U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Real Estate
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 12-04-2013, 08:49 PM
 
510 posts, read 1,059,629 times
Reputation: 348

Advertisements

Quote:
Originally Posted by jdhall1 View Post
Id put 100k down and mortgage 300k.
The person is looking at $550k homes.
$150k down.
$400k remaining as the mortgage.

They have not come into a windfall. They have $150k to put down. If they had more, they put more down, as a way to lower the monthly payment, which may be a stretch on $100k.

$400k mortgaged at 4.25% is about $2500/mo. including $4k taxes and $2000/yr insurance.
Take home salary for $100k would be about $6000/mo.

And $2500 is comparable to renting a 2BR apt.

Actually, I guess it's quite doable.
Maybe even smarter than renting.
I guess I just needed to run the numbers.

Quote:
Originally Posted by CTartist&musician View Post
BTW, I would love to know where you can buy a house for $550,000 in CT and only have $4,000 in taxes. Maybe I will retire there lol.
Greenwich. Taxes are actually under $4000, I believe.

Last edited by ShouldHaveLeft914; 12-04-2013 at 09:06 PM..
Rate this post positively Reply With Quote Quick reply to this message

 
Old 12-04-2013, 08:51 PM
 
Location: Coastal Connecticut
17,666 posts, read 21,229,778 times
Reputation: 5100
Quote:
Originally Posted by ShouldHaveLeft914 View Post
$400k mortgaged at 4.25% is about $2400/mo. including taxes.
Take home salary for $100k would be about $6000/mo.
Actually, I guess it's quite doable.
I guess I just needed to run the numbers.
I think your numbers need to be adjusted a little. Don't forget homeowners insurance, which will be at least $100/month on a house with that value.

Take home salary for $100k in CT is more like $5600/month, and that's before any insurance/401k contributions.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 12-04-2013, 08:57 PM
 
Location: Fairfield, CT
6,243 posts, read 9,161,817 times
Reputation: 7191
Quote:
Originally Posted by ShouldHaveLeft914 View Post
A single friend looking at houses for $550,000 with $4k taxes.
Planning on putting $150k down and taking a mortgage for $400k.

This person is maxed out in their career and earns $100k.
It will not go up in the future.
Can 100k income really get approved for a $400k mortgage?
Will this really crap this person's lifestyle?

Would they have to do some sort of 5/1 ARM?
If so, do you just keep refi'ing every 5 years to keep it sustainable?
Buying a house you can't afford with an ARM, with the intention to keep refinancing it, is the dumbest thing you can do. How do you think so many people lost their houses in the last downturn?

And what happens if interest rates go high?

A person who makes $100K per year can't afford a $400K mortgage. There's no way around that.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 12-04-2013, 09:55 PM
 
510 posts, read 1,059,629 times
Reputation: 348
Quote:
Originally Posted by dazzleman View Post
A person who makes $100K per year can't afford a $400K mortgage.
There's no way around that.
You sure about that?
Are you saying that AFTER looking at my calculations above?

The person is looking at $550k homes.
$150k down. $400k remaining as the mortgage.

Take home salary for $100k would be about $6000/mo.
$400k mortgaged at 4.25% is about $2500/mo. including $4k taxes and $2000/yr insurance.
And $2500 is comparable to renting a 2BR apt, which is commonplace on $100k income.

Spending under 50% of your take home $2500-$3000/mo of your $6000 takehome on housing is not exactly unheard of (think renters in NYC)
...particularly if you're debt-free and frugal.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 12-04-2013, 09:55 PM
 
642 posts, read 733,060 times
Reputation: 280
Quote:
Originally Posted by ShouldHaveLeft914 View Post
The person is looking at $550k homes.
$150k down.
$400k remaining as the mortgage.

They have not come into a windfall. They have $150k to put down. If they had more, they put more down, as a way to lower the monthly payment, which may be a stretch on $100k.

$400k mortgaged at 4.25% is about $2500/mo. including $4k taxes and $2000/yr insurance.
Take home salary for $100k would be about $6000/mo.

And $2500 is comparable to renting a 2BR apt.

Actually, I guess it's quite doable.
Maybe even smarter than renting.
I guess I just needed to run the numbers.



Greenwich. Taxes are actually under $4000, I believe.
I understand now.

I would go for it if I was this single person. If it was a married two income couple with children I would say they are cutting it too close. But here is the thing a single person can always do. If things get tight they can rent out part of the house if they are so inclined. If things got tight they could also move into a smaller house or condo and rent out the house for investment.

It seems like this house is in a very good town (Greenwich/Darien maybe?) becuase of the low mill rate. I think you can't go wrong in a very good town. Of course it's not my money but I still say take the shot while you are young.

The only caveat I have is the down payment. I would try to put down as little as possible. That down payment puts shivers down my spine because I bought my house for about the down payment amount.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 12-04-2013, 11:34 PM
 
Location: Coastal Connecticut
17,666 posts, read 21,229,778 times
Reputation: 5100
Put down less and have a 450-500k mortgage with a 100k income?

This is the kind of scenario that caused the real estate bubble to burst.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 12-05-2013, 03:06 AM
 
11,807 posts, read 6,950,010 times
Reputation: 8184
Dude, that's nothing. A friend of mine making $10 an hour bought a $500k house in San Francisco. His wife also works and makes about $10/hr too so that helps a little. Still guys, if they can do it... It helps that they sold it for more than double what they paid for 20+ years later.

At any rate here is the breakdown of the estimated cost of ownership per month:

mortgage (assuming 4.375%, 30 yr fixed): $2000/mo
Home insurance: $100
electricity/water/garbage: $200
Property tax (1.2%?): $500
Maintenance: $200

That's a total of $3,000 expense. I don't know much about CT taxes rate, but it sounds like it's not that high, so I just plucked in 1.2% as the property tax rate.

Now, assuming take home salary of $5,600 - $3,000 = $2,600 left for food/necessities/entertainment/other bills. That's not a lot, but it's doable depending on the number of people in the house hold, the area's COL, whether there's student loan/car loan, etc. It's tight but it's doable in the right circumstance.
.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 12-05-2013, 04:18 AM
 
3,064 posts, read 2,990,365 times
Reputation: 1469
The rule of thumb I have always heard is that your mortgage should not exceed 2.5x your gross income. By that metric, they are being very aggressive, and there is not much room for error.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 12-05-2013, 04:50 AM
 
510 posts, read 1,059,629 times
Reputation: 348
Quote:
Originally Posted by Stylo View Post
Put down less and have a 450-500k mortgage with a 100k income?

This is the kind of scenario that caused the real estate bubble to burst.
Do you have any hard numbers, or are you just parroting what you read in USA Today?
What exactly does a real estate bubble have to do with someone who brings home over $6000/mo taking on a $2500/mo obligation?
We are not talking about someone making $10/hr who brings home $2000/mo taking on a $500k mortgage.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 12-05-2013, 06:53 AM
 
Location: Connecticut
29,003 posts, read 45,573,532 times
Reputation: 9004
Quote:
Originally Posted by Mike 75 View Post
The rule of thumb I have always heard is that your mortgage should not exceed 2.5x your gross income. By that metric, they are being very aggressive, and there is not much room for error.
You really can't go by this metric. It is should be based on monthly expenses and income. Jay
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Settings
X
Data:
Loading data...
Based on 2000-2020 data
Loading data...

123
Hide US histogram

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2020, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top