My DH's drink must have been spiked!
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| Mon, 08-22-2005 - 9:36pm |
My husbands dream home is going on the market in about 6 months. In the same neighborhood as we currently live but way nicer house. Its a 5 bedroom colonial, 5 car garage, apartment over the detached garage, and a huge pond in the front yard. Beautiful House, I would love to live there.
A little background we currently have an annual income of $50k-$60k. We owe about $11k on cc's, and have a mortgage at $235k. Our house would sell for about $400k.
So the yahoo I married, calls me at work and asks if we are in good shape to be able to qualify for a mortgage in the $650,000 range. HELLO! What?! Is he nuts! Did he think I was drunk and would say yes? I don't even want to know what the payment on a $650k house would be, but I am sure its way more then we make.
But he is delusional enough that he went to talk to someone tonight about a new job. Something he will dislike but twice what he makes. Even if he get a new job, and I go to work full time in January, its still not enough to cover $650k of debt.
I just have to laugh! Don't worry the new me would not sign on the line for such a ridiculous amount of money!


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Shannon,
there is a beautiful home near where we live that is my dream home too, it is huge and a white colonial with rolling fields and stables, it just looks so perfect..... but my dh said even if i won the lottery i probably couldn't afford to live there with the property taxes and upkeep! What would the property taxes be on a 650k house????! My dh and i always told ourselves, even if it was just to make ourselves feel better, that we didn't need to have a huge home and lots of things to make us happy, if we were healthy and comfortable and had eachother that is all that mattered. I can't imagine spending the rest of my life at a job i thoroughly hated to pay for my dream home,,,, it just seems like the home wouldn't be enough to counteract the unhappiness at work. I think you know enough now to know if you could make it work and if it would be worth it, good luck convincing dh!!!!
Shannon
You are absolutely right on the money!!! We would have to rent every room, the apartment, and still have to work all the time to support the mortgage payment. The property taxes are pretty close to what we already pay since its the same neighborhood. I actually don't believe that it will sell for $650, maybe I am lowballing my house.
But regardless I am not moving anywhere and have a mortgage higher then what we have now. Not even one dollar higher. If he can come up with the difference in 6 months then I will happily move but no way would it be to a higher mortgage payment!
Shannon
All my best,
Danni
You know you are so right, I never even thought about cleaning. But really its only about 1000 sf ft bigger then our house. When you here 650k your probably thinking mansion but its only 2500 sg ft. Our housing market is almost as bad as southern California.
The reasons I would love to live there is becasuse its back in the neighborhood, we are practically on top of the main road. Our house has not been renovated since 1961, and needs tons of work, all new windows, roof, kitchen, bathrooms. When you add that all up and the aggravation of remodeling, its probably not really a bad idea to think about moving.
BUt back to reality we cannot afford a new house.
Shannon
Hi Shannon,
When we bought our first home, the bank make it clear that dh (or the person that brings in the most money)must be employed at his job for at least 1 year. So maybe even if your dh got a new job~ they would fear loaning to him.
We make around $70K a year combined and I cannot even imagine how we could pay $650K mortgage! Even if you make $450K on your home and payoff the balance, putting the rest down on the new one- that's still $400k+ to mortgage. Say the new mortgage is $450K at 6.5% for 30 years~~ the monthly payment would be $2844! OUch! That would be all of my dh's monthly income!
I've been freaking about building a new $145K home ($820/month after down payment) and paying $5-$6k property taxes a year!! It's amazing how home costs vary thru the country!!
I would be strong(but nice) with dh if you are against it. If you know you would be a worried mess with that payment(which it sounds like you would be from your post)- and other costs associated with the home- and other stuff that will always come up- it's just not worth it to have that debt.
Good luck with dh, I know mine gets that "I want it!" bug too. (Right now he's building a go cart for dd) I didn't even fight him on that because it could have been something more expensive.........
Nicki;)
I told my husband that we can move only if he comes up with $200k in cash, that would cover the difference in the home prices and we would still have the same mortgage payment.
BTW - I am sure you can handle $145k on a $70k salary. We pay $1600 a month now on a $50k salary.
I am definately envious of what other people pay in other parts of the country for real estate. And its like instantly when I say I could sell my house for $400k, people on the internet say sell the house and downsize to something affordable. Like what? My house is only a 1500 sg ft fixer upper! Townhouses here are selling For $200k-$300K. Even this $650k house is only 2600 sg ft of living space. Its not a huge mansion by any stretch.
Shannon
I don't know how they base the property tax in your area, but mine is based on this formula:
The amount of real estate tax you pay each year is based on the city's tax appraisal of your property. So, the formula is:
Yearly Real Estate Taxes = Assessment X Tax Rate
The real estate tax rate is set by City Council. The real estate taxes for the Fiscal Year 2005 (July 1st, 2004 - June 30th,2005) are fixed at the following rates:
The General Tax District uses the rate of %1.1964, which equates to $1.1964 per $100 in value. For example, a house appraised at $100,000 would have an annual tax of $1,196.40 represented by the $100,000 X 0.01964 formula.
So what the house sells for and what the city appraises its value as are often 2 different things.
My condo sells for $150,000+ but the city appraised price is around $91,000 (thank god)
So in the best case scenario based on my city's formula - let's say this house your H wants has a city appraised value of $600,000. The annual propery tax would be:
$11,784 on top of the mortgage. I guess that would be rolled into the mortgage, but that's nearly $1000 a month. As the home values increase, the city appraised prices increase also and your mortgage payments will also increase each year to take into account of this.
Just more stuff to remind your H. Tell him it's great to have dreams but that's why they call them dreams. How house poor is enough? Also lenders like to see a consistent work history, a short amount of time on a job is seen as a risk and therefore can increase the interest rate of the loan. Also they will take W2s from a couple of years of work, and then see what the average earning is. So if your husband say makes 60K now and then makes 120k the following year - his average salary will be seen as 90k. Any lender who lends to you - be very suspicious.
Maybe you can take a look at the house and see what it is you like about it that you can do with your own home. If you don't have a pond currently maybe you can put your own in.
yes we have a similiar formula, this $650 house is assessed at $290 & mine is assessed at $200. Not a heck of a lot of difference.
It would be cheaper for us to buy the dream home, then attempt to change our house into a dream home. But regardless this is not something we are serioulsy contemplating.
Just to note that anyone that has bought a house in this region unless they won the lotto, is house poor. This $650k (still only 2600sgft) house 4 years ago was only worth $200k. We have a had a huge increase in property values!
Shannon
My area is right there with you! Wow you're lucky that the appraised value is so much lower than the selling price. They made sure in my area they caught up quick with the assessed value and the selling price - typical! The assessed value of my condo is now more than I bought it for.
The house prices are just crazy at the moment. I always joke that I couldn't afford my own condo on my salary. My condo doubled in value in 2 years. It's great to see the rise in values, but not when tax time comes! I never expected this realty rush that happened, but the lowered interest rates made everyone think they needed to buy somewhere or they should buy some investment properties with the equity that was now built in their homes. It's made for a crazy housing market.
We had some developers getting ready to build some more condos over looking a road, the prices for them were going to be $795,000 and up. Can you believe that? And I don't live in a big city area. I just want to know who are the people with this money - because the salaries here are now lower than the cost of living. This property bubble is going to burst - just when?
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