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Old 07-03-2014, 11:01 AM
 
136 posts, read 415,174 times
Reputation: 51

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Hello there, you fine Utah folks. Been browsing this sub-forum with great interest for some time now. Loving some of the discussions here!

My girlfriend (a Salt Lake City area native) and I (a Southern California guy) are considering a move to the SLC metro area (it's that or stay in SoCal, where we live). We're drawn to UT for all the reasons you know: lower cost/lower stress lifestyle, amazing natural splendor/activities, great place to raise young children, etc. We're open to almost all areas except the West Valley or anywhere near the smelly salt flats - a home from Layton in the north down to Draper in the south would suit us just fine.

Our questions are more general than specific, and pertains specifically to what mortgage loan amounts we can qualify for. I have near perfect credit, my girlfriend (to be wife) has good credit. No large debts. Combined projected income of $85,000-100,000 per year.

This part is just 'FYI', but I've done a LOT of online real estate research for the SLC area, and I think that $400,000-$450,000 gets you a nicely updated and spacious home - our ideal property (outside of location) is 3000-4000 sq. ft., 5-6 bedrooms, 3 baths, 2 car garage (3 is better), with a finished basement. That might be an upper-end home in UT in terms of cost, but it's DIRT CHEAP for a California boy like me! I like!

So now you know: I already know what I want in a home - but what I need to ascertain is whether our current income of $85-100 K can fund such a mortgage.

Any insight from knowledgeable SLC natives/residents would be greatly appreciated! Thank you so much.
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Old 07-03-2014, 11:19 AM
 
Location: Metro Detroit
1,770 posts, read 1,752,465 times
Reputation: 3468
Depends on what you can put down and how much debt you have.

For best case scenario:
Let's say you make 8k a month (96k a year)
I'll assume you have little debt (maybe a car payment on something sensible like a Corolla, that eats up $300 a month)
I'll also assume that you can make a 20% down payment (about 80k), because you should be able to do that to buy a house.
You have stellar credit, like 800 range.
In that case you should be able to qualify for a house up to about 450k, maybe even 500k!

Now lets assume a less ideal scenario, probably more at home for the typical American
We'll keep your income the same (96k a year)
However, now you have some student loan debt ($400 a month) two car payments (less sensible, you have an Explorer and a 3-series at about $800 a month) and some old credit card debt you really don't think about ($50 a month).
You also haven't saved up a large down payment, so you can afford about 20k down.
Your credit is decent, maybe in the 700 range.

Now you're looking at 300k being the max you'll qualify for.

If your situation is worse than that... well... maybe you should wait a while before buying or look into a townhome if you just MUST own. Also, West Valley isn't bad. I swear I need to post pictures of my neighborhood or something for people to believe I don't live south of 8-Mile Road in Detroit.. (and let's just say my situation looks like a hybrid of those two, I simply wanted a super low mortgage that let me put a large amount into a 401k..)

So the answer is maybe. It depends on how responsible you've been with your finances in the past ten or so years. Based on what you said the top scenario may work for you, as long as you've saved for a large down payment. Otherwise you might be stretching things to get a 400k house if you only have 20k to put down..
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Old 07-03-2014, 10:57 PM
 
Location: Central City, SLC
763 posts, read 1,674,492 times
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Why not just visit your bank or a mortgage lender and see what amount you qualify for? You should prequalify before you shop seriously anyway.
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Old 07-04-2014, 10:06 AM
 
Location: 89121
413 posts, read 1,425,471 times
Reputation: 336
Usually 36% of gross income for PITI. Assume (90k income x .36)= 32,400
32,400/12= 2,700.
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Old 07-04-2014, 09:27 PM
 
1,961 posts, read 3,748,336 times
Reputation: 2762
I think I am quite a bit more frugal. My husband and I gave a combined income of about $125k. The only debts we have are my student loan, which is $125 per month. And a car payment of $485.

We could have qualifies foe $400k loan, but I prefer to nor put all.of my money into a home payment. We bought a home in layton for $200k. I feel it is a very nice home. It has everything I want and is very conveniently located. I however could care leas about granite and stainless steel.
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Old 07-05-2014, 08:39 AM
 
1,961 posts, read 3,748,336 times
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oh, and just to add, my credit score is in the 800 and my dh is in the high 700.
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Old 07-07-2014, 10:26 AM
 
136 posts, read 415,174 times
Reputation: 51
Quote:
Originally Posted by Geo-Aggie View Post
Depends on what you can put down and how much debt you have.

For best case scenario:
Let's say you make 8k a month (96k a year)
I'll assume you have little debt (maybe a car payment on something sensible like a Corolla, that eats up $300 a month)
I'll also assume that you can make a 20% down payment (about 80k), because you should be able to do that to buy a house.
You have stellar credit, like 800 range.
In that case you should be able to qualify for a house up to about 450k, maybe even 500k!

Quote:
Originally Posted by Geo-Aggie View Post
Now lets assume a less ideal scenario, probably more at home for the typical American
We'll keep your income the same (96k a year)
However, now you have some student loan debt ($400 a month) two car payments (less sensible, you have an Explorer and a 3-series at about $800 a month) and some old credit card debt you really don't think about ($50 a month).
You also haven't saved up a large down payment, so you can afford about 20k down.
Your credit is decent, maybe in the 700 range.

Now you're looking at 300k being the max you'll qualify for.

Those two scenarios are actually extremely helpful and serve as a point of reference. Thanks!

I think that my situation will be somewhere in between the two. Neither me nor my girlfriend/future wife have any major debt (no student loan debt, no massive credit card debt that can't be paid off at any point within 2-3 months). Our credit is excellent, and we don't have extravagant tastes coupled with meager means (a bad combo for anyone). I project that in about 2 years we'll have around $50,000 saved up for a down payment. We may get a couple of used hybrid vehicles, though...

Geo-Aggie: how does that change our prospects, in your opinion? Thanks in advance.

Quote:
Originally Posted by Geo-Aggie View Post
If your situation is worse than that... well... maybe you should wait a while before buying or look into a townhome if you just MUST own. Also, West Valley isn't bad. I swear I need to post pictures of my neighborhood or something for people to believe I don't live south of 8-Mile Road in Detroit.. (and let's just say my situation looks like a hybrid of those two, I simply wanted a super low mortgage that let me put a large amount into a 401k..)
I'm from California so I am not at all bothered by the prospect of getting a townhome - that's the norm in a state with such high real estate prices. However my girlfriend says that it's kind of 'looked down upon' if you own a townhome in Utah, as single family homes are (relatively) so affordable. Might sound silly to some, but that's what she said...

As for the West Valley - LOL I hope I didn't offend you or anyone with that comment. There are cities in Southern California that are known to be run-down, but many of them also have relatively safe/wealthy pockets. But with that said, I would still like to shoot for the best area I can afford...

Quote:
Originally Posted by Geo-Aggie View Post
So the answer is maybe. It depends on how responsible you've been with your finances in the past ten or so years. Based on what you said the top scenario may work for you, as long as you've saved for a large down payment. Otherwise you might be stretching things to get a 400k house if you only have 20k to put down..
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Old 07-07-2014, 10:29 AM
 
136 posts, read 415,174 times
Reputation: 51
Quote:
Originally Posted by easternerDC View Post
I think I am quite a bit more frugal. My husband and I gave a combined income of about $125k. The only debts we have are my student loan, which is $125 per month. And a car payment of $485.

We could have qualifies foe $400k loan, but I prefer to nor put all.of my money into a home payment. We bought a home in layton for $200k. I feel it is a very nice home. It has everything I want and is very conveniently located. I however could care leas about granite and stainless steel.
It's never a bad thing to err on the side of frugality, esp. if it means living within your means. May I ask you which part of SLC you settled in? My GF suggested that we purchase a starter home in Davis County for around the amount you paid, but I'm a lifelong urbanite and would prefer something more central to Downtown, in Salt Lake County (but I'm flexible, depending on the various factors that affect the final cost).
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Old 07-07-2014, 10:30 AM
 
136 posts, read 415,174 times
Reputation: 51
Quote:
Originally Posted by NYtoVT View Post
Usually 36% of gross income for PITI. Assume (90k income x .36)= 32,400
32,400/12= 2,700.
What's PITI? Thanks.
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Old 07-07-2014, 10:32 AM
 
136 posts, read 415,174 times
Reputation: 51
Quote:
Originally Posted by CCSLC View Post
Why not just visit your bank or a mortgage lender and see what amount you qualify for? You should prequalify before you shop seriously anyway.
You're right - I decided to drop in here and get some opinions on a whim.
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