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I have been looking at homes on off basis. Based in NJ. So property taxes are high. The towns i am looking at in Central Jersey have property taxes around 22-24k for such a house. T
So taking a home prices of 999,999 USD, a high water mark property taxes of 24k. 2 young kids and a spouse. Have been saving for the last few years dilligently and can swing a downpayment of 500k, what would be an ideal take home income needed to run such a house? I have run some calculators on this but the results vary so much.
Another option is to start looking at other towns with somewhat longer commute. But save money in the longer run.
To add more context, outgrown our current place, and not a great school district. Another thought is to wait more, and save more money.
Appreciate your thoughts.
Asking how much income for a $1m home is kinda backwards. With a down payment of $500k, your loan amount will roughly be $500k. So plugging in those numbers to get your PITI, can you swing that monthly payment on your current income?
Even though you're casually looking, my recommendation is to speak with a lender who can look at your specific financial position and tell you how much of a home loan for which you qualify. Then you can decide what PITI payments you're comfortable paying.
They can also ballpark the closing costs you can expect to pay (which, depending on your circumstances, may reduce the funds available for your down payment).
Telephone quotes/generalities, not everyone can fit in any one box, but you would be amazed at how many do. If your debt (credit cards and car payments) doesn't exceed 5% of your Gross Monthly Income, I tell wanna be homeowners they need to take gross annual income and multiply by 3 to 3.5 times. (This is for those calls when the buyer wants to be prequalified without telling me their personal income and debt. Yes, these people do exist).
The 33% of GMI went out the window with automated underwriting. We regularly see files approved at house payment + debt (no front in ratio, just total debt) going up to 44% on conventional loan. That really scares me as a starting point, because conventional won't cross 45%. There's no room for increases beyond your control. How many times have we seen taxes or homeowner's insurance come in well above the numbers used? Or, ooops, the credit report showed the student loan at $0 per month, but the 1% figure is now $600!
For the OP, assuming debt is in line (and not in Hawaii), your income needs to be 125K to 140K, depending on many other factors. But you may not like that payment. You need to determine how much you feel comfortable paying and find out what that loan amount is for your location in NJ. There are two completely different answers to the questions you are asking. Talk to a loan officer. And if you aren't getting answers to your questions, find another, and another.
I have been looking at homes on off basis. Based in NJ. So property taxes are high. The towns i am looking at in Central Jersey have property taxes around 22-24k for such a house. T
So taking a home prices of 999,999 USD, a high water mark property taxes of 24k. 2 young kids and a spouse. Have been saving for the last few years dilligently and can swing a downpayment of 500k, what would be an ideal take home income needed to run such a house? I have run some calculators on this but the results vary so much.
Another option is to start looking at other towns with somewhat longer commute. But save money in the longer run.
To add more context, outgrown our current place, and not a great school district. Another thought is to wait more, and save more money.
Appreciate your thoughts.
So my last NY house monthly mortgage payment was $3,500 for a 15 year mortgage including about $15,000 a year in property taxes and additional county taxes. I had a 4% interest rate on a $400,000 mortgage. My priorities were to saved for retirement and to saved $400,000+ for undergrad for two kids Our family income was in the mid-$300,000.
I never felt rich!
I used a mortgage calculator for a million dollar house with a $500,000 mortgage at 7.75% and the result was $2,800 per month. You'll need to add $2,000 for taxes with wiggle room for increases. So figure $5,000 per month as a minimum. Your after tax monthly income would need to be north of $12,000 or about $350,000 (without taking into account tax deductions from IRA/401K or other federal tax write offs).
My old lady two cents. Kids grow up fast! With a long commute, it will be harder for you to attend school plays, concerts and all those activities that are so important to kids. Kids never suffered from a small house. Kids suffer when they see their parents stressed over money.
While my kids were young, we had a modest 1,800 square foot cape cod style house in MA. When I moved to NY when they were teenagers, we traded up to a larger house. In a blink of an eye, they were off to college and my husband and I were alone in a four bedroom, three bathroom house.
There are lots of perfectly acceptable $600,000 homes in NJ! There is Basking Ridge, Bridgewater, Somerset, Paramus, Fair Lawn, Dumont. Try Nutley NJ - great commute and cute town! It may not be the perfect home, it just has to be a good enough! Some place where you can enjoy your family and live a less stressful life.
Cedar Grove is by Montclair. Montclair has extraordinarily good train service. It also has reasonably priced homes too.
Over a decade in a reasonably priced home, a person can build up quite a bit of equality. Then a person can always trade up to a more expensive house! Or, not - perhaps, buy a weekend house or blow the money in Europe! Options are a wonderful thing to have!
So my last NY house monthly mortgage payment was $3,500 for a 15 year mortgage including about $15,000 a year in property taxes and additional county taxes. I had a 4% interest rate on a $400,000 mortgage. My priorities were to saved for retirement and to saved $400,000+ for undergrad for two kids Our family income was in the mid-$300,000.
I never felt rich!
I used a mortgage calculator for a million dollar house with a $500,000 mortgage at 7.75% and the result was $2,800 per month. You'll need to add $2,000 for taxes with wiggle room for increases. So figure $5,000 per month as a minimum. Your after tax monthly income would need to be north of $12,000 or about $350,000 (without taking into account tax deductions from IRA/401K or other federal tax write offs).
My old lady two cents. Kids grow up fast! With a long commute, it will be harder for you to attend school plays, concerts and all those activities that are so important to kids. Kids never suffered from a small house. Kids suffer when they see their parents stressed over money.
While my kids were young, we had a modest 1,800 square foot cape cod style house in MA. When I moved to NY when they were teenagers, we traded up to a larger house. In a blink of an eye, they were off to college and my husband and I were alone in a four bedroom, three bathroom house.
There are lots of perfectly acceptable $600,000 homes in NJ! There is Basking Ridge, Bridgewater, Somerset, Paramus, Fair Lawn, Dumont. Try Nutley NJ - great commute and cute town! It may not be the perfect home, it just has to be a good enough! Some place where you can enjoy your family and live a less stressful life.
Cedar Grove is by Montclair. Montclair has extraordinarily good train service. It also has reasonably priced homes too.
Over a decade in a reasonably priced home, a person can build up quite a bit of equality. Then a person can always trade up to a more expensive house! Or, not - perhaps, buy a weekend house or blow the money in Europe! Options are a wonderful thing to have!
our son is there just 10 ten years now ..they paid 545k now 800-825
Cedar Grove is by Montclair. Montclair has extraordinarily good train service. It also has reasonably priced homes too.
Over a decade in a reasonably priced home, a person can build up quite a bit of equality. Then a person can always trade up to a more expensive house! Or, not - perhaps, buy a weekend house or blow the money in Europe! Options are a wonderful thing to have!
I’ve never seen anyone call Montclair real estate “reasonably priced”.
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