But I definitely wouldn't go over $2,500/month assuming you are taking home about $6,000/month.
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Old 02-16-2010, 01:11 PM
 
9,124 posts, read 32,776,875 times
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I'd check with the mortgage brokers you might be considering- the debt ratios today are much different than they were a few years ago, and I'd bet you'd only be approved for a mortgage of $250-300k. That probably makes you even less happy about your options, especially since you're not handy and will likely end up in an older home that needs work in that price range.

As others have said, you've got to consider your actual expenses as well- not just what some "online calculator" says. Taxes on a small house in just about any town in NJ are going to run you $5-6k/year, so that alone is $450-500/month on top of the mortgage, insurance, etc., for the house, and any other debt you have.
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Old 02-16-2010, 01:26 PM
 
1,340 posts, read 3,316,096 times
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My situation puts my wife & I at roughly your income level (slightly above) with no debt and no children and we put 20% down and bought a $300k house. I also think I am on the HIGH end of what I was willing to spend. I probably would not have gone beyond $320k-$329k. My sweet spot house wise was about $250k but in South Jersey that is tough to do as well.

So in your situation with two kids I would MAX out at $250k mortgage wise and that is probably WAY beyond what I would be comfortable with in your shoes. Get the wife to work once the kids are in school then get her working and hopefully by then (after saving a bunch) you can swing a $300-$350k house and not be cash strapped.
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Old 02-16-2010, 01:38 PM
 
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Our income is just under $100k, and our mortgage broker suggested a maximum of $300k, assuming taxes of about $7,500.

We do have significant law school loans to repay, but have great credit and otherwise no debt obligations.

It sounds like child care costs may not be an issue for you, unless pre-school is very expensive, so that's helpful. In our case, we have a baby and both work full-time, so that additional $1500 or so is a factor for us. Because of that and the student loan payments, we're really more comfortable in the $250- 275k range.
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