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Assuming that you have no other debts that are on your credit report you could probably qualify for a loan of about 250k on 60k/yr. So do you have $250k for a down payment? if not how long will it take you to save up?
Assuming that you have no other debts that are on your credit report you could probably qualify for a loan of about 250k on 60k/yr. So do you have $250k for a down payment? if not how long will it take you to save up?
I don't think so, because the PROPERTY TAXES on a $500k house are not negligible. A $250k mortgage on a $500k house may mean a P&I payment much less than for a typical $500k homebuyer, but the property taxes will still be just as expensive as on any $500k home. Thus even a $250k mortgage is probably too much, since the property tax bills will be ($500k house)-sized!
I don't think so, because the PROPERTY TAXES on a $500k house are not negligible. A $250k mortgage on a $500k house may mean a P&I payment much less than for a typical $500k homebuyer, but the property taxes will still be just as expensive as on any $500k home. Thus even a $250k mortgage is probably too much, since the property tax bills will be ($500k house)-sized!
How much are we talking in property taxes, 60k should qualify for a 250k, 50% LTV loan in most parts of the country where property taxes are less than 2%
Quote:
Originally Posted by ncole1
At a 3X loan amount to income ratio you'd borrow $180K, meaning $320K down. This would take roughly 15 years if you save $15K per year and get decent growth (8% nominal or 5% real, assuming home price growth, income growth, and inflation are all about 3% annual).
What do you all think? How long would it take and how big do you think the down payment should be?
How long will it take? Well, if you live in your mom's basement, eat all her food, don't own a car, use her internet access, get paid under the table while living like a hermit, then you could save your entire salary which would take just under 2 years to get the 20% down.
How much are we talking in property taxes, 60k should qualify for a 250k, 50% LTV loan in most parts of the country where property taxes are less than 2%
That's far too much a stretch and interest rates might not be this low at that time. If the home is $500k due to its large size rather than location, it also would have higher utility bills, insurance, and maintenance costs, so even if OP could qualify it would be stretched too thin.
Quote:
Originally Posted by thelopez2
Where does 3x come from?
It's in the common range of rules of thumb, and probably appropriate for what interest rates will be at that time.
Even if OP does not have a family, I estimate it will take at least 15 years to save for the house so 6%+ mortgage rates are not out of the question.
If OP does end up having a family, fuggedaboutit because he/she probably won't be able to save $15K/year.
If that rule started years ago when interest rates were 8% does it still apply when rates are 4%?
Does it apply equally for someone making 30k year versus 100k?
Irrelevant in OP's situation, $60k/year and I don't expect rates to be this low in 15 years' time. If they are, then great, but don't expect it.
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Well, if you live in your mom's basement, eat all her food, don't own a car, use her internet access, get paid under the table while living like a hermit, then you could save your entire salary which would take just under 2 years to get the 20% down. 
