My mortgage - FML | TigerDroppings.com

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YogaPants
LSU Fan
Baton Rouge
Member since Aug 2008
1549 posts

My mortgage - FML


Let me have it guys. Im a single guy, very stable employment, no wife/kids.. this is a brand new 3bd 2 bath home in a nice neighborhood.

My question is: what would you say my net monthly income (minus 401k and investments) should be to be living like this?

Mortgage is $1280 a month

10/04/12 MTG INS PMT $192.28 $187,969.71
10/01/12 PAYMENT ( Details) $1,280.76 $187,969.71
09/03/12 MTG INS PMT $192.28 $188,258.56
09/02/12 PAYMENT ( Details) $1,280.76 $188,258.56
08/03/12 MTG INS PMT $192.28 $188,546.51
08/01/12 PAYMENT ( Details) $1,280.76 $188,546.51
07/27/12 MTG INS PMT $0.01 $188,833.57
07/04/12 MTG INS PMT $192.28 $188,833.57
07/01/12 PAYMENT ( Details) $1,280.76 $188,833.57
06/03/12 MTG INS PMT $192.27 $189,119.73
06/01/12 PAYMENT ( Details) $1,280.75 $189,119.73
05/10/12 PAYMENT ( Details) $1,018.47 $189,405.00
05/10/12 NEW LOAN SET-UP $189,405.00 $189,405.00



This post was edited on 10/10 at 12:00 am



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Geaux Smoke
LSU Fan
Aspen, California
Member since Aug 2010
1977 posts

re: My mortgage - FML


how much debt/bills do you pay each month (car note, insurance, student/personal loans, credit cards, cell phone)?

ETA: safe scenario: if you gross more than your mortgage a week then go for it. $67k/year. im no financial advisor but this should give you enough room to save if something comes up



This post was edited on 10/10 at 5:57 am


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LSU1018
LSU Fan
Baton Rouge
Member since Feb 2007
5102 posts

re: My mortgage - FML


If you make under $60k, I would not even consider it. Personally I wouldn't feel comfortable with that note unless i made over 80k but I tend to be on the safe side. Just remember, with a home, comes expenses related to the home. Also, do you have a car note or will you need a new vehicle anytime soon?





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Catman88
LSU Fan
Baton Rouge, LA
Member since Dec 2004
39345 posts

re: My mortgage - FML


I would say you would need to net 4500 a month. Which would be a job making about 73k. $192 MTG Insurance pmt? Damn thats high.





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tirebiter
LSU Fan
ATL
Member since Oct 2006
5128 posts

re: My mortgage - FML


Assuming T&I are included in the payment, no or very cheap car payment, somewhat frugal lifestyle = > $71k. $2300/yr for mortgage insurance is crazy. Whatever you do, build up a cash reserve fund of 9-12 months if you do not have one for unforeseen house and other expenses.





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TheHiddenFlask
Clemson Fan
The Welsh red light district
Member since Jul 2008
16755 posts

re: My mortgage - FML


quote:

I would say you would need to net 4500 a month. Which would be a job making about 73k. $192 MTG Insurance pmt? Damn thats high.


That's what I was figuring as well (~75k).

I've been going back and forth between buying a "starter home" for around 200k and having it all to myself and buying a more permanent, larger house and renting 1 or 2 rooms out to friends. The only reason I'm considering the latter is due to me not wanting to give up the awesome interest rate I would be picking up.






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YogaPants
LSU Fan
Baton Rouge
Member since Aug 2008
1549 posts

re: My mortgage - FML


You guys are right on with the salary. I do have a car note and I definitely overspend on the weekends, which makes my rainy day fundage a lot lower than Id like.





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weaglebeagle
Auburn Fan
Alabama
Member since Jan 2011
1317 posts

re: My mortgage - FML


How much was your down payment percentage wise?





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BACONisMEATcandy
LSU Fan
Not a State
Member since Dec 2007
40764 posts

re: My mortgage - FML


I would do the latter if I could... But a starter home up here is minimum 550k unfortunately unless I want an hour commute





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LSU1018
LSU Fan
Baton Rouge
Member since Feb 2007
5102 posts

re: My mortgage - FML


I would drive an hour





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BACONisMEATcandy
LSU Fan
Not a State
Member since Dec 2007
40764 posts

re: My mortgage - FML


I rented out there for a year... Cannot do that





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I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
31782 posts

re: My mortgage - FML


quote:

arger house and renting 1 or 2 rooms out to friends


working on this right now myself






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YogaPants
LSU Fan
Baton Rouge
Member since Aug 2008
1549 posts

re: My mortgage - FML


I've thought about a roommate but you can't put a price on walking to the fridge naked





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GoIrish02
Notre Dame Fan
Metairie
Member since Mar 2012
108 posts

re: My mortgage - FML


Total Mortgage payment = 28% of gross income
Total monthly debt (mortgage + all other monthly debt, e.g. car, credit cards, etc.) = 36% of gross income

Plus 20% cash down payment

My family runs a large savings and loan and this has been the rule for all their mortgages since 1928, and this is why they have been in business since 1928 and have had zero defaults since 2008. Any federally chartered savings and loan will use the same ratios. Commercial banks getting away from sound lending risk analysis (largely by demand of the government) is why we had the mortgage crisis in 2008.

You need to include everything in your mortgage payment (PITI = Principal + Interest + Taxes + Insurance, plus the PMI you are paying) to do this calculation right. You just included principal + interest + PMI, but no taxes or insurance.

If you cannot afford the total mortgage costs at 28% of gross income, you have no business buying a house.

You are going about the process all wrong, and you are essentially buying a car based on the monthly payment, rather than the cost of the car. No one should buy a house based on the monthly note alone, and the fact you include PMI means you have little to no down payment, which means you have decided to spend your money thus far in life rather than save money responsibly to prepare for home ownership.

Instead, try starting with how much you make and spend every month, add in ALL the costs of the house, then add your car note, then take an honest look at where you are spending your money each month.

If you're too poor to meet the 28%/36% numbers, then work harder/smarter to make more money and save your money for a down payment instead of trying to be a "$30,000 millionaire". If you're over the 28%/36% number, you're not ready to own a home and will be flirting with financial ruin shortly.

I'm giving the purely financial side but, all this aside, it's okay not to own a home and I think the intrinsic value of owning versus renting is vastly overrated, especially since 2008 and given the cost of insurance in Louisiana. There are far better places to invest money than putting it into a house, which is really a liability that takes money out of your pocket, not an asset.



This post was edited on 10/11 at 3:31 pm


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GoIrish02
Notre Dame Fan
Metairie
Member since Mar 2012
108 posts

re: My mortgage - FML


quote:

ETA: safe scenario: if you gross more than your mortgage a week then go for it.


This guy gets it, 1 week's pay / 4 weeks per month = 25% maximum gross income to housing costs.






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TheHiddenFlask
Clemson Fan
The Welsh red light district
Member since Jul 2008
16755 posts

re: My mortgage - FML


quote:

I've thought about a roommate but you can't put a price on walking to the fridge naked


I know. I've been living by myself, while working on a 3 month project and I really enjoy not having to wear full clothes unless I want to.






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Grasshopper
LSU Fan
Ocean Springs, MS
Member since Dec 2007
374 posts

re: My mortgage - FML


delete





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TheHiddenFlask
Clemson Fan
The Welsh red light district
Member since Jul 2008
16755 posts

re: My mortgage - FML


You posted a post just to say delete?





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ForeverLSU02
Penn Fan
Albany
Member since Jun 2007
27008 posts

re: My mortgage - FML


delete





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foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
29491 posts

re: My mortgage - FML


quote:

But a starter home up here is minimum 550k unfortunately unless I want an hour commute


Dude - where can you find a starter home here for under 550 without a 2 hour commute?






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