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Old 06-05-2015, 05:55 PM
 
4,624 posts, read 9,289,109 times
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Quote:
Originally Posted by OutdoorgirlUtah View Post
It blows my mind how people afford homes as were not exactly paupers.
They do not budget for savings, ensuring that they will be working for a looong time as they work to pay bills and not themselves. sadly there's lots of people that make $100k and pay well over $2000/ month.
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Old 06-05-2015, 06:00 PM
 
Location: Amongst the AZ Cactus
7,068 posts, read 6,481,447 times
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Quote:
Originally Posted by OutdoorgirlUtah View Post
It blows my mind how people afford homes as were not exactly paupers.
"Afford" via debt.

Welcome to the American way of life for many.....debt up to the eyeballs.
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Old 06-05-2015, 06:00 PM
 
Location: Scottsdale, AZ
2,154 posts, read 5,184,408 times
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There are several N. Phoenix neighborhoods that have homes in your price range and are in highly rated school districts.
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Old 06-05-2015, 06:03 PM
 
69 posts, read 77,284 times
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Can you help direct me to those areas AZJoeD?
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Old 06-05-2015, 11:10 PM
 
755 posts, read 676,683 times
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Quote:
Originally Posted by asufan View Post
I disagree, $100k is not much so after deducting $18,000 to eachs 401k, the take home is likely closer to $5,000/ mo. sure they could get qualified for more but doubtful they could AFFORD $400k. Always figure 2.5X annual income for a mortgage, maybe a BIT more with these low rates but not $400k
Why would you put that much in your 401, before you owned a home? Buying a good home in an appreciating neighborhood could out gross your 401k........you have to be smart, you just don't throw everything in the 401, especially if you are young. You have to save, but don't starve and suffer your whole life just to live at 65 years old.....it is called balance.

They also said they have two car payments. What are your interest rates? Again it might be better to pay those off first, before dumping all of your money into a 401k; that interest will trump your 401k if it is too high.

I guarantee you they bring home more than 5000 a month. The OP can answer that question right away. They should not be paying more than 25 percent total on their taxes, if so, they are doing things incorrectly.

And 100k is enough. If 100k is not enough to live well in Phoenix, let alone most of America, you deserve to be broke. Living in an area with a median household income of 100k is considered a well to do neighborhood.
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Old 06-06-2015, 08:23 AM
 
4,624 posts, read 9,289,109 times
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Quote:
Originally Posted by jmac1 View Post
Why would you put that much in your 401, before you owned a home? Buying a good home in an appreciating neighborhood could out gross your 401k........you have to be smart, you just don't throw everything in the 401, especially if you are young. You have to save, but don't starve and suffer your whole life just to live at 65 years old.....it is called balance.

They also said they have two car payments. What are your interest rates? Again it might be better to pay those off first, before dumping all of your money into a 401k; that interest will trump your 401k if it is too high.

I guarantee you they bring home more than 5000 a month. The OP can answer that question right away. They should not be paying more than 25 percent total on their taxes, if so, they are doing things incorrectly.

And 100k is enough. If 100k is not enough to live well in Phoenix, let alone most of America, you deserve to be broke. Living in an area with a median household income of 100k is considered a well to do neighborhood.
All I am saying is, there has to be SOME money budgeted for savings, so taking home $6,000/ month ($72,000 annually) is not realistic. Even if they just did 15% to 401k or some mix of that and taxable savings or education savings, that leaves $85k before taxes so assuming $60k take home from that is not too far off. I realize many do not pay themselves first though.
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Old 06-06-2015, 01:21 PM
 
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Quote:
Originally Posted by asufan View Post
All I am saying is, there has to be SOME money budgeted for savings, so taking home $6,000/ month ($72,000 annually) is not realistic. Even if they just did 15% to 401k or some mix of that and taxable savings or education savings, that leaves $85k before taxes so assuming $60k take home from that is not too far off. I realize many do not pay themselves first though.
Of course.

Either way, if people spend less on frivolous items, 100k should/could/would go a long way.

Man, what happened to the world? The median household income in the U.S. is around 50-54k and 100k is not enough for Phoenix

Damn shame...

If banks stopped lending money so easily (stopping people from buying things they cannot afford and falsely inflating prices....see 1920's), prices would drop to their true values. Cars, colleges, and homes are so overpriced; we live in a fantasy world because of the access to credit. I know the corporations would suffer, but the world is seeing the evolution of billionaires at a record pace, I think the real economy (middle class) would be better off.

Sorry to go OT
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Old 06-06-2015, 01:50 PM
 
4,624 posts, read 9,289,109 times
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Quote:
Originally Posted by jmac1 View Post
Of course.

Either way, if people spend less on frivolous items, 100k should/could/would go a long way.

Man, what happened to the world? The median household income in the U.S. is around 50-54k and 100k is not enough for Phoenix

Damn shame...

If banks stopped lending money so easily (stopping people from buying things they cannot afford and falsely inflating prices....see 1920's), prices would drop to their true values. Cars, colleges, and homes are so overpriced; we live in a fantasy world because of the access to credit. I know the corporations would suffer, but the world is seeing the evolution of billionaires at a record pace, I think the real economy (middle class) would be better off.

Sorry to go OT
The median household income in Phoenix may be in the $50k range, but the median house price is below $200k. Not saying $100k doesn't buy anything, but it doesn't (shouldn't) buy $400k.
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Old 06-06-2015, 02:32 PM
 
755 posts, read 676,683 times
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Quote:
Originally Posted by asufan View Post
The median household income in Phoenix may be in the $50k range, but the median house price is below $200k. Not saying $100k doesn't buy anything, but it doesn't (shouldn't) buy $400k.

  • Front-End RatiosLenders use what is called a front-end ratio, which is reflected as a percentage of your gross monthly income. The front-end ratio signifies the payment a buyer can reasonably afford, from a lender's point of view. You may prefer a lower payment.
    The front-end ratio for a FHA loan is 31%. For a conforming conventional loan, the front-end ratio is 33%. This means if your monthly gross income is $4,000, to qualify for the maximum FHA loan, your monthly principal, interest, taxes and insurance (PITI) payment can not exceed $1,240. For a conventional loan, it is $1,320.
  • Back-End RatiosThe back-end ratio reflects your new mortgage payment, plus all recurring debt. It, too, is computed on your gross monthly income. The back-end is higher than the front-end. For an FHA loan, the back-end ratio is 43%. For a conforming conventional loan, it is 45%.
    This means if your car payment is $300, and you pay $100 a month between two credit cards, your total monthly recurring debt is $400. On the FHA loan payment above of $1,240 PITI, plus $400 recurring debt, your total is $1,640. The back-end ratio number is $1,720 ($4,000 x 43% = $1,720). Your total debt is less than $1,720, so you qualify.
    For a conventional loan, $4,000 x 45% (back-end ratio), equals $1,800. The total debt of $400, plus your new mortgage payment of $1,320 for a conventional loan equals $1,720. Your total debt is less than $1,800, so you would qualify for a conventional loan.
http://homebuying.about.com/od/buyingahome



Financing 400k for 30 years @ 3.65 APR equals a monthly payment of 1829.00

Mortgage Calculator

4000 for property tax. 1200 for home ins. That is another 433 per month added to payment, which equals 2262 per month payment; and that is financing the entire 400k


At just over 100k (105k); 8750 is their monthly gross. 33% of 8750 is 28875.00 per month.


Like I said, it depends on their back end ratio. If they are not in debt, they could easily afford a 400k home

Bringing home 6600 a month after taxes, using the 33% rule, allows for a 2200.00 payment. Still leaving 4400 for other expenses and savings.

6600 is apprx 75% of 8750 dollars.

Now if that isn't enough for you to understand they can afford a 400k home, I can refer you to a site on how much a married couple should pay in federal and AZ state taxes which is 4.24%.
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Old 06-06-2015, 02:44 PM
 
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$100k for two people isn't very much. So they each make around $50k? I surely wouldn't buy a $400k+ house on that.
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