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House buying question.
Posted on 6/29/16 at 11:35 pm
Posted on 6/29/16 at 11:35 pm
What's the money boards thought on amount of monthly income going towards your mortgage? I currently live in a house I paid $275,000 for and owe $240,000 and could sale for $310,000. I'm 35 with no kids and the wife is wanting to move to a nicer neighborhood. The only bills I have besides the normal monthly bills are two car notes that are $850 a month and the standard monthly bills of cell phone, cable and so on. What would be the ideal house price for the following annual salaries be:
$150,000
$200,000
$250,000
$300,000
$150,000
$200,000
$250,000
$300,000
This post was edited on 6/29/16 at 11:37 pm
7
Posted on 6/29/16 at 11:58 pm to Rize
Ideally you want to go for no more than 2-3x your annual income.
Posted on 6/30/16 at 12:12 am to Rize
There are some great calculators online for this if you haven't already gave those a go.
Posted on 6/30/16 at 7:24 am to AmosMosesAndTwins
quote:
There are some great calculators online for this if you haven't already gave those a go.
it's also been discussed a few dozen times, recently even
from #x your annual income, to % of annual income, to % of net monthly income to etc. etc.
+ a million opinions on google... i'd just take the average
Posted on 6/30/16 at 9:54 am to Rize
Everyone has their opinions. Me I go with % of total monthly overhead vs your income. I also take in to consideration my income if I had to change jobs. Could I change jobs quickly and get at least the same money being the primary concern.
My home cost me about 4 times my income. However I own all my cars and have no other debts. I spend roughly 40% of my take home on the house.(mortgage, insurance, taxes, utilities)
My home cost me about 4 times my income. However I own all my cars and have no other debts. I spend roughly 40% of my take home on the house.(mortgage, insurance, taxes, utilities)
Posted on 6/30/16 at 10:03 am to Rize
Do you plan on having kids at all?
I like 25% of net monthly income as a total payment on a 30 year note as a general guideline. But there are a million right answers to this question depending on your long term goals and the lifestyle you prefer.
I like 25% of net monthly income as a total payment on a 30 year note as a general guideline. But there are a million right answers to this question depending on your long term goals and the lifestyle you prefer.
Posted on 6/30/16 at 10:14 am to Rize
You'd be smart to consider the future of having kids or not. If so, will your wife stay home with them and give up her job...this assumes she's currently working. Will you put them in day care? Day care costs are similar to private school tuition. They can range from $600 per month to $1500 per month. I have 3 kids in daycare now and spend $3k/mth. Good news for me is they'll all be in public school within the next 4yrs. If you have a public school option you'll only have bridge the gap while they're in daycare. If you don't you'll be burdened with private school for 13+ more yrs.
Also, consider your mid to long term career opportunities or possibly the lack of. You do not want to be house poor and be forced into doing "whatever it takes" to continue making payments if there's an unexpected break in employment.
FYI - I'm 39 and have owned 2 houses. We've used the 2.5 times combined salary equation and have been fine.
Also, consider your mid to long term career opportunities or possibly the lack of. You do not want to be house poor and be forced into doing "whatever it takes" to continue making payments if there's an unexpected break in employment.
FYI - I'm 39 and have owned 2 houses. We've used the 2.5 times combined salary equation and have been fine.
Posted on 6/30/16 at 10:49 am to Rize
I agree that percentage of your monthly income is a smarter way to look at it. Plus it depends on where you live when it comes to insurance and property taxes.
A 300k house in LA might only be a 1400 house note with 20% down. Here in Houston, it's 2000.
As you make more money, I think it's wise to utilize less of the percentage of your income as well. Our current house is less than 2x's our income, but I see no reason to have anything more. Whereas if we made 100k combined, I don't think it would be outrageous to buy a 250k house.
Just to give my opinion on what I'd spend at different income levels (not that my opinion is the best or right opinion). And this is just in reference to houses in my current area and the mortgages associated with them.
$150,000 - 300k house max
$200,000 - 400k house max
$250,000 - 450k house max
$300,000 - 500k house max
There's also a good chance that if I was pulling 300k, I'd have a completely different opinion
. But I can tell you that at 150-200k I am happy to be in a 300k house.
A 300k house in LA might only be a 1400 house note with 20% down. Here in Houston, it's 2000.
As you make more money, I think it's wise to utilize less of the percentage of your income as well. Our current house is less than 2x's our income, but I see no reason to have anything more. Whereas if we made 100k combined, I don't think it would be outrageous to buy a 250k house.
Just to give my opinion on what I'd spend at different income levels (not that my opinion is the best or right opinion). And this is just in reference to houses in my current area and the mortgages associated with them.
$150,000 - 300k house max
$200,000 - 400k house max
$250,000 - 450k house max
$300,000 - 500k house max
There's also a good chance that if I was pulling 300k, I'd have a completely different opinion
. But I can tell you that at 150-200k I am happy to be in a 300k house. Posted on 6/30/16 at 10:54 am to Rize
Well, mortgage companies will typically cap you at 28% of monthly income going towards your PITI payment
However, I think some number less than that is truly safe and smart....all about how much of your monthly income that you want to put into servicing debt
However, I think some number less than that is truly safe and smart....all about how much of your monthly income that you want to put into servicing debt
Posted on 6/30/16 at 11:07 am to BLM
I don't think I would go over 25% of my net take home pay.
Posted on 6/30/16 at 11:28 am to KG6
quote:
But I can tell you that at 150-200k
It's amazing how someone always find a way to squeeze in their 6 figure salary.
Posted on 6/30/16 at 11:32 am to PeteRose
That's a household income. Not a singular salary.
Posted on 6/30/16 at 1:54 pm to KG6
Thanks for the info.
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