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Old 08-23-2007, 10:14 AM
 
285 posts, read 1,039,837 times
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In our case, we only earn about 100K, but we can afford a home that is 350K tops because we have about 120K as equity. Our first home was in a district that was made historic, and we gained some great equity in only a few years. The home in which we now live we've made several big improvements and have done so cheaply, as my husband was a carpenter before he became a teacher. So, by the time we sell our home next year, we estimate that we will have no less than 100K in total equity and probably more like 120K. Thus, our mortgage will only be about 230-250K, and that fits just fine into the traditional 2.5 times our salary equation.

Most first time home buyers I know around here started under 200K or in the low 200's and move upward from there.
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Old 08-23-2007, 10:21 AM
 
Location: SW Durham, NC (27713)
1,040 posts, read 3,602,073 times
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So we are talking how much you finance, right?

If we bought a 350K home, but put 20% down, we are only really financing 280K which is closer in line with the 2.5 x salary estimate...

Example:
110K * 2.5 = 275K

That makes me feel alittle better
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Old 08-23-2007, 10:27 AM
 
133 posts, read 750,558 times
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Quote:
Originally Posted by alice_61 View Post
a fondness for peanut butter
LOL! And ramon noodles...
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Old 08-23-2007, 10:29 AM
 
133 posts, read 750,558 times
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Quote:
Originally Posted by Dire Wolf View Post
At a lot of the RTP companies, you have quite a lot of folks making 6 figures on just one income.
What is RTP?
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Old 08-23-2007, 10:31 AM
 
Location: SW Durham, NC (27713)
1,040 posts, read 3,602,073 times
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RTP = Research Triangle Park

Research Triangle Park - Wikipedia, the free encyclopedia
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Old 08-23-2007, 10:31 AM
 
1,790 posts, read 6,516,616 times
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Research Triangle Park
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Old 08-23-2007, 10:37 AM
 
54 posts, read 256,377 times
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According to bankrate "How much house you can afford" website
How much house can you afford? Mortgage calculator from Bankrate.com
You only need to make $6500/month ($78k/year) to afford a $350k house.
This is based on the following data

Salary: $6500/month
Mortgage: 6.75% 30 years fixed, $70000 down (20%)
Home insurance: $3000/year
Tax: $3000/year
No other debt.

Then the result is:
=================================
Available Mortgage Limits:
Affordable mortgage payment ($): 1820
Affordable home amount ($): 350605.2
=================================
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Old 08-23-2007, 10:53 AM
 
9,680 posts, read 27,160,949 times
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You need to list your expenses and add in the payment you'd get.

If this straps you leaving no money for contingencies like home/car repairs, medical bills, etc, either the home is too expensive or you need to cut other expenses.

Don't put yourself in a bind counting on pay increases that may not come.

Live beneath your means and sleep better.

Just a 62 year old Bubba's musings from experience.
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Old 08-23-2007, 10:55 AM
 
133 posts, read 750,558 times
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Quote:
Originally Posted by fester600 View Post
Quote:
Originally Posted by citydweller View Post
Simultaneous posting..... nice.

Thanks.
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Old 08-23-2007, 11:13 AM
 
709 posts, read 934,852 times
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A tax rate down here of 1.20 is average now in towns like cary, Raleigh , Apex Fuquay etc. That means you are closer to 4K in taxes on a 350K home down here. Interest rates are now up near 6.6% 30 year fixed, then there is the electric bill two zone ac gas bills for heat water sewer trash Cable TV DSL Phones GASOLINE car insurance homeowners insurance Life insurance. IF your cars are paid for that will help, however many have leases and loans. These are all fixed costs. Then there is medical insurance, copays and stuff. All before Food, vacations, haircuts, nail salons, clothes, lawn care GOT KIDS? Boy ya need a bunch of money to live.

Lets look at the numbers... 270 mortgage at 6.5% is 1600 P&I
Tax Real estate 1.20 per 100 value 370
Utilities Electric/ Nat Gas say august 250
Water sewer trash 100
DSL/ TWCable/ Wireless phones/landline 225
Gasoline 2 cars two jobs 200
Insurance homeowners and autos 200

Well we are close to 3000 per month already crazy huh when you look at the numbers. Then say add in car payments of say 400 a month food 700 a month entertainment savings yes you need to make some dollars.
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