Suburbanites! What multiple of your income did you spend on your house? (lender, to buy)

[Glossa]

Unless I missed it TexasGSD, you didn't calculate anything for gasoline either.

[TexasGSD]

#43
Today, 03:55 PM
TexasGSD
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My retirement comes out before my take home pay, and I have a nice matching program. I did not mention car insurance but I am around $85.00 a month for car insurance.The $800-$1500 a month was the savings/ money to I can spend if I need to. Take into account for car insurance and gas lets takes another $150.00 off these cost which will put me at $650-$1350 worst case scenario. Mind you I am being very very conservative with these numbers as I do not actually spend that much.

[chris_ut]

Originally Posted by TexasGSD

I have a company phone, and do not use a land line. I do not have a yard so I do not need water for the yard or any lawn maintence. I pay 16.95 a month with Smith Thompson for home alarm.

If your utilities are $850.00 a month thats some of the highest I have ever seen. How old is your home?

2008. When I say $850 a month that is all standard utilities: electric, gas, water, internet, tv. $850 is for the summer, in the winter it is around $650. What kind of house are you buying with no yard, a condo?

[TexasGSD]

NO the warehouse looking townhomes they have around downtown. They are made from sheet metal and have rocks for a back yard.

[kreeyax]

Wife and I spent right around 2X our combined income on our home. We also put 20% down, so the amount financed was more like 1.65X income.

TexasGSD... if you are frugal you can do it. But a lot of people like to buy play toys, electronics, furniture, clothes, eat out, etc.. A lot of us have kids too, which can be very expensive. And of course with owning a home it always seems like there's something that needs repair or you want to improve on.

[jtothemak]

Originally Posted by kreeyax

Wife and I spent right around 2X our combined income on our home. We also put 20% down, so the amount financed was more like 1.65X income.

TexasGSD... if you are frugal you can do it. But a lot of people like to buy play toys, electronics, furniture, clothes, eat out, etc.. A lot of us have kids too, which can be very expensive. And of course with owning a home it always seems like there's something that needs repair or you want to improve on.

This, I never understood why people would spend so much of their income on buying a home to just stare at 4 walls. I would buy less of home or stay renting, buying a home has a lot of hidden costs and is a gamble that prices will always go up. Don't count on your income always going up, what if it doesn't. What if you lost your job tomorrow or became disabled. Think about what would happen to our home values if the oil & gas industry starts shrinking, it is eventually has to stop going up especially with so many tree huggers out there wanting alternative energies. The line of if I rent in the same area it is more expensive is not a good excuse then maybe you should not be living in that area. Live and enjoy life a little, go out to eat, go on vacation, buy things you enjoy, have a hobby ect ect.

[RPS13]

Originally Posted by TexasGSD

#43
Today, 03:55 PM
TexasGSD
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Join Date: Jul 2012
9 posts, read 677 times
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My retirement comes out before my take home pay, and I have a nice matching program. I did not mention car insurance but I am around $85.00 a month for car insurance.The $800-$1500 a month was the savings/ money to I can spend if I need to. Take into account for car insurance and gas lets takes another $150.00 off these cost which will put me at $650-$1350 worst case scenario. Mind you I am being very very conservative with these numbers as I do not actually spend that much.

Even your $650/mo "discretionary income" is pretty aggressive IMO. You're leaving out all sorts of costs, and I think it's pretty tough to continually eat healthy for <$8/day like you've budgeted, nevermind going out to eat. I'd say double that to get a more comfortable number that would handle the very seldom trips to a lower-end chain restaurant. So right there you're down to about $400, and still haven't budgeted for any entertainment or other activities.

IMO, you're getting to a point where if you didn't get a good bonus for a while, or even regular raises to keep up with inflation, then you're in for a rough time.

[testmo]

Originally Posted by TexasGSD

This is where escrows come into play so I am not expected to drop my insurance and taxes in all at one time but that comes out of my monthly mortgage which was calculated above.

you are still paying the same amount, and the escrow company has the ability to change the amount you owe. depending on your type of loan you may actually end up paying them money to manage your escrow. imo it is a safer bet you do your own savings and pay taxes and insurance on your own. but you have to manage money really well. at the end of the year you will still have paid those thousands of dollars for taxes and insurance - just by paying a balloon payment each month (that you dont have control of). but, im not saying everyone has the discipline to do that. we all know we as a people are not good at saving

[chris_ut]

Originally Posted by testmo

you are still paying the same amount, and the escrow company has the ability to change the amount you owe. depending on your type of loan you may actually end up paying them money to manage your escrow. imo it is a safer bet you do your own savings and pay taxes and insurance on your own. but you have to manage money really well. at the end of the year you will still have paid those thousands of dollars for taxes and insurance - just by paying a balloon payment each month (that you dont have control of). but, im not saying everyone has the discipline to do that. we all know we as a people are not good at saving

Usually the bank will require mandatory escrow unless you have a certain percentage of equity in the property (25% I know for some).

[houston-nomad]

Originally Posted by BDFP

This is a true statement. We also put down 20% and have a 15 year mortgage. Price paid is 2.6x, loan amount 2.1x and it is tight financially but we're hoping to have another income coming in within the year.

Either way, I'm really liking the fact that in 5 years we'll have some SERIOUS equity in our home! Our last house was a 30 year mortgage and it was like staring into a black hole.

I thought I was pretty savvy about stuff when I bought, but I didn't know this. We had a 30-year mortgage (ratio was about 2.5 x income). We just refinanced to a 20-year, now we're building much more equity. Get a 15 or 20 year mortgage if you can or else you're just paying interest for years.