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I know a couple, they are both working as plumbers in construction. THey don't look like they have a lot of money, but each brings home about $100k/year. So if they are smart, they can save up very much very fast and then buy an expensive house with a nice down payment.
I always wonder how people in CA can afford their houses. I see lots of people who don't seem to earn much and they live in $600k houses.
AFAIK, mortgage interest deduction would be a very good reason to keep a mortgage. For anyone with a large income, this is one of the primary ways to shelter from the tax-man.
Depending on income those deductions are subject to reductions through income phaseout
I don't think its unreasonable for a young couple to be looking at more expensive properties, but I also don't think that they are doing it on 100k income. Those couples probably have a pretty good income and a good down payment. I know that in my situation right now with our income we could afford a 800-1mil house now, but we would be more money conscious and not go on as many trips or what not. In a couple years we probably will be looking for something in the 1.2-1.5 range. We are a young couple and I'm sure people often wonder how we can afford it.
Can you tell me that how we can apply for Mortgage loan , actually i need that emergency , but I cant understand that conditions and methods how we can apply for that .
Of course. I have to pay that for 30 years. Would rather have a pay off home with no payments at all. Wouldn't you? Don't really take pleasure in sending that money off to bank each and every month.
But your comment is totally off topic... Your going off on a tangent here.
Well, you could always send your money off to a landlord every month.
Depending on income those deductions are subject to reductions through income phaseout
besides the fact spending 3 or 4 dollars over and above the price of the house to get back 1 dollar is never a good move . unless you have no choice and have to borrow the money to buy the asset or can successfully invest the money at a higher return if you have your own money .
that interest is taking money out of your pocket , the fact you get something back still makes it an expense .
Grumpy ol' Man above stated he purchased a $800K house in SoCal and makes no more than $50K a year.
I believe Grumpy ol' Man actually wrote that he SOLD an $800K home. Not that he purchased it. Either way, that is one example, and he explained how he rolled the profits from one sale into another.
Most posters here agree that a young couple making $100K or less is not typically the buyer of $750-$1mm+ homes.
Why are you assuming the people buying 750-1mm houses are making 100k a year? That would be highly abnormal. If there mortgage was in the 750-1mm range they aren't getting anything passed 30 years and I don't think any banks would approve an IO with those numbers
How are people doing it? They make more than 100k, they put healthy down payments on the purchase or both
Most also aren't buying houses in the elite suburbs strictly on W-2 income. In metro-Boston, people cashing in their tech and biotech founders stock and stock options funds a lot of homes. In the Bay area, that's the only way to buy into the good towns. You can't buy on W-2 money unless it's VP-level compensation. I'm sure an awful lot of them are also bought with inheritance money.
It's funny to read people say "They don't look like they earn that much."
I have 2 friends (married) that just purchased a brand new $1 million dollar home (a small townhome to be exact!) in Santa Clara. One is a engineer and the other is a investment banker. Both are ~30 years old (both look like they are barely in their mid 20's). Combined income is in the mid 200k. They have both been living at home since after college (you can imagine how much they saved). Both sides of the family gave them $200k total for a downpayment.
I have many married friends that make combined income between $150-300k with dual earners. All are in their high 20's to mid 30's. Keep in mind these are people that live in the Bay Area. Most are medical professionals, engineers, finance. If many of them were on HGTV (and never stated their professions) you would never thought otherwise based on how they looked.
Well, you could always send your money off to a landlord every month.
Not the comparison being made and irrelevant.
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