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If you can't carry $3500 PITI on $7500 take home pay (after a 15% contribution to 401Ks), something is seriously wrong with you. That leaves $4000 a month left over for utilities, car insurance, food, clothing, additional savings, etc. Even a $400/mo car payment for a new car would be quite manageable.
I guess, even though theres a lot you left out, but why push the limit or even close to it? I like to keep my PITI at 20% or less (more like 10% if possible) of my gross pay. A bigger, pricier home just means more cleaning and taxes anyways. Of course it's different if your work is in an area where you really can't FIND a home (or even a condo or a rental) for under 400k or whatever your budget safely allows.
Me neither, or maybe if I had a enough of a downpayment to bring the loan well under $300k.
Even with the ups and downs of the real estate market over the last ten years, a lot of people are still more up than down and consequently sitting on a lot of equity. We've got a home that has nicely appreciated since purchase and not much mortgage left on a 15 year note, and selling that would give us enough of a down payment to get a $400K house on far less than $150K in household income. But we still like the house and neighborhood, and will like it even more shortly when we don't have a primary mortgage payment.
Even with the ups and downs of the real estate market over the last ten years, a lot of people are still more up than down and consequently sitting on a lot of equity. We've got a home that has nicely appreciated since purchase and not much mortgage left on a 15 year note, and selling that would give us enough of a down payment to get a $400K house on far less than $150K in household income. But we still like the house and neighborhood, and will like it even more shortly when we don't have a primary mortgage payment.
That's obviosuly a different situation that what Christine and I were talking about, and a totally sound way to upgrade if that's what you want to do.
The secret is having a large disposable income. Otherwise it's scrimping and saving or going into a lot of debt funding a trip you couldn't afford in the first place. The students I knew in college who studied abroad came from wealthy families. Working stiffs' kids didn't go abroad nor did those who put themselves through college.
Also you can't always trade. I knew an idiot who bought a time share in the Poconos with an April week. Useless trying to trade to anyplace anyone actually wants to go. When she bought she was promised Hawaii and all sorts of other places, so far she hasn't been successful with a single trade, and it's been 10 years. So now she's stuck with a property she can't sell and doesn't want to use, and is thinking about just giving it away to be able to not have to pay the maintenance any longer.
Giving it away is probably the best bet. But that doesn't mean that there aren't timeshares out there which work as advertised. I'm quite happy with ours, and we've traveled around the world using it. (I'm up to 61 countries.) We go to two or three new countries each year, and at least one of them is done via timesharing.
Giving it away is probably the best bet. But that doesn't mean that there aren't timeshares out there which work as advertised. I'm quite happy with ours, and we've traveled around the world using it. (I'm up to 61 countries.) We go to two or three new countries each year, and at least one of them is done via timesharing.
Another thing that isn't good about them is that they are seldom in the part of the country one wants to be in. No timeshares in London--a 30-60 minute train ride outside of town--which gets very expensive--as an example.
Another thing that isn't good about them is that they are seldom in the part of the country one wants to be in. No timeshares in London--a 30-60 minute train ride outside of town--which gets very expensive--as an example.
You can't expect timeshare to take care of all travel plans. That isn't realistic. But for the places where they DO work, they work very well. I much prefer a condo with a kitchen to a hotel room.
And, incidentally, there ARE a few timeshares in London. They're just nearly impossible to trade into. For the England example, we'll spend a few nights in London (if at all, we've seen just about all of London), and then we'll take a train to someplace out in the country and stay in a timeshare.
I look at timeshare like a fun toy -- certainly not an investment.
I've seen a few ads for 'fractional ownership' in central London developments, but you're talking £150K for your five weeks a year.
Fractional ownership and timeshares are legally two different things. Fractional ownership means that you and your fellow owners all have your name on the deed for the entire building, not just a deeded week. It would be like buying a vacation home with 10 friends and all sharing the costs of the home equally, as opposed to paying a pro-rata amount towards the cost based on your individual usage/week.
You can't expect timeshare to take care of all travel plans. That isn't realistic. But for the places where they DO work, they work very well. I much prefer a condo with a kitchen to a hotel room.
And, incidentally, there ARE a few timeshares in London. They're just nearly impossible to trade into. For the England example, we'll spend a few nights in London (if at all, we've seen just about all of London), and then we'll take a train to someplace out in the country and stay in a timeshare.
I look at timeshare like a fun toy -- certainly not an investment.
For what you pay in annual dues for that timeshare you could rent a flat of the same size and quality in the heart of London for a week. Who wants to go to London for a day and then look at sheep for the rest of the week? If an area is impossible to trade into, then it's certainly not a selling point for buying a condo. Timeshares tie you down and restrict you to specific places.
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So now she's stuck with a property she can't sell and doesn't want to use, and is thinking about just giving it away to be able to not have to pay the maintenance any longer.
