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My point is that I don't WANT to spend 500K on a house. I don't even want to spend 300K on a house. That's insane. Am I alone in saying that? I guess I am. I don't intend to spend all of my savings on a house. If I were to buy one I consider suitable that's exactly what I would have to do.
The market seems to want to force homebuyers to push themselves to the edge just to buy a home. I don't want to have to worry if we have a job loss, or we end up having quadruplets or God forbid my husband gets cancer. Right now if we spent a big chunk of our savings on a house, that's exactly what we would be forced to do. Is it worth it? Not to me...
At any rate, the only thing I can get in my area for 300K is a townhouse or a condominium. A single-family home is MUCH more expensive. Frankly I can't afford it. If I had 300K to throw away, I might just do it, but it would be a pretty darn great townhouse for me to want to spend the next 10-30 years of my life living in it. What if I couldn't sell it?
Banks don't care, but I do. I'm sitting tight for now. Maybe in a few years housing prices will be what *Kinky* considers affordable. And as you say, we will definitely have more $$. Right now I look at what I pay on my mortgages in interest. It's SO much higher than I pay for the principal. Yes, I know that there is a tax deduction, but we have lots of deductions so I'm not overly impressed.
What DOES impress me is the fact that wow, even if I wanted to, I could NOT pay off the house. I make additional mortgage payments for “my” (really the bank’s) existing property even though financial planners recommend not paying down your mortgage, I believe I will feel great when I actually own the property.
For some reason paying so much interest rankles me. I'm not too excited to borrow a load of money again. The bank managers are already rich enough. I, on the other hand, am not. I hope that in a couple of years houses will be what *I* consider affordable. I am prepared to keep my savings and wait until then.
BTW, sorry for hijacking the thread just to rant. I'm glad to hear there are affordable SFH's in that area! Good luck to the couple planning to move.
Quote:
Originally Posted by myselfdotcom
Saving up is a definitely a must when come to buying a house regardless if you are buying a $100k home or $500k one.
You said you both making a total of $140k/year..after taxes and such you are looking at around $100k (30% bracket for sake of argument)
Rent = $20k
Utilities-Bills $5000
car payment = $10k
You will have about $65k left over before gas/food/spending/maybe insurance etc. You can easily put away $15k-$20k a year towards home down payment since you guys have no kid yet. Like everyone said before regardless how much you made...it's like a human nature that the more you make the more you spend on crap.
Also I did a quick search on Ziprealty of Bethesda/Getty/Rockville, I found 127 SFH for sale under $300k
Last edited by kinkytoes; 07-24-2008 at 06:03 PM..
My husband and I make about 140K per year together and we live in an APARTMENT and we have no kids. I don't know how people do it. I have two rental properties, but they pay for themselves. I can't even imagine buying a 500K house. . . On second thought, now that congress has passed that homeowner bailout package, maybe I will. . .
Right now we save $$$ and don't shop, have fun or go out nearly as much as I would like to. . . If we had a 500K house, that would be 5000 a month with taxes and insurance. That's crazy. Can anyone afford that on 130K? The most you can afford with that salary is a house under 300K.
A new house in a place we would like to live for several years costs WAY more than that. We personally can't afford it. I went house shopping with my responsible 295K budget, and I felt like crying at the end because there was nothing I wanted in that price range. I don't want a MC mansion, I just wanted a house with a nice sized yard that was within 30 minutes of work and not too old. . .
On the other hand, if you're renting, that salary probably will allow you to afford an apartment almost anywhere in MD, I would think. Buying a house is definitely another story.
For people living well with purchased houses in really nice areas, how did you do it? Did your parents help you financially? Are you managing to save money? Do you have a lot of credit card debt? Did you buy your property with an ARM? What am I doing wrong?
Well, you're doing something wrong. Conservatively, your home should not exceed 3xs your income...which means you and your husband should be able to purchase something for about $420,000. This IS conservative. You can go even lower, to $375,000.
But, if you own TWO rental properties, whether they pay for themselves or not, they affect your "cash flow." Why? In short, the banks will want to know that you can carry all three mortgages should your renters bail! This may be why you don't feel comfortable buying anything above $300,000. Makes sense.
So, what are you talking about??? You already own property, just not the one you live in. At $130K or $140K, a couple or single person is earning more than enough to buy a home (given they don't have a ton of debt)...you own two!
used to work at a bank; my father used to manage one; have a few family members in real estate and mortgage lending; my grandfather built his wealth in real estate; and...I have a firm grasp of economics.
bethesda is very expensive. 130k is good. you can manage, but you won't be able to spend like a king. maybe you can get a nice three bed room townhome,for about 1,800 a month? but you won't get a yard,or basement. but that is the lowest you can go. i would live in rockville if i was you. there is good schools,and it is MUCH more cheaper. people under estimate bethesda it is a very expensive place to live in
My friend I actually understand your point. I would much rather get a simple 1700-2000sq foot house and pay 250,000 for it instead of 400,000 plus. Heck I don't even want to pay in the 300K range. It does irritate me to no ends that 10-15 years ago the D.C. area wasn't so expensive. Of course D.C. has always been pricey, however the suburbs of Va and MD weren't as overpriced as they are today. I really hate the fact that my wife has to work in order to live they way we do now. But this is life in this area. No matter what financial advisors and accountants tell you, There is nothing like a peace of mind in knowing that your house is paid for. For people making 250,000+ to millionaires this makes sense, because they don't want to get hit hard by taxes. To your average american. I don't see how it benefit's me much. Sure the taxes credit is okay, but 2000 back in my pocket every month is much better than getting maybe 3000 back at the end of the year. Just my thought....
Of course like anything. If we don't like this fact, we can always pickup and move to an area with a lower cost of living. You might take a hit pay wise but if your making a 70k to 100K I'm pretty sure you will do well else where. Of course depending on your skill set. Kinkytoes I feel exactly where your coming from. That is why I wanted to reply to you. Sorry for hijacking the thread. We now return to the original message already in progress.
Quote:
Originally Posted by kinkytoes
We paid cash for our cars!
My point is that I don't WANT to spend 500K on a house. I don't even want to spend 300K on a house. That's insane. Am I alone in saying that? I guess I am. I don't intend to spend all of my savings on a house. If I were to buy one I consider suitable that's exactly what I would have to do.
The market seems to want to force homebuyers to push themselves to the edge just to buy a home. I don't want to have to worry if we have a job loss, or we end up having quadruplets or God forbid my husband gets cancer. Right now if we spent a big chunk of our savings on a house, that's exactly what we would be forced to do. Is it worth it? Not to me...
At any rate, the only thing I can get in my area for 300K is a townhouse or a condominium. A single-family home is MUCH more expensive. Frankly I can't afford it. If I had 300K to throw away, I might just do it, but it would be a pretty darn great townhouse for me to want to spend the next 10-30 years of my life living in it. What if I couldn't sell it?
Banks don't care, but I do. I'm sitting tight for now. Maybe in a few years housing prices will be what *Kinky* considers affordable. And as you say, we will definitely have more $$. Right now I look at what I pay on my mortgages in interest. It's SO much higher than I pay for the principal. Yes, I know that there is a tax deduction, but we have lots of deductions so I'm not overly impressed.
What DOES impress me is the fact that wow, even if I wanted to, I could NOT pay off the house. I make additional mortgage payments for “my” (really the bank’s) existing property even though financial planners recommend not paying down your mortgage, I believe I will feel great when I actually own the property.
For some reason paying so much interest rankles me. I'm not too excited to borrow a load of money again. The bank managers are already rich enough. I, on the other hand, am not. I hope that in a couple of years houses will be what *I* consider affordable. I am prepared to keep my savings and wait until then.
BTW, sorry for hijacking the thread just to rant. I'm glad to hear there are affordable SFH's in that area! Good luck to the couple planning to move.
Hello All! I received a job offer for $130k/year in the Bethesda area. Is this good enough to cope with the Cost of Living up there? We are a family of 4 (2 adults, 2 kids) and it might take a while for my wife to find work (although, if this is enough, I'd rather have her stay home and take care of the kids, so as to save on Day and after-school care and tutoring). I know just about everything is pretty much higher up there than where I live now (Arkansas). Will it be worth it? (right now, I'm making $72k) Thanks all!
Yes it will be worth it, and it's doable . Just depends on lifestyle. I know a lot of stay at home moms whose husbands make it that range, and are living decent. However in the Bethesda area, it may be a lil tight as housing is expensive.
Actually 130K in Bethesda is much less than 72K in Arkansas - having to support your wife and 2 kids just adds to that. I'm not saying that it's not manageable, but you would probably have to lower your living standards compared to what you and your family were used to in Arkansas.
The cheapest, smallest, single family home in Bethesda (near the metro station - 3 miles radius) is near 1 million dollars. A townhouse is around 700K and up plus HOA fees (usually 3-500/month), 2 bedroom condo around 550-700K plus condo fees (usually 4-700/month). Also, Montgomery County has the highest property taxes in the nation.
Depending on where your job is, and how long your commute will be, Rockville, Geithersburg, Silver Spring in Maryland, and Springfield, Fairfax, maybe some parts of Tysons Corner in Virginia, might be a better choice. Or just staying in Arkansas - less traffic, less aglomeration, more space, less expensive real estate, and less stressed people ...
Good Luck.
I believe (check needed) the highest property taxes in the country are in Manhattan, and some places in Long Island NY.
There is a big difference between Bethesda and Arkansas, with a plus for Bethesda- the kids especially will have better opportunities for everything. I will say our "friend" should move, the family will have a better future.
Please tell us more about HOW you live now. and what you'd WANT here -- and we can help more.
Picking up on what ep124 said....I don't know how far 74-thou goes in Arkansas, (also you haven't said where you live in Arkansas.)
For this discussion I'll presume Little Rock (biggest city there, most people, congestion (if there even IS such a thing in Arkansas. I'm kidding in part, of course)
I'm imagining that moving here would be a COMPLETE LIFESTYLE CHANGE for you.
CAN you get a house here now for under 300-thou? - SURE. WIll it be what you want size-wise, WHERE you want safety-wise? I doubt it.
How much land do you want. Lots here can be much smaller than you might expect.
Never having been to Arkansas -- I'll take a guess and say the lifestyles there are MUCH MORE laid back, not as frenetic.
The TRAFFIC ALONE here might drive you back to Arkansas.
Do you take vacations now? How many trips a year?
You have car Insurance. I'm willing to bet that alone will make you faint in terms of how much more it is here.
EVERYTHING will cost more here. Expect a lot more.
The advantages you can afford now for your kids -- AND you'd refer you wife not work -- will you be able to afford them here on 130-thou?
Depends on your mortgage (not the cost of the house, the FINANCED mortgage you're paying for every month.
PERSONALLY, for a family of four -- I don't think 130-thou goes that far -- if you have a 3-thou a month mortgage, two car insurance payments, and you want to max out the 401K and IRA, AND have spending money without watching every dime.
You might be better off with 74-thou in Arkansas. And I think you might. If you're making that kind of money in Ark. and already have a house and established life there. Staying put may make more sense than uprooting. Think QUALITY OF LIFE, not money
Did I just write on this only to realize this is an old thread?? Geez. I should look at post dates more. Oh well hope this helps SOMEONE out there.
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I hope that in a couple of years houses will be what *I* consider affordable. I am prepared to keep my savings and wait until then. 
