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.
If you are debt-free, then 600K-650K sounds right with a $150 down payment. If you have other debt on which you are obligated to pay monthly then the advised purchase price amount will decrease.
My husband and I are looking to buy a house. We have $150,000 to down. We make approximately 110,000 combined. How much house can we afford?
$300,000? $400,000?
One factor not mentioned so far, is that if you can find a house you like for $567K or less, your $150K down will take you to a mortgage of $417K. This helps you avoid taking out a "jumbo" mortgage, which has two advantages.
First, you should be able to get a lower rate. Second, it will be easier to qualify for the loan. NOTE: This may be moot if the "stimulus" package is passed with the one year provision to redefine "jumbo" as a much higher amount (possibly around $740K). Good luck.
Also, please take into account your lifestyle. Do you like taking an annual vacation? Just because a lender qualifies you for a 500K mortgage doesn't mean you need to get one. Maybe you can afford a $2K monthly mortgage payment, but will you be able to afford anything else? Repairs, unexpected expenses, entertainment, etc.
Twenty years ago, I was approved for a $250K mortgage. I had 25% cash down. Quite a bit at the time. I decided I liked my lifestyle and still bought a lot of house for 160K in an up and coming neighborhood.
Even if your DTI is great and you qualify for a large mortgage, don't make yourself "house poor". Take a very close look at the life you want to live and whether or not you want to sacrifice it for a McMansion.
Firstly - congrats on having REAL money to put down, that makes you an anomoly these days.
Second - as someone above mentioned, a lot depends on any other debt you may have.
Third - most sane recommendations are for your PITI on a house - that is mortgage payments, insurance and property taxes to be in the range of 25% - 30% of your monthly gross income.
Fourth - What mortgage you can get, and what you can actually afford are two completely different things. While credit has tightened considerably in recent months there may still be some unscrupulous mortgage broker (who is a commissioned salesman, not a financial advisor) there may be someone out there promising the sun, the moon and the stars. That does not mean it is right for you. You have to look at your total budget - housing, transportation, savings, 401k or IRA, and other outgoings and work out what is reasonable for you. You also need to factor in money put aside for future maintenance on the house.
Fifth - With the best will in the world, and with all due respect to the professionals on this board, Real Estate Agents and Mortgage Brokers are NOT the people to tell you what you can afford. They are commissioned salespeople, not financial advisors. Sit down with your accountant or financial advisor, or find a responsible and reputable one and pay him to give you clear, unbiased advice as to what is in YOUR best interest and what budget will work for you. Get advice from someone with proper legal fiduciary responsibility.
And good luck in your house search.
This is a very well thought out post.
No one can tell you what you actually can "afford" because of many reasons. We don't know if you live within your means or if money burns a hole in your pocket. We don't know if you have debt. Do you have children? Do you pay yourself first? Do you have children?
Those are just some examples. My suggestion would be to run a budget of all your fixed and variable expenses to start. See how much comes in and goes out to get an idea where you are. Until you do that, you wouldn't really have an idea what would be a ballpark amount.
Thanks everyone for taking the time to reply to my post. I greatly appreciate it. We just want to make sure we do not get more house than we can afford. We would like to find a house that we can stay in long term and raise our children in (once we have them) and skip the starter home. We have factored in all our expenses, property taxes, and savings when creating our budget. We just wanted to make sure there weren't other factors to consider. Thanks again everyone!
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.
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.
