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Relocated to a new area for work about a year ago, and it's time to buy a house. Trying to determine how much to spend. We are a couple in our mid 30's, no kids or plans for kids right now. 1 dog. Household income $150k. No debt. We have $100k for a down payment. Trying to figure how much is reasonable to spend on a house.
We've seen a few houses in nice areas that will meet our minimum requirements, in the $125k to $150K range. Obviously with this route, it could be payed off in a few years, and extra money could go to investments, etc. Freedom from a mortgage requirement is a huge plus, but we would be "settling" for less house.
We've also seen some nice houses in the $400k range. Of course we like these better. Typically larger than what we need, and nicer finishes. Often some usefull space, like an extra garage. Fancier neighborhoods as you would expect. With 20% down and current rates at 3.5% or so, looking at a payment around $2k PITI. This is around 20% of take home pay, which would still be very comfortable. Downside is longer mortgage commitment, upside is much nicer living standard.
Relocated to a new area for work about a year ago, and
...it's time to buy a house. Trying to determine how much to spend. Household income $150k.
No debt. We have $100k for a down payment.
A mortgage at 2.0 - 2.5 X income is a prudent limit... that means UP TO but not MORE THAN.
Down payment should be enough to avoid PMI... but not a penny more.
Beyond that... it's a juggling act:
strike a balance between finding "the worst house in the best neighborhood" and keeping the spouse happy.
Do the best you can.
We made sure we could afford the payments easily and that it would not be too expensive to maintain. A 500K home even at reduced price or made more managable with larger down payment is still a 500K house to maintain.I have seen alot of houses the people could buy but couldn't afford to maintain in my years.Have a person I know who was goig to buy a redcued house until they found that the house to have repalcement covrage needed 40% increase over what they would pay in coverage.
Relocated to a new area for work about a year ago, and it's time to buy a house. Trying to determine how much to spend. We are a couple in our mid 30's, no kids or plans for kids right now. 1 dog. Household income $150k. No debt. We have $100k for a down payment. Trying to figure how much is reasonable to spend on a house.
We've seen a few houses in nice areas that will meet our minimum requirements, in the $125k to $150K range. Obviously with this route, it could be payed off in a few years, and extra money could go to investments, etc. Freedom from a mortgage requirement is a huge plus, but we would be "settling" for less house.
We've also seen some nice houses in the $400k range. Of course we like these better. Typically larger than what we need, and nicer finishes. Often some usefull space, like an extra garage. Fancier neighborhoods as you would expect. With 20% down and current rates at 3.5% or so, looking at a payment around $2k PITI. This is around 20% of take home pay, which would still be very comfortable. Downside is longer mortgage commitment, upside is much nicer living standard.
How would/did you handle this situation?
Keep your LTV below 80% and you'll be fine. Don't be scared of debt because your DTI is low. Good luck!
I have seen alot of houses the people could buy but couldn't afford to maintain in my years.Have a person I know who was goig to buy a redcued house until they found that the house to have repalcement covrage needed 40% increase over what they would pay in coverage.
can you give out more details? i want to know. I have been looking at homes and while some of the bigger homes have their values dropped, and their price/sq feet is much better than smaller homes, i just know that prop tax and insurance will be higher, upkeep, maintaince, etc. on top of these things, what else is there?
I would love to buy a 2000 sf house, but some areas here a 3000 sf home can be bought for 50k more. its tempting to just save 50k more and have a bigger house and live like a king
$100,000.00 maximum for land, home, pole barn all built to specification from the ground up and no financing for any part of the entire purchase/building process.
Your 150k income is a combined household income, correct? My rule of thumb is to base affordability on one person's income rather on the couple. That way, if one of you loses your job, the working spouse can still manage to pay the mortgage. Better yet, base your affordability decision on the lesser of the two incomes.
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