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Old 09-15-2013, 03:22 PM
 
Location: The Berk in Denver, CO USA
14,480 posts, read 21,293,677 times
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You will then be able to post in the foreclosure forum in a year or so.
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Old 09-15-2013, 07:32 PM
 
Location: Lexington, SC
4,281 posts, read 10,967,990 times
Reputation: 3721
Quote:
Originally Posted by tropolis View Post
no credit card debt, car paid off, and had 30k for the 20 percent downpayment.

gross pay: 2307.7

mortage with insurance and taxes per month: 785

utilities including tv and internet with water and trash: 281

car insurance: 60
food: 300
phone: 80

would this be cutting it to close? I could cut some off food and phone.

optimumly i would like to have 1000 a month available and I would have roughly 800 with this plan.

gross pay should go up over time. 26, finishing degree this semester.
Not that is still valid, but I was taught (and did apply it) that one can afford a home 3-4 times their annual gross income. At $30K a year most any home over $120K will be a reach.
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Old 09-15-2013, 07:34 PM
 
Location: Lexington, SC
4,281 posts, read 10,967,990 times
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Quote:
Originally Posted by TelecasterBlues View Post
I'll bite...

So I'm in a similar position, I'm at a starting salary just north of $30k and can expect to hit $40k within the next 4 years, $50k within 7 years, $70k within 15 years while under my current contract. Those figures should obviously increase with time and new negotiations. But I'm looking to mortgage off a home for no more than $100k tops...ideally $100k or less, and I'll have between $50k-$55k saved up with no debt by the time that I would go to buy. I contribute into matched pension/SS/retirement plans out of every paycheck and don't really have to worry for retirement. I'm looking at SWPA/WV where cost of living is overall dirt cheap. I plan on dropping 20% on the downpayment, with taxes ranging between $300-$800 per year depending on the area, I'd be having at least one roommate for the first couple of years as well.

So for my situation...yes/no on giving it a go?

$30K a year with an inflation rate of about 3% says you need to double that in about 20 years time just to stay even. Forget about get ahead.
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Old 09-16-2013, 08:16 AM
 
Location: Powell, Oh
1,847 posts, read 4,168,100 times
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There are a lot of replies, and I haven't read them all.

But the OP seems to have a good head on their shoulders. I think they are being smart to think of this ahead of time.
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Old 09-16-2013, 08:28 AM
 
Location: Hampton Roads
3,032 posts, read 3,912,793 times
Reputation: 4408
I make about 45K per year and am struggling with the idea of buying a 60K-70K 3BR condo. No car loan, pay $150 in student loans, no CC debt. I keep hearing that homes are money pits and people tell me horror stories of spending thousands to replace things. I'm just too scared to pull the trigger right now.
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Old 09-18-2013, 12:26 AM
 
10 posts, read 33,837 times
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Hi.

I use a chart from Dave Ramsey... And use my gross income. Use a mortgage calculator for your state. Input all your data and see what it says. Then see if it fits in your spreadsheet.

Real Debt Help - Get out of debt with Dave Ramsey's Total Money Makeover Plan - daveramsey.com

Anything that doesnt apply to you, you can obviously allocate to another expense. This is how we decided if we could afford a XXXK home on a our gross income. We use this religiously with our own numbers because these ARE our annual expenses. People don't think about vacation/travel, holidays, birthdays, charity etc... those things come up. A road trip for a funeral is not a vacation, but we did travel to get there...so the money was there. :/ But if you do make a spreadsheet like this one and mess around with your #'s, I think it would be manageable. have it be for a 100k house or 150. Good luck!

Last edited by Soda_love; 09-18-2013 at 12:42 AM.. Reason: spreadsheet data populated poorly
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Old 09-19-2013, 05:46 AM
 
469 posts, read 925,486 times
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If I had a "good" job making 30K, I would buy a house for 150K, with 60K down and excellent credit and tax returns that support work history.
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Old 09-19-2013, 10:24 AM
 
Location: Lexington, SC
4,281 posts, read 10,967,990 times
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Quote:
Originally Posted by homebeyer2013 View Post
If I had a "good" job making 30K, I would buy a house for 150K, with 60K down and excellent credit and tax returns that support work history.
$60 (40%) down leaves a mortgage of $90K which could be done on $30K income. I think that many are looking to float as large a mortgage as they can. I say $30K will not support a $150K mortgage/debt.
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Old 09-20-2013, 08:05 AM
 
Location: Sector 001
7,326 posts, read 6,746,842 times
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make 40k, looking at homes 110-130k.. overtime availability (which I never take right now) is plentiful and job is secure, I can rake in the dough if I need it for some reason.
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Old 11-30-2013, 09:52 AM
 
13,085 posts, read 10,431,657 times
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Quote:
Originally Posted by kevinm View Post
The rule of thumb is to buy as much house as you can afford NOW. Your salay will go UP, but you will be locked into a FIXED housing cost. If your family expands and you went cheap and did not have enough space, you will have to buy again. Buy as much as you can while the interest rates are at historical lows.
If you have a big enough down payment, interest rates will matter much less because while you may be paying 4% rather than 3%, if you borrow less money you may end up paying less interest in the end despite the higher rate.

Utilities, taxes, insurance, maintenance, repair, cleaning, and lawn care typically add up to 5% of the purchase price every year, and the mortgage payment maybe another 5% (principal and interest).

Option 1: Buy $300k house now with $60k down and save $x per month
Option 2: Buy $150k house now with $60k down and save $x per month and make extra mortgage payments of $1250 per month using your savings from living in the smaller house
(($300k-$150k)(5% + 5%)(1/12 yr per mo)).
After 7 years, we need a $300k house due to having 3 school age kids.

Option 1 ends up with a $300k house, mortgage balance of over $220k, and $84x savings
Option 2 ends up selling first house and paying 6% commission and moving cost from extra savings. However the savings from the cheaper house were sufficient to pay it off completely, so the mortgage on the new house, rather than owing $220k, is only for $160k (last $10k due to moving costs) and there are still $84x savings.

Even if interest rates go from say 3.15% to 4.15%, you are still better off buying the small house first, because your savings from the small house's lower costs allow you to have a smaller mortgage on the big house than you would had you simply bought the big house first, and this effect is more than enough to compensate for the higher rate on the new house!

Caveat: This assumes sufficient discipline to re-invest the savings rather than buy more clothes, alcohol, and airplane tickets with the money.
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