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OP, Get into the habit of watching Suze Orman on Saturdays. She will scare you away from even thinking about a house purchase until you have much more money saved. :-)
Wow, 130,000.... I live in the DC area and anything priced at that would mean nightly drive by shootings. Lucky you.
Not lucky me, it just made the most financial sense to buy in my area. If I were in DC I would be a fool to buy unless I could afford a $600k home. Owning your own home is an investment, pure and simple. In places like DC, LA, NYC it is much, much more cost effective to rent and invest the difference rather than buy.
I bought in a neighborhood where I think I can turn a profit in 5-6 years with my house. If it wouldn't make me a profit, I would rent my entire life.
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.
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.
I would not spend $150k on a house with a $30k/year salary. I got approved for a home loan and it was for a $93k home with just my income included, not my husband. My salary around the time was $33k. We bought at $108k and have a gross household income of $54k at the time. Mortgage total is $854/month.
Things always happen, expect the unexpected, prepare for the worst and plan for the best is my motto. Always leave as much wiggle room as you can in your budget.
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.
That may have been a good idea in the past, but in the current economy, many people who lose their jobs are lucky to find a new one that pays more than half of what they are earning now. Also, many businesses are not offering raises these days. There's also the chance that one of the earners may have to relocate to find work if there's nothing much going on locally.
I think you should purchase a home based on what ONE member of the household can pay for if the other loses their job. If you rely on two paychecks to pay for the necessaries, you are skating thin. Nothing wrong in being very conservative. If you buy and expand your family, then put two kids in a bedroom. People of other generations did it and survived just fine.
Not lucky me, it just made the most financial sense to buy in my area. If I were in DC I would be a fool to buy unless I could afford a $600k home. Owning your own home is an investment, pure and simple. In places like DC, LA, NYC it is much, much more cost effective to rent and invest the difference rather than buy.
I bought in a neighborhood where I think I can turn a profit in 5-6 years with my house. If it wouldn't make me a profit, I would rent my entire life.
Exactly.... I could never afford where I want to live in the DC area, on my own salary. It is crazy here and I refuse to live 50 miles from work. So, I rent and I do invest my money in other ways.
That may have been a good idea in the past, but in the current economy, many people who lose their jobs are lucky to find a new one that pays more than half of what they are earning now. Also, many businesses are not offering raises these days. There's also the chance that one of the earners may have to relocate to find work if there's nothing much going on locally.
I think you should purchase a home based on what ONE member of the household can pay for if the other loses their job. If you rely on two paychecks to pay for the necessaries, you are skating thin. Nothing wrong in being very conservative. If you buy and expand your family, then put two kids in a bedroom. People of other generations did it and survived just fine.
My point is don't purchase a one-bedroom condo and then turn around and start a family.
My point is don't purchase a one-bedroom condo and then turn around and start a family.
Amen to that!! I have a friend... bought a tiny one bedroom, she had to have it, got married and couldn't sell it. No surprise there... she lives in it with husband and cat and now is pregnant with TWINS!! Still can't sell it and is now going to try and rent it but it will be hundreds less than the mortgage so she is still screwed.
Sounds like you are in a good position. Your mortgage payment sounds pretty low, i can't imagine you finding a place to rent for that little. I bought a house that was a stretch for me by renting out the other bedrooms. Then my mortgage was paid every month by them. Use leases and background checks if you don't know them.
Just make sure you are buying the house under the values in the area in case prices drop again, get a good (not adjustable) mortgage, have some money for emergencies, and do your math from your after taxes pay.
Good luck!
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