Affordable property (Wheaton, Liberty: real estate, 2015, HOA fees)

[VasylP]

Hi, everyone!
So, you are ready to buy your first property. Smart decision, isn't it?
You are planning to live in your own home and enjoy life.
And here very important question comes into mind before you start home buying process.

How much should a family of four spend for house ( mortgage, homeowner insurance, property taxes and assosiation fees, if any applies) according to family income and still enjoy comfortable life? Family gross income is 70K-72K per year

Under "comfortable life" I mean following:

-being able finance at least one non-luxury car
-dine out 2-3 times per month
-take 6-7 days vacation once per year
- pay for preschool for 2 kids
- afford health insurance for the whole family
- afford car insurance and so on.

So, let's do some investigation here, folks to not end up with overgelming payments.

Thank you ahead for all replies!

[ToriaT]

It would be tight on your budget. I would assume if you can even afford a house, maybe you have a goodly down payment, many of course do afford it but the house is either modest or maybe a townhouse or condo. And not something new and flashy. Its hard to say what you can afford without specific numbers.

Here is a relatively modest home in Wheaton. it appears to be updated and in good condition. If you scroll down, you will see what the costs will be, including down payment. When you use this Redfin tool, it will help you see if you can afford the house you should jot down other expenses and then add all of it up. You have to pay for food, heat, electric,etc and taxes!!! If this is to expensive for you then you need to either save more, or try to find a lesser cost home. There are some starter homes, the second one is cheaper.
https://www.redfin.com/IL/Wheaton/N1...home/144233069
https://www.redfin.com/IL/Wheaton/19.../home/12585813

[VasylP]

Thank you, Toria T!

Question can be also rephrased as follow : is family of four able to pay for a 250,000 house with 20% downpayment with yearly income of 70-72K or does it appear to be overwhelming for this bugdet?

And then better choice would be to start from something cheaper, like condo or townhouse?

[Kluch]

I'm not in your exact situation OP but our family income is very very similar to yours and we'll be moving to chicago (west suburbs) early next year so we're in a similar situation (family of 4) of trying to figure out what is affordable and what's not. As far as your mortgage affordability question I'd get in contact with a local lender (or real estate agent and then lender) and see what you guys can afford. I know for us, we will probably only be able to do about 3.5% down and at that amount for a 250k house with 6k in taxes the monthly payment is about $1880 which is pretty significant for us. I wouldn't want to go any higher, but with your 20% down your monthly payment will likely be much much lower.

[doodlemagic]

I think this is a very personal question in the sense people have very different ideas of what is a comfortable monthly payment. Also make sure your credit is at it's best as that makes a huge difference. About two years ago I tried to buy a place and payment was going to be $1900 or there abouts. Over the course of the next 5-8 months cleaned up my credit, paid some stuff down and while my property wound up being slightly cheaper, it was fairly comparable and payment was $1300 and some change.

Me personally I like my payment at a point where if I lost a job, or in my case my business went under I could hustle together my mortgage payment plus some.

I'm single, was approved for $450,000 which IMHO is crazy, I wound up buying for $200,000 and even that was a stretch for me in terms of what I'm comfortable with but I'm overly cautious and self employed which makes me even moreso

[CGab]

Try this "how much home can I afford" calculator. No one here can really help you without knowing your entire financial situation, but this will help you. Don't forget that this will only tell you what your payments would be, but you have to also account for property taxes and insurance. Your best bet is to speak to a mortgage lender.


https://www.realtor.com/mortgage/too...E&gclsrc=aw.ds

[doodlemagic]

Originally Posted by CGab

Try this "how much home can I afford" calculator. No one here can really help you without knowing your entire financial situation, but this will help you. Don't forget that this will only tell you what your payments would be, but you have to also account for property taxes and insurance. Your best bet is to speak to a mortgage lender.


https://www.realtor.com/mortgage/too...E&gclsrc=aw.ds

That's a nice tool, I like it. I noticed many mortgage brokers are different than others in terms of the ratio of what percentage of your take home can go towards house payment.

I ran a search on that tool and tells me my monthly payment can be $4517 on a $764,000 place. I have a $200,000 place with a payment of $1300 and that's about as high as I'm comfortable going. My previous place my monthly payment was $764.

Ever since 2008 housing thing and job losses I've become very cautious about my debts, probably too much so.

I think taxes make a huge difference as well. Even staying within Dupage/Will counties just moving over a couple cities I could find pretty similar houses with taxes as low as $3500 and as high as $9000, maybe not exact properties but fairly similar in terms of price and size.

[ToriaT]

Keep in mind those calculators and what you can get approved for is generally way over what people are comfortable with paying. You have to keep in mind...what if you lost your job? How would you make the mortgage payment?

[VasylP]

Thanks everyone for responses! All are really helpful.

Actually, I've been owning a house for 2.5 years now. We purchased it for 251,000 back in 2015. My monthly payment is 957.00 plus property taxes and insurance, totaling in about 1,550.00 per month.

But recently I started having this feeling, that I don't have enough cash to put aside for other needs. Well, this is a temporary issue, since my wife doesn't work at the moment. When she'll go back to work, it shouldn't be a problem.

Therefore, I think about changing a house for 2bdr condo under 200,000. But when I looked at prices, I'd be able to save around 350.00 on condo per month compare to house.

So, here is my dilemma: move to less expensive condo and save approximately $350.00/month, but lost all comfort of private place with garage, back yard, basement, etc., or stay at the house, refuse from some other things in order to save till my wife gets back to work and we can comfortably live and enjoy life at our house?

Are there some other options to consider?...

Let's talk about it!

[ToriaT]

Keep in mind its expensive to sell a house and move. Its probably better to keep your house if you can and try and make it work especially if your wife might go back to work. You have to factor in commission for real estate and also you may have to fix things, moving costs, etc. Also if you buy a condo you have HOA fees so that could eat up any savings you are projecting. If you feel your situation is long term and your house is too expensive then maybe downsize to a condo or a town house. If you purchased your house for 251,000 its not going to be easy finding houses at that price. I'd vote for staying at the house. Maybe try budgeting better. Save on food by shopping at Aldi. Put off any purchases of stuff until your wife gets back to work.