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Hi I was wondering to afford a home in the 600-850k range, which is what the price of anything decent is in a few areas i was researching, with little or no debt, what is the annual income needed to live at least somewhat comfortable for a home in this range?
That's going to depend on where you live and what your other expenses are. Are you looking for a $650K in a state with light property tax burden (maybe a couple thousand per year) or in NJ where your property taxes could be $15,000 a year? Do you have tons of other expenses (large car payments, remaining student loan debt, credit card debt, etc.), you say little, but you've gotta account for it. Also, how much will you put down?
The general rule of thumb is that people should not spend more than 30% of their net income on housing, including costs such as mortgage, PMI, taxes, etc. Many many many people in the U.S. spend more than that 30% and to do so you have to get more creative in how you balance your other expenses. And of course, if you have excessive expenses such as debt repayment, etc., then you'll have to plan accordingly.
"The general rule of thumb is that people should not spend more than 30% of their net income on housing"
I've heard that, but always found it a bit strange. The more you have, the more you have left over to cover the same expenses we all face. Therefore, if you make a good income where all of your basics can be covered by a smaller percentage of your income, it makes sense that you can afford to spend more as a percentage on a home.
My particular situation would be one of relatively low debt, and a fairly expensive area, San Diego area specifically was looking at. The annual income I have is 150,000 so I was just trying to gauge what I could afford.
My particular situation would be one of relatively low debt, and a fairly expensive area, San Diego area specifically was looking at. The annual income I have is 150,000 so I was just trying to gauge what I could afford.
I would think that should be enough to afford a 600,000ish home. I know a couple who are both teachers probably making a combined $80,000ish a year and they live in somewhere around a $300,000ish home. I think you are right about the 30% rule. The more money you have, the more you can afford, period.
May I ask what you do to make $150,000/year? I'm trying to figure out something I want to pursue that I am halfway interested in and that pays fairly well. I think I could live pretty darn good on about $90,000+. I hope I make it to that or above someday.
I would think that should be enough to afford a 600,000ish home. I know a couple who are both teachers probably making a combined $80,000ish a year and they live in somewhere around a $300,000ish home. I think you are right about the 30% rule. The more money you have, the more you can afford, period.
assuming you have the standard 20% down, i couldn't sleep at night having a $480K mortgage on a $150K salary. and that's with no student loans, car payments, credit card bills, etc.
i'm sure it's done all the time, but it's way out of my comfort zone.
$220K/yr would be more in line with what i would say is what's needed.
assuming you have the standard 20% down, i couldn't sleep at night having a $480K mortgage on a $150K salary. and that's with no student loans, car payments, credit card bills, etc.
i'm sure it's done all the time, but it's way out of my comfort zone.
$220K/yr would be more in line with what i would say is what's needed.
$3000ish/month mortgage
If you make $150,000/year you should bring home around $8000ish a month after taxes (guestimate and it's also 2am and I'm tired and about to go to bed)... That's over $5000 per month to cover everything else including homeowner's insurance, taxes, and then all of the other costs of living.
Unless I've made a major mathmatical error, I'd say you could live pretty good on $5000 a month after you've paid your monthly rent.
$3000ish/month mortgage
If you make $150,000/year you should bring home around $8000ish a month after taxes (guestimate and it's also 2am and I'm tired and about to go to bed)... That's over $5000 per month to cover everything else including homeowner's insurance, taxes, and then all of the other costs of living.
Unless I've made a major mathmatical error, I'd say you could live pretty good on $5000 a month after you've paid your monthly rent.
i'm in NJ and you're looking at *at least* another $1200/mo in taxes/insurance. also putting away $15K/yr in 401K , you're already at $5400/mo. i haven't eaten yet.
even if you assume taxes/insurance at half that, you're still stretched pretty thin.
as i said, i'm sure it's done all the time, but not for me.
"The general rule of thumb is that people should not spend more than 30% of their net income on housing"
I've heard that, but always found it a bit strange. The more you have, the more you have left over to cover the same expenses we all face. Therefore, if you make a good income where all of your basics can be covered by a smaller percentage of your income, it makes sense that you can afford to spend more as a percentage on a home.
This this this this. Think of an absurd extreme case of a person making a 200K a month (2.4mil), paying 150K/mo (75%) for their combined housing expenses. Unless they have 19 wives or are eating golden caviar daily, probably their remaining 50K/mo is MORE than enough for expenses. If they go to the same shoprite everyone else does, their eating costs are the same, etc.
That is, having a fixed percentage does not scale, because the remaining costs like healthcare, food, and schooling, do not increase, unless you want them to and have expensive tastes, when you're rich. They are the same as for people making less.
My particular situation would be one of relatively low debt, and a fairly expensive area, San Diego area specifically was looking at. The annual income I have is 150,000 so I was just trying to gauge what I could afford.
If I made $150k, had 20% to put down, and no other debt, the max I'd spend on a house is $400k.
The max.
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