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Old 10-17-2007, 02:09 PM
 
49 posts, read 150,038 times
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our annual income is 110K.
No car payment and No debt at all. have a good credit history
savings is 15K( right now)
only one kid going to public school( may have one more in the future)
what is the best range of buying a house and put a money for downpayment( looking house in RTP area)
I would appeciate a best advice from anyone
Thanks
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Old 10-17-2007, 02:24 PM
 
1,027 posts, read 3,636,034 times
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Nobody can answer this question for you. You really need to make a budget and decide how much you want to spend on a mortgage. Are you willing to cut back in other areas in order to live in a luxury house? Do you have ample retirement savings? Do you like to take nice vacations? Is your income rising rapidly? Do you anticipate buying a new car soon? etc etc.
Some people give a guideline of 2.5x or 3x your income. But everyone has different priorities in life, and you really need to figure out yours before you decide on a price range.
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Old 10-17-2007, 03:44 PM
 
3,842 posts, read 9,646,432 times
Reputation: 3194
Quote:
Originally Posted by snowsun View Post
our annual income is 110K.
No car payment and No debt at all. have a good credit history
savings is 15K( right now)
only one kid going to public school( may have one more in the future)
what is the best range of buying a house and put a money for downpayment( looking house in RTP area)
I would appeciate a best advice from anyone
Thanks
Like said above...it is based on YOUR personal budget. This is not anyone eles's money but your own. Once you start asking others how to spend it, you start to maybe believe what they say & thus all of a sudden lose control of your budget. The realtor & the lender will not be paying your mortgage or bills. Only you. So, you need to go in with full confidence & knowledge of how you spend every penny & where the money for downpayments, closing costs, & other incendentials when buying a home will come from.

I know you are asking for advice, but at the same time, you should be more than aware what you can afford in that area.

First, do a budget based on how you live today. How you spend EVERYTHING.

Then, start to think of what you NEED in a home & where these needs will be best meet. Do you need granite & stainless steel & a 3000sq ft home? Do you have the money to do fixups & upgrades for a home that will require a lot of work? What about school districts? Are you willing to pay more to live in a specific school district?

Figure out your price point based on your budget & start looking around. Go a little below your price point b/c you never know what you may find. Don't suggest going above your price point...if you can't afford it now, who says you can afford it later?

Good luck.
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Old 10-17-2007, 06:03 PM
 
49 posts, read 150,038 times
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Thanks to both of you. I am the first time home buyer. I really nead to work on budget .
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Old 10-17-2007, 06:15 PM
 
3,842 posts, read 9,646,432 times
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Quote:
Originally Posted by snowsun View Post
Thanks to both of you. I am the first time home buyer. I really nead to work on budget .
And the more you do this & the more you control over your finances when you do start talking to realtor & lender, the better off you will be.

This is why so many people are in the jam they are now w/ ARMs & other "creative" financing programs. They went in without the knowledge & came out with a new home & a nasty mortgage. People sometimes want to hear what they want to hear & people were told they could afford something that in reality they could not. Realtors & lenders are not going to do your personal budget for you. They just know what you tell them & work off that. You tell them you want a home, they'll get a home for you. It's not unlike buying a car.

This stuff takes TIME. Give yourself time. Call around. Do as much as you can with learning about mortgages, interest rates, closing costs, points, etc. Take time to research the markets you are interested in by looking up historical selling/buying trends, etc. Have a budget based on a few different scenarios: what if you lose income? lose a job? unexpected expense? Will you have the money to pay your mortgage? Don't think just b/c you can afford b/w $200 & $250 that you can, in reality, really afford $250 unless you have a good rainy day account that you are willing to dive into should an emergency come up.
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Old 10-17-2007, 10:46 PM
 
Location: California
3,432 posts, read 2,416,282 times
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With a $110,000 income yearly, at the max. You can spend about $33,000/yr on mortgage. If it goes over that you can't afford it. Thats about $2750/m to mortgage. Basically don't spend over 30% of what you make on mortgage. Hell, I don't even own a house. I'm 17, LMAO!
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Old 10-18-2007, 06:10 AM
 
Location: DC Area, for now
3,517 posts, read 12,314,941 times
Reputation: 2148
The rule of thumb used to be don't spend more than 25% of your income on housing. High housing costs have upped that rule of thumb to 30% now, but look at all the people who have trouble now days.
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Old 10-19-2007, 06:46 AM
 
Location: Where the sun likes to shine!!
20,546 posts, read 27,270,134 times
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With that kind of income I would save and live frugally for 3-5 years and pay cash for a house. Home prices are not at the bottom yet in a lot of areas. Why get a mortgage and pay 3 times the house value over the term of the loan.

Stay debt free-it is the best way to live. Save now and then get what you want stress free.

Lisa
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Old 10-19-2007, 08:48 AM
 
Location: NJ/NY
10,632 posts, read 17,108,433 times
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Quote:
Originally Posted by ProLogic View Post
With a $110,000 income yearly, at the max. You can spend about $33,000/yr on mortgage. If it goes over that you can't afford it. Thats about $2750/m to mortgage. Basically don't spend over 30% of what you make on mortgage. Hell, I don't even own a house. I'm 17, LMAO!
No offense, but at 17, especially not owning a home, I wouldn't be giving advice to others about mortgages. Good luck buying ANYTHING in the Bay Area at 30% of your income, unless you are making some serious $$$. On paper, 30% looks perfect, but it is not always doable these days, especially if you live near a metro area. We were pretty much paying 50% of income towards housing when we first bought our house (Metro NYC area).

Also - best advice is to get a FIXED RATE LOAN! If you can't afford the fixed rate payment, you can't afford the loan!
Quote:
Originally Posted by younglisa7 View Post
With that kind of income I would save and live frugally for 3-5 years and pay cash for a house. Home prices are not at the bottom yet in a lot of areas. Why get a mortgage and pay 3 times the house value over the term of the loan.

Stay debt free-it is the best way to live. Save now and then get what you want stress free.

Lisa
How is someone making $110k supposed to save frugally and pay cash for a house? Lets say a house is $350k. After taxes on $110k, you're taking home around $73k (you don't have the interest write off from the house to lower your taxable income). So you've got around $6k/month to play around with. If you're renting for, say $1500/mo, lower that to $4500/mo. Say bills are at LEAST $1k/month.

Even with those conservative estimates, you'd have $3500 a month to save for a house. So you'd have to save for 100 months (8-9 years) to buy a $350,000 house. By the time you wait out those 8 or 9 years, the house most likely is not going to be $350k anymore.

If you can save that aggressively, get a mortgage and pay down the principal with your extra money. You'll at least still get the interest deduction tax write off.

Last edited by newtoli; 10-19-2007 at 09:02 AM..
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Old 10-19-2007, 11:19 AM
 
49 posts, read 150,038 times
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Thank you all of your advice. Actually I am from NorthCarolina, still the house rent is very cheaper. ( right now I pay $650/ 2 bed room house). 2500sf house is around 310k or less than that.( I am not looking luxuary house). and leading simple life. I could wait 6 more months and save atleast 10%-15% for downpayment. started the research!!!!!! on the houses.
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