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Old 12-06-2010, 10:25 AM
 
30,896 posts, read 36,965,098 times
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Quote:
Originally Posted by StandingRoomOnly View Post
For a 600k house, 20% down...mortgage would be 480k...at 5.2% 30 year....payment would be around 2600 a month. Take home after taxes from a 110k salary would be about 2500-2600 every 2 weeks. So the mortgage would be roughly a little less than half of monthly take home pay. For someone who is able to save for and willing to put down 120k on a mortgage, they should have the saving-sense to live within their means (of course not everyone does) and at least 20k-40k extra saved besides. $2600 extra to live on a month is doable for a 2-4 person family who has no outstanding debts besides their mortgage...it may not allow for a high amount of savings every month, but it is doable...even with prop taxes, and extra living expenses... and also assuming there is income growth and bonuses definitely help.

A 600k house is no longer a "shack" since prices have dipped by quite a bit. Granted you aren't likely to buy in the "best-of-the-best" school districts, but it is not the ghetto either.
How many people are really putting 20% down? I suspect, not that many.

I agree with you, if I made 110K, I could probably do your scenario if I wanted to...but I am a saver....and most other people aren't...although I will concede engineers seem like they're better at the savings game than most.

Last edited by mysticaltyger; 12-06-2010 at 10:44 AM..
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Old 12-06-2010, 10:34 AM
 
30,896 posts, read 36,965,098 times
Reputation: 34526
Quote:
Originally Posted by telecomprovisioner View Post
We have too many engineers, not enough land to build on lol.
We don't have a lot of land but we do have some. We just have to build up instead of out. And what little land parcels we have left the NIMBYS want to keep as "open space" to "protect the environment". Yeah...so they can build houses in Stockton and people can drive 60 miles one way to work all the while polluting the air in their cars and jamming the roads...yeah that's great for Mother Earth.

Last edited by mysticaltyger; 12-06-2010 at 10:44 AM..
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Old 12-06-2010, 10:40 AM
 
30,896 posts, read 36,965,098 times
Reputation: 34526
Quote:
Originally Posted by jbunniii View Post
I have two co-workers earning not much more than that (maybe $150k) who each bought $900k houses over the past year. One of them put zero money down and has two mortgages. They may be insane - I certainly think so - but it's patently false that they can't qualify for a loan.
It's anecdotal evidence, I know...but you're confirming my suspicion that a lot of dumb loans are still being made. They're just a little less dumb than they were 5 years ago...but IMO, we need to go back to the 1980s or even earlier before we get to a time when there were REAL lending standards, and I don't think we're anywhere close to that.
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Old 12-06-2010, 12:32 PM
 
312 posts, read 502,279 times
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Quote:
Originally Posted by jbunniii View Post
I have two co-workers earning not much more than that (maybe $150k) who each bought $900k houses over the past year. One of them put zero money down and has two mortgages. They may be insane - I certainly think so - but it's patently false that they can't qualify for a loan.

Arguably if you don't have at least a 750 credit score, you have no business taking on a mortgage. Clean up the credit, pay off any other debt, and then consider whether it makes sense.

I think your numbers are off in any case - I used this mortgage calculator:

Mortgage Calculator

with the following assumptions:

$600k house
$450k mortgage ($150k downpayment)
4.75% interest
30 year loan
excellent credit
1.25% property tax

and it estimated the monthly payment at $2972.41 per month. (32% of gross income)

Even with zero downpayment (utter folly in my opinion) it comes out to $3754.88/month. Very expensive compared with renting, no doubt, but within the range of affordability for someone earning $110k/year. They won't have a lot of cash left for discretionary spending, though, after paying the mortgage and other bills, and saving something for retirement.

Nothing I said above should suggest that I think it's a good idea to buy right now. House prices are still very high compared with all the fundamentals (comparable rents, incomes, and the historical ratio of house prices to both of these), and prices seem to have started to fall again now that the government subsidies have been removed.
This does not seem normal or make very much sense. Especially for a 900K house. What? What bank would finance this with no downpayment? Their monthly must be close to $7000. Also I HAD a 400K house with a 5.95% APR and after HOA's and property taxes etc I was paying about $3100 per month. Also not many people have 150K to put down on a house.

Last edited by The Land; 12-06-2010 at 12:41 PM..
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Old 12-06-2010, 03:49 PM
 
Location: Sacramento
48 posts, read 130,703 times
Reputation: 22
According to my lender when we just did our re-fi, it's extremely hard to get a loan right now, even with good credit/high income. He told me you need at least 20% down or forget it.
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Old 12-06-2010, 03:55 PM
 
Location: Sacramento
48 posts, read 130,703 times
Reputation: 22
Quote:
Originally Posted by mysticaltyger View Post
It's anecdotal evidence, I know...but you're confirming my suspicion that a lot of dumb loans are still being made. They're just a little less dumb than they were 5 years ago...but IMO, we need to go back to the 1980s or even earlier before we get to a time when there were REAL lending standards, and I don't think we're anywhere close to that.

Have you talked to any lenders lately? They only lend if you have a 20% downpayment. For every stack of loans they sort through, only a small % is getting qualified for a home loan now. When the title guy came to our house a few months ago to sign our loan docs said "wow--we are getting a lot of loans rejected nowadays!"
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Old 12-06-2010, 03:59 PM
 
Location: Sacramento
48 posts, read 130,703 times
Reputation: 22
Quote:
Originally Posted by 80skeys View Post
If this is true then I must be making minimum wage with my $83K and my employer must be making out like a bandit with the skills I bring to the table as a Linux/Unix sysadmin (10 years experience).

Yeah, I think you are grossly unpaid.
Network like crazy--sure someone will gladly snatch you & offer you a higher salary.

Hang in there....my husband (from the UK) was recruited here over 10 years ago. He started out as an engineer, making 65k. He is making almost triple that today.
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Old 12-06-2010, 04:27 PM
 
Location: Sunnyvale, CA
6,288 posts, read 11,782,238 times
Reputation: 3369
Quote:
Originally Posted by telecomprovisioner View Post
Yeah, I think you are grossly unpaid.
Network like crazy--sure someone will gladly snatch you & offer you a higher salary.

Hang in there....my husband (from the UK) was recruited here over 10 years ago. He started out as an engineer, making 65k. He is making almost triple that today.
Thanks for the info
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Old 12-06-2010, 04:46 PM
 
23 posts, read 65,902 times
Reputation: 29
San Jose-Sunnyvale-Santa Clara, CA - May 2009 OES Metropolitan and Nonmetropolitan Area Occupational Employment and Wage Estimates

^^ typical wages in IT (and every other field) in Santa Clara County. Average pay for software engineers in applications is $115k; in systems software it's $124k.
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Old 12-06-2010, 05:50 PM
 
30,896 posts, read 36,965,098 times
Reputation: 34526
Quote:
Originally Posted by telecomprovisioner View Post
Have you talked to any lenders lately? They only lend if you have a 20% downpayment. For every stack of loans they sort through, only a small % is getting qualified for a home loan now. When the title guy came to our house a few months ago to sign our loan docs said "wow--we are getting a lot of loans rejected nowadays!"

No, I haven't. I am permanently priced out of the housing market here.
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