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How do points come into play and does it have anything to do with PMI? If I ahve the 20% to put down how much do I need to have in savings after that as to live with a cushion? For instance a 330k home I need 66k to put down and how much should I have in reserve after that????
Here is my take. My wife and I just bought a home. We make more money than you both do even with your overtime considered. We purchased in the low to mid 300s. I was qualified for up to a 550k mortgage. Our credit was immaculate. Don't be a fool just because you qualify for something doesn't mean you can afford it. You are rightonin your assessment. 300-375 is where you should be. If your hubby has issue have him dm. Me so I can talk some sense into him.
Here is my take. My wife and I just bought a home. We make more money than you both do even with your overtime considered. We purchased in the low to mid 300s. I was qualified for up to a 550k mortgage. Our credit was immaculate. Don't be a fool just because you qualify for something doesn't mean you can afford it. You are rightonin your assessment. 300-375 is where you should be. If your hubby has issue have him dm. Me so I can talk some sense into him.
I have to agree.
My rule of thumb is to take on no more of a mortgage than you can squeak by on with one income. That way you have a sense of security, can take life's little bumps, put more away for a rainy day while still having some disposable income. Don't forget to keep some money to the side for upkeep and wear and tear of the property too.
If this recession has taught us anything, it should have be never to take our incomes for granted.
Thanks for the advice, we are planning on speaking with a broker and taking everything they say very seriously, I have done some checking on the utilities in the area we are looking at and adding fuel expense, car insurance and maintaining as well as food into considration as well, I know we can easily pay 4k a month with mortgage included.
I have 14 years to go before I retire and he has 20.. is age a consideration as well to receiving loans?
No offense, but I am going to be brutally honest here. You have a husband who makes $90,000 plus a lot of overtime. You make 40-50k a year and have declared bankruptcy recently.
I would let your husband make this decision with minimal input from you. Generally, I would lean towards less depending on how long it is going to be before kids (if any) move out of the house.
Property tax in NJ is no joke, its a big factor. Do 2% on home value as your tax for rule of thumb. Obviously when you see an actual place you can find out how much the tax is but rule of thumb can't hurt. Just so you can be prepared.
For example, 350k place in Edgewater, NJ will run you about 500-600 bucks a month on property tax (6-7k/yr). This doesn't mean every unit around that range pays that much so you shouldn't expect it since older condos are obviously lower and units that have re-assessed tax and maybe came out lower. But this will give you an idea of what kind of range you are looking at.
As crazy as it is, if I put down 100k and get mortgage of 250k@ 4.5% for 30yr. No PMI...I'm looking at around 1100/monthly mortgage + 500-600/mo tax. That's right about 45% of my mortgage will equal how much taxes I gotta pay.
I really hope you do consider the fact that if one of you loose your jobs. Or if OT stops coming through... You can kiss your 400k home goodbye and you'll be facing some very tough decisions very quickly.
Lastly, I don't know how you guys are financially planning but based on estimates you gave. Sounds like you guys are not putting money into 401k or IRAs. Something to think about if you guys are not doing that. You can borrow money to buy a house and just about everything. But when time comes for retirement, no one will lend you money so you can retire unless you have very large collateral of some sort...
Property tax in NJ is no joke, its a big factor. Do 2% on home value as your tax for rule of thumb. Obviously when you see an actual place you can find out how much the tax is but rule of thumb can't hurt. Just so you can be prepared.
For example, 350k place in Edgewater, NJ will run you about 500-600 bucks a month on property tax (6-7k/yr). This doesn't mean every unit around that range pays that much so you shouldn't expect it since older condos are obviously lower and units that have re-assessed tax and maybe came out lower. But this will give you an idea of what kind of range you are looking at.
As crazy as it is, if I put down 100k and get mortgage of 250k@ 4.5% for 30yr. No PMI...I'm looking at around 1100/monthly mortgage + 500-600/mo tax. That's right about 45% of my mortgage will equal how much taxes I gotta pay.
I really hope you do consider the fact that if one of you loose your jobs. Or if OT stops coming through... You can kiss your 400k home goodbye and you'll be facing some very tough decisions very quickly.
Lastly, I don't know how you guys are financially planning but based on estimates you gave. Sounds like you guys are not putting money into 401k or IRAs. Something to think about if you guys are not doing that. You can borrow money to buy a house and just about everything. But when time comes for retirement, no one will lend you money so you can retire unless you have very large collateral of some sort...
I agree with most of what you said but a house can serve as an annuity of sorts. By the time you retire you should have almost paid off your mortgage so essentially that does become a form of savings account. While I don't recommend a reverse annuity mortgage, it is an option for those who choose to make their house a primary vehicle for saving for retirement. Of course it's unlikely that $500,000+ standard appreciation of 2% annually will be enough for 2 people to retire on but it is close to $900,000.
as any investment advisor will tell you you need a good balance, a house is a good start but not at the complete elimination of other vehicles.
It's a great time for a first-time homebuyer...buy low, sell high eventually. Therefore, I'd buy a "medium" house...affordable but not a starter home you'd want to be out of in 7yrs (the 7-itch). That is because the market may take longer than that to recover.
I agree with buying what you can comfortably afford on ONE income. So you have a cushion with the other income; and retirement savings.
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