Mortgage/Income

[jxu66]

I recommend to be very conservative. There are other costs besides just mortgage (like home insurance, property tax, monthly repair). If your house belongs to home association, there is home association fee. In Georgia, there is terminate bond one must buy every year. Also, there is monthly trash fee one must paid. All those costs can add 30% to 40% on the top of mortgage.

I don't know other areas. In Atlanta area and my previous stay Dallas, many people overbought houses. Since Atlanta and Dallas properties do not appreciate as much as other states, there is a huge foreclosure problem. When I was looking at one of those foreclosure web site one day, I was shocking to see many nice areas that have many foreclosures.

[yellowsnow]

I wonder if you have your 6 month emergency fund set up? Can you live for 6 months and pay this mortgage if you are laid off?

[southernlady5464]

Well, we did! Then hubby spent 5 months "in between opportunities" after we took the buyout last fall. That put a real dent in that...now to build it back up. Liz

[yellowsnow]

Originally Posted by southernlady5464

Well, we did! Then hubby spent 5 months "in between opportunities" after we took the buyout last fall. That put a real dent in that...now to build it back up. Liz

How much heartbreak did it save you to know that money was in the bank? Good for you!

[TimtheGuy]

Originally Posted by Dee2e

Using standards, with your income, you'd qualify for a $1213 mortgage.

Anything out of the standards, causes the interest rate to be higher. With no other debt, you might not have difficulty with the mortgage BUT you have to look at the entire picture, not just income.

I think Dee is using a "housing" debt ratio of 28% which has been considered a "safe" historical standard. However, it is not true that you will pay higher rates if your "housing" ratio exceeds this.

It sounds like you are probably an A borrower looking for a fixed rate. Your rate will be the same whether your "housing ratio" is 20% or 35%. Your rate will also be the same whether your credit score is 680 or 780 on a regular conventional fixed rate mortgage.

It also sounds like you are on the conservative side. With that in mind I would not go over the $1,300/mo. PITI payment that you mention. This would have you right at the 30% housing ratio

[vpcats]

Where is this house?

When I bought the house I'm in now, the bank approved me for close to $350K. I have a 5.625 fixed 30 yr loan and put 20% down. I make a lot more than the OP - by myself. I bought a house for $190K.

I'm in Florida and it's a good thing I didn't max out what the bank was willing to give me. I wanted to have plenty of head room and it worked. My homeowner's insurance and my taxes are MORE than my principal and interest.

I have about a month's worth of emergency funds but I also have other things I could tap into if push came to shove.

I would not go as high as you technically could because you never know what's around the bend.

[Crew Chief]

Food for thought: Whatever you think you need to set aside for maintenance and reapair; DOUBLE it. We bought a well-maintained and cared-for house four years ago. Since moving in, we've:

- painted the exterior; $1800
- replaced the heat pump: $8,000
- blown another 6" of insulation to the roof: $1200
- plumbing repairs: $600
- garage door opener: $450

We're also looking at new carpeting throughout, replacing the paver patio and remodeling the kitchen in the near future.

There's a lot to the upkeep of a home; especially if you want to maintain neighborhood standards and resale value. Or just for your own enjoyment. I've read estimates that say you should plan on spending about 5% of your home's value every year on maintenance and repairs. We'd rather farm jobs out than do them ourselves; to us, time is money. But we definitely found out that it takes a LOT to keep your home up...