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Started By
Message
How much home can I afford?
Posted on 1/10/22 at 10:04 pm
Posted on 1/10/22 at 10:04 pm
Background: Single guy, no kids. Early/mid 30s and been renting for too long. Never owned before. Thinking I need to get on the property ladder and work on my own equity instead of someone else’s
Gross Salary: 110K
Available for down payment: 100K - 125k
Total Debt/Obligation (Student Loans, Car loan, Credit Cards, etc): Zero. None. Zilch.
Location: Currently rent in Orleans. Understandably May have to leave Orleans due to price. Must also factor in insurance.
Other info: I like saving. Currently saving $20k/year in 401K. Would like to continue saving a healthy amount every month but obviously my expenses will increase if I make a purchase (current rent is $800). I like living a simple life, thought about just getting a little condo (of course will have to factor in HOA fees)
Gross Salary: 110K
Available for down payment: 100K - 125k
Total Debt/Obligation (Student Loans, Car loan, Credit Cards, etc): Zero. None. Zilch.
Location: Currently rent in Orleans. Understandably May have to leave Orleans due to price. Must also factor in insurance.
Other info: I like saving. Currently saving $20k/year in 401K. Would like to continue saving a healthy amount every month but obviously my expenses will increase if I make a purchase (current rent is $800). I like living a simple life, thought about just getting a little condo (of course will have to factor in HOA fees)
21
Posted on 1/10/22 at 10:28 pm to danilo
Technically you could "afford" a $600-700k place but "afford" and actually afford are different. Sounds like you don't want too much home and want to keep a similar saving lifestyle as you currently do. $400k on a small condo in Orleans could be do-able or you could step outside the city for something slightly nicer. $400k with 20% down will be about $2,000 mortgage including taxes.
Personally, I'd get out of that shite hole but to each their own.
Personally, I'd get out of that shite hole but to each their own.
This post was edited on 1/10/22 at 10:28 pm
Posted on 1/10/22 at 10:30 pm to danilo
Props on finding somewhere to live in Nola for $800/month
Posted on 1/10/22 at 10:37 pm to Dale Gribble
quote:
Props on finding somewhere to live in Nola for $800/month
I know I am pretty lucky. I am also aware landlord could totally jack up the price if he wanted to. All more the reason I need to set myself up.
Posted on 1/10/22 at 10:38 pm to danilo
quote:
Gross Salary: 110K
Available for down payment: 100K - 125k
You're basically me, but with an extra $40-65k in down payment and 5-10 years younger (congrats).
I'm looking for places in the ~$370k range in Metairie. That would allow me to save $1000/month. With your down payment, you can get away with around $415k and do the same. I know that inflation is terrible right now, but if my salary keeps up with inflation, an extra $1000k/month (in today's money) is a comfortable cushion.
Your current rent being $800 seems like a good deal for the NOLA area, especially if you're comfortable with where you are. I'd recommend that you keep on saving. Interest rates are going up, so I think that housing prices have pretty much peaked. If you can keep that cheap rent, then run with it.
Posted on 1/11/22 at 6:56 am to danilo
quote:
Currently rent in Orleans. Understandably May have to leave Orleans due to price, and not wanting to get kilt.
The area you work in is important. The horrendous traffic can make the commute absolutely miserable.
Posted on 1/11/22 at 7:03 am to TigerTatorTots
quote:
Gross Salary: 110K
quote:
Technically you could "afford" a $600-700k
What?
Posted on 1/11/22 at 7:10 am to thegreatboudini
quote:
Gross Salary: 110K
quote:
Technically you could "afford" a $600-700k
What?
quote:
Available for down payment: 100K - 125k
This is how.
Also, I would recommend putting no more than 5% down on a house. Interest rates are too low to invest more than that and PMI isn't as bad as people want to think.
Keep 6-9 months in some type of accessible accounts for emergencies and put the rest into investments.
Rule of thumb is generally try to stay under a total value of 3x your annual income. There are other ways to break this down, but that seems to work well for me. You also need to consider tax and insurance rates where you want to live as these can vary substantially.
This calculator can give you a more detailed assessment.
This post was edited on 1/11/22 at 7:16 am
Posted on 1/11/22 at 7:19 am to seawolf06
Even with 125k down, the guy's net income is sub 6k a month. We're going to say that could afford someone a 600-700k home?
Posted on 1/11/22 at 7:33 am to danilo
Man $800/mo if you're happy if hard to get rid of if you really like it and with how high property has gotten the last year.
That being said, I'm sure you can find a pretty reasonable condo if it's just you for a reasonable price.
$60k-$80k down on a $300k-$400k condo in NOLA should be easily doable for you, would avoid PMI in that case. Mortgage (by itself, not including insurance, HOA and Taxes) should be around $1,000/mo on a 30 year for a $300k place in that instance or about $1,350/mo for a $400k place.
That being said, I'm sure you can find a pretty reasonable condo if it's just you for a reasonable price.
$60k-$80k down on a $300k-$400k condo in NOLA should be easily doable for you, would avoid PMI in that case. Mortgage (by itself, not including insurance, HOA and Taxes) should be around $1,000/mo on a 30 year for a $300k place in that instance or about $1,350/mo for a $400k place.
Posted on 1/11/22 at 8:05 am to danilo
(no message)
This post was edited on 2/28/22 at 3:45 am
Posted on 1/11/22 at 8:22 am to tigersfan1989
quote:
What? I make 150k / year and don’t think I’d be able to swing 600-700k house even with that down payment
Yeah I think that is why "afford" was in quotes. If you put those metrics into a housing salary calculator it spits out 600kish.
Posted on 1/11/22 at 8:50 am to danilo
you first need to determine how much you need to spend on everything that isn't involved with a home. How much do you spend on the following:
- Eating out
- Groceries
- travel
- Hobbies/entertainment
- Cars
- Toys
- Clothing
- Retirement savings
- Discretionary spending per month
- Etc.
Once you have ironed that out, THEN you can figure out how much home you can afford. If you dont allow for your spending habits/needs then you'll be giving up things you want to do/have in exchange for a house. This is essentially being house poor. That isn't a good situation to be in.
- Eating out
- Groceries
- travel
- Hobbies/entertainment
- Cars
- Toys
- Clothing
- Retirement savings
- Discretionary spending per month
- Etc.
Once you have ironed that out, THEN you can figure out how much home you can afford. If you dont allow for your spending habits/needs then you'll be giving up things you want to do/have in exchange for a house. This is essentially being house poor. That isn't a good situation to be in.
Posted on 1/11/22 at 9:06 am to danilo
1800 a month seems like the ceiling to comfortably consider at your rate, maybe even 1700 for PITI. Just make sure to keep some money on hand for things breaking. Make sure you get a new roof after a hail storm so insurance covers it too.
Posted on 1/11/22 at 9:22 am to danilo
How flexible is your job regarding location? Honestly, I would get out of NOLA if possible.
Posted on 1/11/22 at 10:20 am to Hangit
quote:
The area you work in is important. The horrendous traffic can make the commute absolutely miserable.
Understandable. Been working from home for 2 years. Don’t think we going back.
Posted on 1/11/22 at 10:36 am to danilo
quote:
Available for down payment: 100K - 125k
If you don't mind me asking...where do you keep your down payment saved?
I'm a little younger than you and planning to put "buying a home" on our horizon for the next 3-5 years. We save a decent amount but it's all committed to retirement accounts. Did you sacrifice retirement contributions or build up simultaneously?
And yea, home prices in NOLA right now are dumb (source: me, always looking on Zillow instead of working)
Posted on 1/11/22 at 11:17 am to danilo
If I was in your situation (single with a decent income) I would look to buy a duplex or triplex and use my first home purchase as an investment opportunity.
Or buy a single family set up well for rent paying roommates.
Or buy a single family set up well for rent paying roommates.
This post was edited on 1/11/22 at 11:19 am
Posted on 1/11/22 at 11:36 am to WDE24
quote:
If I was in your situation (single with a decent income) I would look to buy a duplex or triplex and use my first home purchase as an investment opportunity.
I hear ya. My lack of handy man skills does seem a bit daunting.
quote:
Or buy a single family set up well for rent paying roommates.
Makes financial sense, not really looking for roommates
Appreciate suggestions though
Posted on 1/11/22 at 11:43 am to danilo
Obviously no one can predict the future, but I wouldn't be chomping at the bit to buy right now with real estate prices really inflated. I'd wait a bit for supply to catch up to the demand and prices to come back to earth a bit.
That said, you'd need to weigh the prices coming down with the interest rates, which will be rising (though you can always refi down the line).
That said, you'd need to weigh the prices coming down with the interest rates, which will be rising (though you can always refi down the line).
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