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Buying a House question
Posted on 4/1/09 at 10:41 am
Posted on 4/1/09 at 10:41 am
So if a couple brings in a combined income of 70,000/yr. They have no debt. What is the absolute most that they could afford to spend on a house? They own vehicles outright also.
6
Posted on 4/1/09 at 10:42 am to LSU1018
How much is available for a down payment?
Posted on 4/1/09 at 11:04 am to Golfer
10k
Posted on 4/1/09 at 11:09 am to LSU1018
First time homeowner?
Posted on 4/1/09 at 11:13 am to LSU1018
I come up with no more than $250K. That is using 25% of your gross income, 5.5% interest rate and also ignoring a whole host of fees and expenses. The real number is probably under $200K.
The real question you should be asking is what's the absolute minimum I can get by with and still be relatively comfortable.
The real question you should be asking is what's the absolute minimum I can get by with and still be relatively comfortable.
Posted on 4/1/09 at 11:42 am to Tiger JJ
get pre approved due yourself that favor. its easy quick and you will have an idea of total cost.
Posted on 4/1/09 at 11:44 am to bignate76
But be aware that the largest loan you're approved for is not the same as the largest house you can realistically afford.
Posted on 4/1/09 at 12:31 pm to Tiger JJ
quote:
The real question you should be asking is what's the absolute minimum I can get by with and still be relatively comfortable.
I agree.
Would you walk into a car dealership and ask them how much is the absolute most you could spend there? Of course not, but people do this when buying a house without hesitation.
Asking a mortgage broker/loan officer how much you can borrow is akin to asking the fox how many hens are in the hen house. Keep in mind they don't have your best interests at heart. They get paid more by getting you a bigger loan. They couldn't care less if you end up eating bread and water every night so you can afford the loan they sold you. Remember, they are sales people.
Posted on 4/1/09 at 12:36 pm to LSU1018
I'd be conservative and just use the husband's income for your calculations, in case the wife wants to take significant time off once she has kids (if it's a young couple)
Posted on 4/1/09 at 12:41 pm to Ric Flair
quote:
I come up with no more than $250K. That is using 25% of your gross income, 5.5% interest rate and also ignoring a whole host of fees and expenses. The real number is probably under $200K.
.
Yea I think they are preapproved and are looking in the price range of 210,000 but I just consider that to be pretty high for that amount of income. Thanks for the input.
Posted on 4/1/09 at 2:05 pm to Tiger JJ
quote:
As Michael Lewis says, housing is the "acceptable lust".
LINK
Great read
Posted on 4/1/09 at 2:38 pm to Tiger JJ
quote:
I come up with no more than $250K. That is using 25% of your gross income, 5.5% interest rate and also ignoring a whole host of fees and expenses. The real number is probably under $200K.
Also ignoring property tax that can be 500-600/month in some areas.
Posted on 4/1/09 at 3:45 pm to yellowfin
and HOA fees.
Welcome to Cinco Ranch.
Welcome to Cinco Ranch.
Posted on 4/1/09 at 4:40 pm to LSU1018
Dude, if you're in Plaquemines, it's probably going to be a very substantial homeowners insurance bill, so you gotta factor that in.
Have you shopped around for that?? That alone will most likely be $200 a month minimum.
Posted on 4/1/09 at 5:33 pm to LSU1018
quote:
So if a couple brings in a combined income of 70,000/yr. They have no debt. What is the absolute most that they could afford to spend on a house? They own vehicles outright also.
That was our EXACT situation when I bought my house. I borrowed 200K. In retrospect, I could have borrowed 300K and made it but it would have been stressful (shite happens). My approach was to undershoot loan and save for upgrades later.
IE, we had cheap linoleum floors put in initially with the intention of putting in really nice tile later when we had more money.
Posted on 4/1/09 at 10:49 pm to LSU1018
If you go to bankrate.com and plug in their numbers depending on debt ect, looks like with 5883 of monthly pretax income and 0 debt (from what you said), online calculator says about 275k. This is assuming zero debt and zero down payment and only 28% of income which seems to be the standard, 25% is better and more conservative.
Posted on 4/2/09 at 12:55 am to lsu1percent
Like Ric Flair said though, it's probably best to just put the highest one salary into the calculator. That way if the other has to quit working you can still afford the house.
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