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Message
re: How much house can I afford?
Posted on 1/25/23 at 1:57 pm to thegreatboudini
Posted on 1/25/23 at 1:57 pm to thegreatboudini
quote:
Can you define house poor?
I know it's not cut and dry like that, but genuinely interested in what you would say is house poor.
To add a little context to what everyone else has said. House poor becomes a bigger problem when you have a wife that doesn't understand budgeting. The wife and I had quite a few arguments about budgeting when we bought our first house and we bought it for $95,000. I feel for people buying their first houses in the market. That same house sold for $230k recently. No clue how we would have afforded it had we not gotten it for $95k. Fortunately she now out-earns me and I spend very little on things that are not assets. I enjoy doing work around my house and I'm constantly doing stuff to help increase property value or spruce up the place. She still spends though but not any more than she used to fortunately.
If you don't have a wife, being house poor can be the difference in taking a girl out on a date or making your mortgage. You'll have to sacrifice some amount buying within your budget, but if you overspend, you'll feel the pain much more.
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Posted on 1/25/23 at 2:27 pm to tigerfootball123
Reach out. You could qualify for a physician loan, which is a great deal to gain equity and pay off your loans (if applicable). My email is britt.bowker@canvasmortgage.com
Posted on 1/27/23 at 9:07 am to TMFBB21
Question. For those who are saying 25% of your take home, when did you purchase your house?
I make around $135k and my wife is in the $60k range. Going off the 25% recommendation we would be at a $245k home. That would put us in a “less than desirable” part of town in a below average school district.
I ask the question because I’m curious if many of you purchased your home before the market went dumb. Kind of how rental investors tell you to rehab and refinance homes to scale your business but they did that when you could buy homes for $100k, not when the same homes are now $250k.
I will say I understand the logic, I just wonder about the practicality of it. In my case I realized I had to choose either to have a nicer home in a better location but cut back in some areas or go for the cheaper home but maintain my lifestyle. For me the home was more important. I don’t think it’s as simple as “stay below this number”. I think one must consider all the factors and make the decision based on their personal feelings.
I make around $135k and my wife is in the $60k range. Going off the 25% recommendation we would be at a $245k home. That would put us in a “less than desirable” part of town in a below average school district.
I ask the question because I’m curious if many of you purchased your home before the market went dumb. Kind of how rental investors tell you to rehab and refinance homes to scale your business but they did that when you could buy homes for $100k, not when the same homes are now $250k.
I will say I understand the logic, I just wonder about the practicality of it. In my case I realized I had to choose either to have a nicer home in a better location but cut back in some areas or go for the cheaper home but maintain my lifestyle. For me the home was more important. I don’t think it’s as simple as “stay below this number”. I think one must consider all the factors and make the decision based on their personal feelings.
Posted on 1/27/23 at 10:05 am to GAFF
quote:
I make around $135k and my wife is in the $60k range. Going off the 25% recommendation we would be at a $245k home.
How did you calculate this. Looks off.
Rough math..195K x 70% for take home x 25% divided by 12...I'm getting like $2,800/month?
Posted on 1/27/23 at 10:21 am to lynxcat
After 401k, medical deductions, 529 plans, savings, and taxes our bring home is around $6k. So I took 25% of the total bring home and ended up with $1,500.
Posted on 1/27/23 at 10:48 am to tigerfootball123
I am glad I am not the only one who is clueless on this stuff 
Home ownership seems like a non reality for me for another few years unfortunately. I want to buy a house so bad.
I live in Colorado so homes are crazy here. I’ve saved up about 20K but that literally is nothing for a down payment here. Just gonna keep saving for another couple years I guess..
Home ownership seems like a non reality for me for another few years unfortunately. I want to buy a house so bad.
I live in Colorado so homes are crazy here. I’ve saved up about 20K but that literally is nothing for a down payment here. Just gonna keep saving for another couple years I guess..
Posted on 1/27/23 at 10:53 am to GAFF
quote:
After 401k, medical deductions, 529 plans, savings, and taxes our bring home is around $6k. So I took 25% of the total bring home and ended up with $1,500.
I bought my house in 2019. My mortgage is around $1,350 but I pay more in principal to bring it to $1,500. I refinanced to 2.625% before interest rates went through the roof. Today I probably wouldn't be able to afford my house while still paying for private school and saving for retirement and vacations like I do currently.
Posted on 1/27/23 at 12:31 pm to GAFF
quote:
After 401k, medical deductions, 529 plans, savings, and taxes our bring home is around $6k. So I took 25% of the total bring home and ended up with $1,500.
Take home is 36% of gross after all of that? Seems quite low on the take home given almost $200K gross. While this is heresy to second guess...what are your savings rates (retirement, 529)?
Posted on 1/27/23 at 1:59 pm to lynxcat
Should have mentioned this before and is probably where the confusion is coming from. I currently receive $2000 a month per diem due to my location but it could change at any minute so I don’t dedicate it to any bills and instead put it in savings every month. So after removing that I’m at $110k-ish and $170k total.
Posted on 1/28/23 at 10:32 pm to GEAUXT
quote:
Go read join the white coat investor. Listen to all of hid podcasts.
Unless you're in a VHCOL area you should 2x gross salary or less.
I’m fairly certain his recommendation is “1x salary. You can stretch up to 2x salary, and beyond that, you’re going to make big sacrifices”
We bought at about 1.2x annual income (which is now about 1x as our practices mature). We started out with loans that were about 75% of annual income, roughly.
I’m very happy we didn’t go any bigger/nicer/fancier in our situation.
Posted on 1/29/23 at 9:01 am to tigerfootball123
If you are just finishing a fellowship you probably have debt. I would focus on that before buying a home, especially now with current rates. Also, if you aren’t sure you are staying for at least 5-6 years no way you should buy. Closing costs take 4 years to make back and if the market drops you are upside down. Docs move all the time due to management, family issues, or better opportunities. I’d give yourself at least a year to figure out your actual monthly finances and if you like were you are working. Even then, whatever they qualify you at take no more than 75% of that number or you’ll be house poor.
Posted on 1/29/23 at 7:27 pm to tigerfootball123
Don’t depend on an app to tell you how much you can afford. Use your gut/common sense.
I rented at 10% take home my first year, bought first house at 12-14% take home pay after renting for a year (piled up cash for a 20% down payment and did a 15 year mortgage). Sold after a few years for essentially what I payed for it. Would have financially been ahead renting. Bought current house at 15% take home (20% down, 30 yr mortgage )and refinanced 3 years ago or so to a 15 yr mortgage, still 15% of take home).
My advice would be to rent for a year. First house was 1.2x salary. Second house was 2x salary. If you max out retirement plans, the high salary doesn’t look so high. Especially if you have a 401a, deferred comp, etc., in addition to the 401k/403b limits
ETA: this is resident going to attending advice. Bottom line, live like a resident for a year.
I rented at 10% take home my first year, bought first house at 12-14% take home pay after renting for a year (piled up cash for a 20% down payment and did a 15 year mortgage). Sold after a few years for essentially what I payed for it. Would have financially been ahead renting. Bought current house at 15% take home (20% down, 30 yr mortgage )and refinanced 3 years ago or so to a 15 yr mortgage, still 15% of take home).
My advice would be to rent for a year. First house was 1.2x salary. Second house was 2x salary. If you max out retirement plans, the high salary doesn’t look so high. Especially if you have a 401a, deferred comp, etc., in addition to the 401k/403b limits
ETA: this is resident going to attending advice. Bottom line, live like a resident for a year.
This post was edited on 1/29/23 at 7:45 pm
Posted on 1/29/23 at 7:54 pm to Ric Flair
From fellowship to private group myself..20 yrs ago..rent, rent, rent for several years as you know nothing about the reality of your job/marriage/happiness until you’ve had boots on the ground, so to speak, for several years
Posted on 1/30/23 at 8:08 am to shamrock
Our mortgage + taxes + insurances + home bills (electric, internet, etc.) is almost exactly 28% of our final take home pay (after taxes and IRA contribution) & it feels like we’re paying to much in housing. When/if we buy something else we’re going to try and stick to that number being no higher than 25%.
This post was edited on 1/30/23 at 8:22 am
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