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re: How much home can I afford?
Posted on 10/18/11 at 1:34 pm to vettegc
Posted on 10/18/11 at 1:34 pm to vettegc
[quote]Thanks for the replies! So what if I only want to stay in the house a couple years? Same advice? I was hoping to find something undervalued in the down market and being able to sell later? Oh and this would be in Baton Rouge or close by. Eventually I'd like to build on my property but I'm not ready to build my final home yet.[/quote]
You don't sound old enough to be talking about your FINAL home....... I'm 64 and just bought what I consider to be my "first" retirement home. Expect to sell in 10 years as needs change.
You don't sound old enough to be talking about your FINAL home....... I'm 64 and just bought what I consider to be my "first" retirement home. Expect to sell in 10 years as needs change.
0
Posted on 10/18/11 at 1:54 pm to ItNeverRains
quote:
According to the Federal Fannie Mae guidelines, a client should be spending no more than 28% of monthly income for housing payments. The 28% Housing Ratio is calculated by taking 28% of the borrower's gross monthly income (e.g. $50,000 a year = $4166 per month X 28% = $1166).
I make a little less than the OP and in no way would I spend anywhere close to 28%. I spend less than 10%. To each his own I guess...
Posted on 10/18/11 at 3:20 pm to I Love Bama
quote:
in no way would I spend anywhere close to 28%. I spend less than 10%. To each his own I guess
I agree with this. Damn struggling with trying to keep up with the Jone's. We live in a very nice and modest 2200 sq ft home.
Mine is around 14% just using my salary. If I use the wife's, the total household income makes it fall to 8.9%. We have a 30yr term, but b/c of our low note we can pay extra on the principal. We anticipate paying it off in 18 years at the current rate.
Posted on 10/18/11 at 3:43 pm to vettegc
quote:Is your salary set or do you work on commission as well? Because you should factor this in as well if you have a less than stellar year or a crappy economy results in you only making 80k/year.
estimated annual income
Posted on 10/18/11 at 3:57 pm to ItNeverRains
quote:
28% -- The Housing Ratio
Is pretty darn high for a single income purchase. I would think a 175k loan would be a pretty safe top end.
Posted on 10/18/11 at 6:27 pm to LSUAfro
28% of GROSS is too high, IMO.
28% of TAKE-HOME would be an absolutely cap for me. 28% of your gross would be more like 40% of you take-home (just ball-parking, no figures run).
28% of TAKE-HOME would be an absolutely cap for me. 28% of your gross would be more like 40% of you take-home (just ball-parking, no figures run).
Posted on 10/18/11 at 9:01 pm to I Love Bama
quote:
I make a little less than the OP and in no way would I spend anywhere close to 28%. I spend less than 10%. To each his own I guess.
that isnt really the question in this thread.
Posted on 10/18/11 at 11:52 pm to saderade
salary is set..hopefully increasing with experience.
I know renting is safe but I feel like I'm throwing my money away? With a house you at least gain equity. I think nice single room apartments are probably $800-$1000 in baton rouge. If I live there for 3 years that could be $36,000 that could have been building toward something. Not saying anyones wrong, just how I have been thinking. Also with a house I might be able to rent a room if I have extra space. Thanks again
I know renting is safe but I feel like I'm throwing my money away? With a house you at least gain equity. I think nice single room apartments are probably $800-$1000 in baton rouge. If I live there for 3 years that could be $36,000 that could have been building toward something. Not saying anyones wrong, just how I have been thinking. Also with a house I might be able to rent a room if I have extra space. Thanks again
Posted on 10/18/11 at 11:57 pm to vettegc
What about paying the 1000 rent and then saving 1000 and when you are ready to "settle down" use the 36000 as the down payment 
.
. Posted on 10/19/11 at 9:50 am to vettegc
quote:
I know renting is safe but I feel like I'm throwing my money away
Calculate the amount of money you would be "throwing away" in interest payments, flood insurance, homeowners insurance, taxes, water bills, lawn care, etc. I bet it's close to your rent. And you won't have to pay 6% of the value of your house in realtor fees when your lease expires when renting.
Posted on 10/19/11 at 10:14 am to Ric Flair
quote:
Calculate the amount of money you would be "throwing away" in interest payments, flood insurance, homeowners insurance, taxes, water bills, lawn care, etc. I bet it's close to your rent. And you won't have to pay 6% of the value of your house in realtor fees when your lease expires when renting.
Also, there could be another dip in the economy and in the short term you can't sell the house for what you paid for it. Happened to me twice, they were great houses in good neighborhoods, but it took several years for the market to rebound. They ended up being great investments over the long term which is how home ownership should be approached.
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