Job offer in SF....yes? no? hell no? (San Jose, San Francisco: 2015, appliances)

[NewbieHere]

Originally Posted by Chuck5000

Anyone can just ignore the financial advice here and confirm the opinions presented here elsewhere on the internet.

There are mortgage affordability calculators. There are financial advice forums, too. Bogleheads, Fatwallet, etc. Easy to cross check and get lots of opinions. There are nonprofit consumer organizations that provide advice, too.

When you look at what is considered good advice by consensus elsewhere on the internet, how much house a person can afford given a specific income, etc, how much people should save for retirement, etc - the "bears" on this forum are mostly correct.

Easy to go check.

I bought a house recently with around $200k income, yes it was more than a million, I put down 20%.
While I was referring to you, but I can tell you if I were in the Bay Area, I could buy a house with that income. I don't like complainers.

In fact, if you go on Redfin and put San Ramon, there are literally tons on houses under a $1 million. It may not be the house you want, but they are available.

[Majami]

Ultimately when it comes to paying off a mortgage, keep in mind, the higher income bracket you are, the more of that interest you can deduct from your taxes. Over certain incomes it can make sense to buy a home on mortgage than in cash so you don't immediately tie up all your assets and use them where you can get faster returns.

Also keep in mind most people who buy a home are also married and their partner has a income. In the Bay Area if both you make 130k, that's 260k, and you're looking at buying one of those typical homes on a 30 year mortgage.

The key here is to save and to be career driven, and to marry a smart woman (or man).

[Chuck5000]

Originally Posted by NewbieHere

I bought a house recently with around $200k income, yes it was more than a million, I put down 20%.
While I was referring to you, but I can tell you if I were in the Bay Area, I could buy a house with that income. I don't like complainers.

Interesting - good luck. That's a bigger spread than anyone I know. Personally, I don't have the expected inheritance that would allow me to save that little for retirement and pay that mortgage, and I do have that downpayment. Or maybe appreciation will continue indefinitely on the current path and your decision will pay off. To me, that's a huge risk, but that's your choice, of course.

Or you might be young and 200k is just the start for you. You've got no problem if that's the case.

I don't like people complaining about complainers. That's a complaint.

[NewbieHere]

Originally Posted by Chuck5000

Interesting - good luck. That's a bigger spread than anyone I know. Personally, I don't have the expected inheritance that would allow me to save that little for retirement and pay that mortgage, and I do have that downpayment. Or maybe appreciation will continue indefinitely on the current path and your decision will pay off. To me, that's a huge risk, but that's your choice, of course.

Or you might be young and 200k is just the start for you. You've got no problem if that's the case.

I don't like people complaining about complainers. That's a complaint.

My rent was the same as my mortgage. The difference is I have to pay property tax and insurance, plus HOA.
Yes the property has gone up 50%, I didn't know it would do that, I was definitely nervous because I'm retiring. But I'm glad I did.

[neutrino78x]

Yeah OP, 90k should be fine around here. That's close to the median income for the area. I think the median in SF is actually a little lower. If by chance you can't afford an apartment to yourself, you can always move in with roommates.

I don't think anyone is priced out of the market here, really. If you make the median income -- 100k for Silicon Valley, 78k in SF -- you can buy a condo, if you want. If you want the most expensive form of housing in the area -- a SFH in an excellent school district -- you would either make 200k (after taxes) by yourself or get together with someone else who makes 100k and combine incomes. If you cannot afford a SFH in an excellent district in the Bay Area, you're not priced out, you just have to get something smaller. That is to say, a condo. You can still live here. You just won't own the land underneath your house, and you probably won't own the whole building in which you live, just the part you bought. But if in 30 years you own it free and clear, that's living in the Bay Area, is it not?

The complainers forget about those of us who make far less than the median and still live here. We share housing. Take me for example. I just did my taxes. I have my W-2 here. It says I made (approximately) 16k. And I live here in Silicon Valley. So if you (referring to the complainers) made 160k, I don't know how you're "not making it" if I can do it on 1/10 what you make. Perhaps you bit off more than you can chew in terms of housing.

If you are paying more than 1/3 of your income after taxes on housing, then you need to downsize.

I share a one bedroom apartment with my dad; I had to move back when De Anza College didn't have the right courses in summer 2014 so I didn't have the GI Bill funding. I'd move back to downtown -- I can afford to do so -- but then I couldn't keep helping him with his rent; he pays 1300/month. So yeah I'm making it, I have 1500 in the bank. But I'm looking for a better job so I can afford my own room and still send him at least the same amount (if not more). He's only going to need more help from me as he gets older. That's the circle of life, they say.

I'm interested in either IT or the Merchant Marine, as far as better jobs.

[Fiona8484]

Originally Posted by neutrino78x

You're supposed to be able to buy 5x what your income is, so if your combined income is 100k, you can get a 500k dwelling, and if you have at least 200k combined after taxes you should be able to buy a 1M home. Not that you need one, I mean you could buy a condo inside of a building containing other condos. That's middle class in the Bay Area.



Yes, but in Austin, you still can't buy the most expensive form of housing using the median income. Logically, you would have to have the highest income to buy the most expensive housing.

All the CoL difference means is that middle class in Austin might be an actual SFH, as opposed to the Bay Area, where middle class is a condo inside of a building containing other condos.

Where are you getting this 5x figure? For years I always heard 3x your salary. I think savy buyers would stick to 3x, but I am fully aware of the Bay Area housing market situation and the insanity these days.

Plus, just because someone is approved for a big loan doesn't mean they will take it. Anyone with some common sense would understand that a high paying job might be there now, but it could easily be gone too or one could need to take a 10-20% pay cut to stay employed (at a new company after a lay off).

When talking about Austin, property taxes will be higher, but that should wash out the California income tax that someone making $200k is paying. Better than paying high CA income tax PLUS the CA property tax.

[neutrino78x]

Originally Posted by NYinCA2014

Where are you getting this 5x figure? For years I always heard 3x your salary. I think savy buyers would stick to 3x, but I am fully aware of the Bay Area housing market situation and the insanity these days.

Well, you're right, I misspoke. 3x not 5x. Mortgage payment should be 1/3 of your income after taxes. But you see my point. 200k should be enough to buy a house that is approximately 1 million. If it is significantly more, you need a higher income.

When talking about Austin, property taxes will be higher, but that should wash out the California income tax that someone making $200k is paying. Better than paying high CA income tax PLUS the CA property tax.

Yeah but then you have to live in Austin. Again, I'll take a condo in New York City, San Jose or San Francisco over a SFH in Austin ANY DAY OF THE WEEK.

There's a reason why those of us from The Great Cities refer to places like Texas as Flyover States.

[jade408]

Originally Posted by neutrino78x

Well, you're right, I misspoke. 3x not 5x. Mortgage payment should be 1/3 of your income after taxes. But you see my point. 200k should be enough to buy a house that is approximately 1 million. If it is significantly more, you need a higher income.

200kx3 = 600k. Not anywhere near "almost $1M."

[neutrino78x]

Well, 3-5. Five is considered a maximum in the best case scenario (zero other debt, etc.). But three is preferred.

Three Home Buying Rules For All To Follow | Financial Samurai

[neutrino78x]

Originally Posted by jade408

200kx3 = 600k. Not anywhere near "almost $1M."

You can borrow 1 million with 200k in income if you pay 20% as a down payment.

I started to write a detailed reply, but a simple answer to your question is more appropriate.

For $1 million price & 20% down, you need an income of ~$200K
For $1 million loan amount & 20% down (1.25 mil purchase price), income of ~$250K

https://www.quora.com/What-yearly-in...on-dollar-home

another source:

The ideal mortgage amount of $1 million is based on the premise that the ideal income for
maximum happiness is $200,000 per person.

The Ideal Mortgage Amount Is $1 Million Dollars (If You Can Afford It) | Financial Samurai