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My wife and I put an offer in on a shortsale a few months ago, the bank came back today @ $30k more than our offer, granted their counter is comparable to the neighborhood. We were looking to get a good deal.
The house is 2000 sqft 2 story 3 bed 2.5 bath 3 car garage with RV access and a nice pool in sunny southern California.
banks counter was for $323,000
taxes are about $4,400 per year
Our combined gross income is about 105k per year.
$65k in savings (we plan on putting 15% down)
We have no credit card debt.
No car payments(both have slightly older cars but i went to school originally to be a mechanic and we have a 3rd back up car)
my wife owes about 22k on her student loans still but we have been paying them off steadily at 2x the payment. approx 600 / month to keep it up
Cell phones are $200/month
We have been staying with my parents to save up and only pay them 450/ month however, we are moving out regardless.
A 1 or 2 bedroom apartment runs about $1200-$1600/ month and renting a similar house would cost $2200-$2500/month
So your monthly mortgage and prop tax at that price would be $1,675/mth plus insurance. Putting 15% down would leave you with $16k in savings but after closing costs, I would estimate that you'd have about $7k in savings/emergency left. Are you ok with that? I personally wouldn't be comfortable only having $7k in the bank for emergency/maintenance and would look to save more.
You should post this in the CD Personal Finance forum. They'll really get into the numbers with you. Disclosing your net monthly income, itemized expenses etc. would help too.
My wife and I put an offer in on a shortsale a few months ago, the bank came back today @ $30k more than our offer, granted their counter is comparable to the neighborhood. We were looking to get a good deal.
The house is 2000 sqft 2 story 3 bed 2.5 bath 3 car garage with RV access and a nice pool in sunny southern California.
banks counter was for $323,000
taxes are about $4,400 per year
Our combined gross income is about 105k per year.
$65k in savings (we plan on putting 15% down)
We have no credit card debt.
No car payments(both have slightly older cars but i went to school originally to be a mechanic and we have a 3rd back up car)
my wife owes about 22k on her student loans still but we have been paying them off steadily at 2x the payment. approx 600 / month to keep it up
Cell phones are $200/month
We have been staying with my parents to save up and only pay them 450/ month however, we are moving out regardless.
A 1 or 2 bedroom apartment runs about $1200-$1600/ month and renting a similar house would cost $2200-$2500/month
taking all opinions Thank you,
Your P&I payment on $274,550 (15% down) at 4% (I haven't checked rates in a few months could be lower) is $1,310.74
Taxes: $366.67
Insurance (general estimate for AZ insurance): About $120-160/month
PMI (using FHA rates at .85% because LTV > 80% increase down to remove this): $191.13
Mortgage: $1,988.54 - $2,028.54 (range is for insurance)
Without PMI: $1,797.41 - $1,837.41
Total anual mortgage: $23,862.46 - $24,342.46
Total anual without PMI: $21,568.92 - $22,048.92
Percentage of gross income on mortgage: 22.73% - 23.18%
Percentage of gross income without PMI: 20.54% - 21%
Technically you can afford the mortgage but you are draining your savings almost completely to do it. Even without PMI you have no fallback plan, what will you do if you or your wife lost your jobs in the next year? It is a personal decision, your financials seem to support the mortgage just fine so the question should be are you comfortable with it?
Your P&I payment on $274,550 (15% down) at 4% (I haven't checked rates in a few months could be lower) is $1,310.74
Taxes: $366.67
Insurance (general estimate for AZ insurance): About $120-160/month
PMI (using FHA rates at .85% because LTV > 80% increase down to remove this): $191.13
Mortgage: $1,988.54 - $2,028.54 (range is for insurance)
Without PMI: $1,797.41 - $1,837.41
Total anual mortgage: $23,862.46 - $24,342.46
Total anual without PMI: $21,568.92 - $22,048.92
Percentage of gross income on mortgage: 22.73% - 23.18%
Percentage of gross income without PMI: 20.54% - 21%
Technically you can afford the mortgage but you are draining your savings almost completely to do it. Even without PMI you have no fallback plan, what will you do if you or your wife lost your jobs in the next year? It is a personal decision, your financials seem to support the mortgage just fine so the question should be are you comfortable with it?
Im never comfortable even when i spend 8 dollars on lunch lol.
we saved this money in less than 2 years so to me we dont have a real strong attachment to it. I have always been pretty good at saving money. I am very handy and can handle most repairs on the house so maintenance would be pretty low.
If my wife lost her job within the next year it would be pretty devastating if she could not get another job quickly but i feel like within 12 months we will be able to pad our savings by atleast 14k leaving us with about 21k at the end of 1 year of ownership.. that is assuming we take on no new debts and dont have any real emergency.
Put 20% down avoid PMI because otherwise it stays for life of the loan. I don't believe the once 20/80 equity rule comes into play anymore. You don't want to pay PMI.
If you can't do 20% wait till you can
I think you will be cutting it close. If you have children and have to add in expenses like increased life insurance, health insurance and medical costs, child care expenses, kid's activities, etc., you are going to be broke.
80% first trust of $258,400 p & i of $1215 (fixed @ 3.875% no points)
5% 2nd of $16150 p & i of $100 (variable heloc 3.75% 20 yr am, $100 min pmt)*
Taxes of $366
Insurance $85 ( not sure what rate CA pays)
Total pmt ~ $1400
The above is why you should check into a credit union.
*this is less than most car loans, double down on this one and be left with a loan you don't have to refinance.
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