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Old 12-21-2013, 11:08 AM
 
25,058 posts, read 27,269,755 times
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Quote:
Originally Posted by bad93ex View Post
I am figuring that once wife has finished college (RN) we should be able to afford a house priced around $287k according to this scale. Amazing considering we were both making less than $10/hr 5 years ago.
I hope you'll heed the words of StealthRabbit. Just in case you don't believe him, you can also read the book The Two Income Trap by Elizabeth Warren. She said one of the main causes of middle class bankruptcies was couples relying on 2 incomes to qualify for a house. When one spouse lost his/her job, there was no one else to pick up the slack.

The Two-Income Trap: Why Middle-Class Parents are Going Broke: Elizabeth Warren, Amelia Warren Tyagi: 9780465090907: Amazon.com: Books
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Old 12-21-2013, 02:37 PM
 
1,777 posts, read 1,215,490 times
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Quote:
Originally Posted by StealthRabbit View Post
As tempting as it is... afford a house priced around $287k Don't do it... (the end of frugality for many yrs...). BE wise... a house not always wise (and is OFTEN not wise, especially at 2.5 the annual income of 2 ) Poof... one of you could get sick or injured or fired / outsourced... or die.
People in Vancouver would be extremely happy if houses cost $287K. Check out how much crazy Canadian house prices have risen to. And no, most Canadians do not make that much money.

Average Canadian Housing Prices - RBC Royal Bank

And these properties are not new either. You still have to spend thousands to fix it up.
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Old 12-21-2013, 02:44 PM
Status: "Hunt 3 coming soon! Sigh!" (set 1 day ago)
 
5,568 posts, read 5,623,273 times
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I do not think it is possible. I paid slightly over 2.5X my rent when I purchased my property.
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Old 12-23-2013, 06:57 PM
 
14,818 posts, read 19,018,858 times
Reputation: 20532
Quote:
Originally Posted by dmlarue1 View Post
..Everyone asks us when we will get a bigger house. We really don't need it, 2 people in a 3bed/2bath 1100 sq ft house is plenty. And the peace of mind it gives us is worth every penny!

Amen. I bought a 1200 sq ft starter-house in 1980 and, although my salary increased tenfold over the years, I never felt the need to buy anything bigger. The house was paid off long ago and I was able to do some nice remodeling. Now I'm retired with no mortgage and lots of peace of mind.
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Old 12-24-2013, 07:17 AM
 
106 posts, read 113,031 times
Reputation: 105
Quote:
Originally Posted by mysticaltyger View Post
I hope you'll heed the words of StealthRabbit. Just in case you don't believe him, you can also read the book The Two Income Trap by Elizabeth Warren. She said one of the main causes of middle class bankruptcies was couples relying on 2 incomes to qualify for a house. When one spouse lost his/her job, there was no one else to pick up the slack.

The Two-Income Trap: Why Middle-Class Parents are Going Broke: Elizabeth Warren, Amelia Warren Tyagi: 9780465090907: Amazon.com: Books
What if all indicators are pointing towards your income increasing by another 40% within the first five years if owning the home? We have three children so there is a need for at least 3 bedrooms.
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Old 12-24-2013, 09:28 AM
 
Location: All Over
3,971 posts, read 4,299,892 times
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Quote:
Originally Posted by pete6032 View Post
I hear this rule of thumb all over. Use 2.5x your HH salary as a rule of thumb. If you are a single person in this economy, making $50,000 per year, then the maximum house you could afford is $125,000. That doesn't buy much. How do couples do it when one parent stays home? I really don't understand how we can have so many houses priced $250,000+ in the US? That would be an income of $100,000. That's doable for a couple in their mid to late 30's, but anything younger than that you're probably not going to break $100,000 take home pay as a couple unless you're either a lawyer, doctor, or engineer.
its not that crazy at the time i bought my house i think i was making about 30k a year maybe 23 after taxes. i bought a home for 92k. my mortgage is only $860 for a 30 year with only 3% down. i live in an area with high taxes as well so my mortgage all included would probably be $100 ore more cheaper in another area. rent in my area is probably $800-$1200 for a 1 bedroom so im saving over renting. its really not that crazy you have 30 years to pay it off.

how many people do it is buy what they can't afford. i have a coworker who makes same money as me plus has 3 kids and a wife. he bought a house for 230k why i dont know. well he hasnt paid his mortgage in over 3 years and they still havn't kicked him out
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Old 12-24-2013, 09:50 AM
 
Location: Central CT, sometimes NH.
3,262 posts, read 4,956,712 times
Reputation: 3042
Even here in expensive Connecticut there many $125,000 homes available. They may not be in the top school district or neighborhood but there are many fine places to live in safe and convenient locations. Unlike most of the homes portrayed on television most starter homes do not have granite, stainless, or deluxe on-suites but are still perfectly comfortable places to live and raise a family.
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Old 12-26-2013, 03:13 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
21,087 posts, read 38,054,900 times
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Quote:
Originally Posted by bad93ex View Post
What if all indicators are pointing towards your income increasing by another 40% within the first five years if owning the home? We have three children so there is a need for at least 3 bedrooms.
Don't do it... find a better option and make some FAMILY sacrifices. It is good for Character.

If you can't resell it tomorrow for 110% the purchase price, OR if you cannot rent it tomorrow for 1%/month of the purchase price... DON"T BUY it.

Better deals are possible.

Saddled with abnormally high house debt is not POSITIVE, for the family. Spend less on housing and more on Travel!!! That is great for families. and can be very cheap... we did '12 week field trips for under $2000. (That is ~ $650/ month and included food and gas)

We built our own house as a family homeschool project (free labor..). AND many more to follow to raise $$ for college (and more travel )


We washed dishes in the bathub and didn't have sheet rock on the shower for months... (need to travel while the weather is nice!) Interior work can wait till winter!
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Old 12-26-2013, 03:34 AM
 
Location: US
17,152 posts, read 16,698,442 times
Reputation: 13093
Quote:
Originally Posted by pete6032 View Post
I hear this rule of thumb all over. Use 2.5x your HH salary as a rule of thumb. If you are a single person in this economy, making $50,000 per year, then the maximum house you could afford is $125,000. That doesn't buy much. How do couples do it when one parent stays home? I really don't understand how we can have so many houses priced $250,000+ in the US? That would be an income of $100,000. That's doable for a couple in their mid to late 30's, but anything younger than that you're probably not going to break $100,000 take home pay as a couple unless you're either a lawyer, doctor, or engineer.
Basically you should keep your front debt-to-income ratio at or below 29% of monthly income and your back debt-to-income ratio at or below 41%.
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Old 12-26-2013, 07:37 AM
 
106 posts, read 113,031 times
Reputation: 105
Quote:
Originally Posted by StealthRabbit View Post
Don't do it... find a better option and make some FAMILY sacrifices. It is good for Character.

If you can't resell it tomorrow for 110% the purchase price, OR if you cannot rent it tomorrow for 1%/month of the purchase price... DON"T BUY it.

Better deals are possible.

Saddled with abnormally high house debt is not POSITIVE, for the family. Spend less on housing and more on Travel!!! That is great for families. and can be very cheap... we did '12 week field trips for under $2000. (That is ~ $650/ month and included food and gas)

We built our own house as a family homeschool project (free labor..). AND many more to follow to raise $$ for college (and more travel )


We washed dishes in the bathub and didn't have sheet rock on the shower for months... (need to travel while the weather is nice!) Interior work can wait till winter!
So you're saying out of $7k/month take-home pay I should only buy a house for around $100k ($20k DP) based upon one person's income. Monthly mortgage amount should be around $700 monthly with everything included.
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