Suburbanites! What multiple of your income did you spend on your house? (HOA, car insurance)

[Houston321]

Originally Posted by chris_ut

I think that numbers may be skewed lower here since the average poster on this forum seems to have an above average income and as someone pointed out the higher your income the easier it is to get away with a lower multiple.

Exactly my point. I actually see what people's incomes are and the price of home they are buying...and like I said 4X is very...very common.

[Faster10154]

Originally Posted by houstonfan

Sorry to rain on this parade but I feel this is a pointless discussion. Everybody's financial situation, housing needs, and comfort level is different. You cannot compare a % of someone who makes 50k a year to someone who makes 500k a year. If the OP, who supposedly works with money in his day job, can't figure out how much house his family should get, then he probably shouldn't be buying a house yet. Averages mean squat if you are not the average person.
The better questions would be, what costs and pitfalls should he figure into the overall housing cost and what advice would other owners give him? He had a lot of great advice to those questions in another thread.

If this is a pointless discussion, why comment? As I explicitly said in my original post, I wasn't looking for this type of response. I'm simply looking for statistics and curious, that's all.

[deckhanddavy]

Originally Posted by Houston321

Exactly my point. I actually see what people's incomes are and the price of home they are buying...and like I said 4X is very...very common.

Wow...that's a bit worrying. 4x is pretty hard core. So if a couple made 200k, then their possible buying power could be up to 800k. I would call someone crazy for even thinking of buying a home for that much, even if they had no CC or loans to pay off. What do ya'll think? I have a few friends that own 600-700k homes, but they make some mad money. One owns a chain of franchises, and the other is a director and partner of a few clinics. I think it's really interesting to know how some folks manage their money...

[Faster10154]

Originally Posted by deckhanddavy

Wow...that's a bit worrying. 4x is pretty hard core. So if a couple made 200k, then their possible buying power could be up to 800k. I would call someone crazy for even thinking of buying a home for that much, even if they had no CC or loans to pay off. What do ya'll think? I have a few friends that own 600-700k homes, but they make some mad money. One owns a chain of franchises, and the other is a director and partner of a few clinics. I think it's really interesting to know how some folks manage their money...

I have not a clue, however, 4x seems fairly strong. But if you look at the East coast, I think people easily spend that much, if not more. Would I do that?...nope.

[CAHomeschoolMom]

Originally Posted by deckhanddavy

Wow...that's a bit worrying. 4x is pretty hard core. So if a couple made 200k, then their possible buying power could be up to 800k. I would call someone crazy for even thinking of buying a home for that much, even if they had no CC or loans to pay off. What do ya'll think? I have a few friends that own 600-700k homes, but they make some mad money. One owns a chain of franchises, and the other is a director and partner of a few clinics. I think it's really interesting to know how some folks manage their money...

Here in CA, a lot of people have to go that high, If they want to own a home, because of the insane cost of real estate. But in TX, I would say it is definitely unadvisable. I think a max of 2-2.5 time annual salary is a good rule of thumb if you don't live in a very inflated market.

[dejamiller]

Originally Posted by Faster10154

If this is a pointless discussion, why comment? As I explicitly said in my original post, I wasn't looking for this type of response. I'm simply looking for statistics and curious, that's all.

I think it is interesting too and reading from the comments, CD Houston at least are very conscious about their home spending.

[chris_ut]

Originally Posted by Faster10154

I have not a clue, however, 4x seems fairly strong. But if you look at the East coast, I think people easily spend that much, if not more. Would I do that?...nope.

I think multiples have to be lower here than on the coasts due to how how the property taxes are, the payment you can afford at a 1.5% tax versus a 3.8% is a big difference. I just sold my house and bought another that is 25% more expensive but my mortgage payment is almost the same due to the interest rates being 1% less and now I'm out of a MUD so my property taxes are almost 1% lower as well.

[Faster10154]

Originally Posted by chris_ut

I think multiples have to be lower here than on the coasts due to how how the property taxes are, the payment you can afford at a 1.5% tax versus a 3.8% is a big difference. I just sold my house and bought another that is 25% more expensive but my mortgage payment is almost the same due to the interest rates being 1% less and now I'm out of a MUD so my property taxes are almost 1% lower as well.

Totally agree. Tax rate and mortgage rates play a huge factor. 3.8% property tax can almost double your mortgage payment.

[Faster10154]

However, what about the fact that we don't have a state income tax in Texas? Isn't that part of the reason property taxes are higher in Texas?

Also, the NE states seem to have just as high prop. taxes as Texas (NJ, NH, CT, VT).

[natefg2]

I paid $69,000 for my house and make about $26,500 a year. My monthly payment with taxes and escrow etc is $651.. So I'm right at about 2.5x