Random Mortgage question
Find a Conversation
| Wed, 06-07-2006 - 3:14pm |
So, I am no where near ready to buy a home around here but posting that a "starter" home around here would be about $300,000 on the what I WISH I spend money on post got me thinking...I have no idea what kind of salary could afford that. And how do you even figure out what you CAN afford when you factor in debt?
I was thinking that my bf and I make about $100k combined, but we both have student loans and debt. (And obvioulsy we would do ALOT better living together and sharing expenses but I don't want a home with him unless we are married, but i just started to get curious. We both feel broke on our own lol) .
I don't want too much home at all - I would rather have a smaller place with money left to eat out and go out in the city if possible and of course, get of of the debt hole but its super expensive here. And I am sure expenses I never dreamed about will come up. A townhome would be $200k and a home home would be alot more. We both have good vehicles so I would want to get rid of one of them and be a one car unit. I have no idea the first thing about mortagages...at all. And this is the first time I've thought about marriage and I am 30.


Pages
The best way to get an idea is go to a real estate website such as www.realtor.com and look for homes in your area. then you can go to www.dinkytown.net and use the calculator link to "mortgage calc" and you can input your variables such as total home price, interest rate on loan, and down payment. You can also run in the reverse way and put in how much you could put towards a monthly payment and it will give you a total home price.
Hope this helps!
Remember, while a Townhouse may be cheaper you will have monthly assessments that can get steep(around here they can be up to $400 a month) and they can go up yearly if the association has a need.
Not to lure you away from TH because we own one and love it but it was a lesson to us.
When we bought our house 2 years ago we were told its all in who you deal with. Different compaines will want different things. We went thru a mortgage broker to find something right for us. We ended up with a company who made a deal with her that she would give them $1 million more dollars of business in the next year if they approved us. We were a hard case tho. I credit was ok to get a loan but our debt to income was horrible. Because my income is non verifiable we had to go just off of dh's income. So with our van payment and our house it puts us at a 51% debt to income ratio every month....ALOT higher than they like to have, but understood we were a hard case.
We were always told that aprox 3 times your yearly salary is what you can afford. Or 33% of your monthly income.
I am sure things have changed in the last 2 years....GOOD LUCK!
I just wanted to say sticking with a payment 25% of your net income could be a pretty conservative number. I am not one to advocate being house poor but I also hate to see people waiting any longer than necessary to get themselves in the housing market. Renting is just such a money pit for most people. I would use 25-30% of your gross for an upper limit and I would also warn against buying something you know is inadequate (in size or quality) with the thought that you'll upgrade sooner rather than later. It is very expensive to sell property so unless it is really necessary, you want to hold property as long as possible. If you buy something you know isn't going to work in the long run to stay to that conservative payment amount, it might cost you more in the long run to upgrade when your salary increases. Of course, everyone has their own issues and comfort levels. If you know your job is always somewhat dicey or you have a real low tolerance for financial stress, you might want to move more towards the very conservative numbers but if you have a stable job that you can expect reasonable raises in salary over the next few years, I think that a mortgage is one place to stretch your limits because soon, it won't be a stretch at all.
Peg
Pages