First time home buyer needs advice bay area (Concord, Livermore: real estate, renting)

[EDRN911]

Hey everyone! Have browsed this forum for quite some time and am now in need of some advice.
My wife and I are in the market as first time home buyers. I currently make approx 130k/yr in a very secure job market, and my wife has her own business that is slightly erratic in terms of income. We currently have two young children and have approx $200/month in monthly debt. We have been looking at homes in the east bay area for around 425-475k. We have approx 10% down payment established. We just wonder if these are realistic ratios for buying a house. My income should increase by approx 40k in the next 5 yrs and we hope my wife's business is able to become successful. I just worry that at my current income we may struggle financially. We are pretty simple ppl, mostly exercise outdoors and eat at home. Our idea vacations are road trips down to Baja mexico if that gives any insight of our lifestyle. Online calculators seen to have too much variability and I worry that lenders place their interest in completing a deal over mine. My father (a tax attorney) seems to think that changing my deductions will allow this to be an easily affordable ratio. I guess I'm just hoping to hear from some ppl who have dove in the real estate pool, as I'm getting cold feet regarding making ends meet. Thanks in advance for your advice/wisdom.

[NewbiePoster]

Looking for something under 500k in the East Bay? There will be limited options at that price in the "inner East Bay", so the search will be very competitive. Concord, which is a little farther out, but still on a BART line for commuting, has more homes in your price range. 20% downpayment would work better. Also consider condos, to broaden your options for location. The stronger your position, the more competitive you'll be.

[California Vagabond]

I'll second the recommendation to look at Concord. I just logged onto Redfin, and see quite a few SFRs there for under 475K.

You might also look at homes in Pittsburg south of Leland Road, and maybe west of Bailey. It's been awhile since my last trip out there, but I thought the neighborhood looked appealing-enough, and homes out that-a-ways are within walking distance of Pittsburg BART.

[EDRN911]

Thank you for your responses. We are currently looking at the Livermore area, pretty hopeful we can find a place there. My question was more related to the affordability of the house. Is a 450k house too far of a stretch for 130k annual salary? PITI comes out to about 2750/mo. Comparable homes are renting for 2100-2500/mo. I'm hoping there is someone who has had similar income/debt that is able to share their experience and advice with me. Thanks!

[LoriBee62]

If you do a search on debt-to-income ratios, or front and back ratios, you will find lots of information and tools to help you calculate how much a mortgage company will decide you can afford. To me, a $450K mortgage on a $130K salary seems doable. It depends on other things like car payments, other bills, and how much disposable income you want to have.