120K/yr and still can't get a nice house in a decent neighborhood (Sacramento: mortgage)

[rockx]

It is becoming the de-facto standard to ask the buyer to pay closing costs, you buy down the rate and take a second mortgage.

But still can you afford a 3000 a month mortgage on 130k? I make 130 and I couldn't and still have a life.

Don't forget to add in:
Retirement investments (401k, IRA, Roth)
Utilities
Car(s) +Insurance + Gas (since you have to drive everywhere here)
Cable+internet+phone
Groceries

I think you will find yourself what we call "house poor".

I recommend:
Rent, invest your cash, and wait for people to move out, housing bubble to bust or find another state to live in.

[JustAGoodPerson]

join the club. thats why we are moving out of state...

[DawnW]

This is why we moved out of CA. In retrospect, we could have stayed in our house we bought in 2000, but DH wanted to sell, take the profit and run. So we did.

We could move back (I want to), but the cost of housing has made it difficult for us to do that.

Dawn

[UseJeff]

Originally Posted by markas214

Very informative. I could also avoid the PMI by doing a 10% second mortgage.

Yes you could avoid PMI with a 10% second, but now that you can write PMI off of your taxes, at least for this year it's worth comparing the two. It's rare to find a 2nd at lower than 7.5% fixed, or 8% HELOC (this is assuming proving your income and smokin credit.)

Another consideration is, that you are locking up this 10% in a worse rate, and at some point you will probably want to refinance it, especially if you get a more realistic interest rate of around 9%. An interest only payment at 9% based on the 500K purchase price would give you a loan of 50K, and a payment of $375.

In addition, once the housing market settles in the next year, houses will start to crawl back up in value. Granted I don't expext any normal increases in value for a couple years, but... once your home reaches a value which makes your loan amount 80% of the new value, you can have an appraisal done, and remove the PMI (private mortgage insurance).

Most people who have had a loan in CA have been accosted by mortgage people for the last 2 years, and it's been a strong consensus to avoid PMI when possible. It's always worth comparing, and now that you can write it off it's often a better choice these days, especially with where rates are.

[NewToCA]

Originally Posted by markas214

I can take a job in Roseville for $110,000/yr plus my wife working part-time we would make $120,000-$130,000. We would qualify for a $400,000 mortgage which doesn't seem to buy much in the area even though we'd be earning twice the median household income. I can see how the brokers were able to suck people into these hybrid ARM loans as it doesn't seem like most families can afford a home without spending half their income on financing. I would like to move but I doubt I'll buy. How do people afford to live anywhere in California these days? The wages aren't spectacular and housing seems out of reach. Are prices still dropping?

Getting back to the original posting, I was curious as to what is available at a comparitively modest price in the Roseville, Rocklin and Lincoln areas, all of which are generally pretty nice. Using the criteria of an asking price of $325 - $350 K, and a minimum of 3 bedrooms, 2 bathrooms and 1500 square feet of living space, I was able to find over 50 listings, and if I expanded the top $ figure to $375 K, I came up with well over 100.

A $300 K mortgage has a payment of a little under $2,000 per month at 7% (fixed rate), and add in another $400 or so for property taxes and insurance and you should have a payment below $2,500 per month. This shouldn't be so difficult at your income level.

Doesn't seem that insurmountable to me.

[City Boy]

Originally Posted by rockx

It is becoming the de-facto standard to ask the buyer to pay closing costs, you buy down the rate and take a second mortgage.

But still can you afford a 3000 a month mortgage on 130k? I make 130 and I couldn't and still have a life.

Don't forget to add in:
Retirement investments (401k, IRA, Roth)
Utilities
Car(s) +Insurance + Gas (since you have to drive everywhere here)
Cable+internet+phone
Groceries

I think you will find yourself what we call "house poor".

I recommend:
Rent, invest your cash, and wait for people to move out, housing bubble to bust or find another state to live in.

You're forgetting he's married to somebody brining in an income also. I make around 100k per year and can afford a 3000 dollar mortgage alone if I wanted but i'm married. My wife makes about 65k a year. After all our bills are paid we have well over 3000k per month left over to do what we want with.

[UseJeff]

You probably don't have access to MLS (multiple listing service), but most homes are listed on Sacbee. Search Placer county for Roseville and the surrounding area. Here's the site: Sacramento Real Estate, Sacramento Homes and MLS - sacbee.com

[rockx]

Originally Posted by City Boy

You're forgetting he's married to somebody brining in an income also. I make around 100k per year and can afford a 3000 dollar mortgage alone if I wanted but i'm married. My wife makes about 65k a year. After all our bills are paid we have well over 3000k per month left over to do what we want with.

He said they would make 130 combined.

You make 100k and you can afford a 3k mortgage alone? How? I mean what is that like 4200 Net a month...3k of that going to the house, I don't see how it is feasible while having any life at all.

[City Boy]

Originally Posted by rockx

He said they would make 130 combined.

You make 100k and you can afford a 3k mortgage alone? How? I mean what is that like 4200 Net a month...3k of that going to the house, I don't see how it is feasible while having any life at all.

After Taxes I bring home $6200, I gross a little over $8900 per month. Thats 106k per year. Thats more than enough to live comfortably here. Not including my wifes salary. His combined income is 130k or $10,833 a month Before taxes plenty of money.

[Team Mom]

Pulled my utility stubs for you. My home is 2500 sq feet. For the month of March my bill was $88 for gas, and $156 for electric,water and waste. Month of May was $43 and $160.

Gas is way higher in the winter for heat purposes. Electric climbs in summer for air. Usually about $100 more either way for coldest and hottest months.

We bought out here in West Roseville 13 years ago. 1350 sq feet for $132K. Had we not bought then, we wouldn't be here now for sure! I'm a SAHM and it's not easy. Things can add up quickly. It's sort of "expected" that everyone can keep up with the Jones's--but I'm not sure just who they are! Lots of overextending! Nice mall with upper end shops, SUV's and "pretty cars", brand names, pools, pest control, landscapers, upscale grocery stores--you don't have to join in, but it's definately everyday living here.

Tough decisions for you!