How much house to buy?

[dxkj]

We have been looking at houses in the Milwaukee area for a few weeks and we started looking down at 130-150k, and we looked a few in that price range and was fairly dissapointed. Then we looked at a few in the 160-175k range and found more options but nothing we really liked. The realtor suggested we also look from 175-200k


My income is 51k a year, and my wife will be pulling in around 15k a year (while at grad school)

Is 200k too much house to saddle ourselves with at this time? We have almost 35k in savings, and will probably do an 80 10 10 loan if we get a 200k house, and pay off the piggy loan asap (rates would be 5.5 for 80% and 6.5 for 10% )

We are still looking so we might find a perfect house for much less, so Im hoping

any thoughts?

 

[DaTT]

Depends on your spending habits really.....talk to the bank and find out what your monthly's would be and then you decide if you can afford it.

 

[FoBoT]

200K would be pushing it

but if you have plenty of savings and your job outlook is stable, you should be ok

unless you like to buy lots of new fancy cars all the time, then you should probably lower it back down

 

[dquan97]

Assuming that your spending habits are conservative, $200K should be affordable.

 

[dxkj]

Originally posted by: DaTT
Depends on your spending habits really.....talk to the bank and find out what your monthly's would be and then you decide if you can afford it.

we got approved for up to 275k by a few lenders.


The monthly on a 200k house would be around 1200 + property tax

Right now we are paying 800 in rent

 

[dxkj]

Originally posted by: dquan97
Assuming that your spending habits are conservative, $200K should be affordable.

We are very good with money and don't spend much very often. We usually put back about 1500 a month into a savings account as well as retirement savings.


Ive always wanted to do the first house I got on a 15 yr plan instead.... that would put payments on 200k house closer to 1500-1600

 

[iroast]

go with 5.5 @ 30 yr fixed if you're not sure how long you're going to stay in your new home. otherwise, go for 5/1 arm at 4.5. on average, people move out after 7 years. check out bankrate.com and be sure to shop around. you can haggle for better rates and or various fees.

 

[nakedfrog]

I make right about what you make, and the woman's income is variable but not over 15k per year... I just settled for a house for $77k
It works, it didn't have to be the perfect house because at most, I'll be there 10 years. Probably more like 5, with any luck. To have my perfect house, I'm going to have to have it built (since there's very few geodesic dome houses on the market, especially in my area).

 

[iroast]

15 yrs would be stretching the monthly payments.
lenders always approve more money then you need.

 

[dxkj]

Originally posted by: iroast
go with 5.5 @ 30 yr fixed if you're not sure how long you're going to stay in your new home. otherwise, go for 5/1 arm at 4.5. on average, people move out after 7 years. check out bankrate.com and be sure to shop around. you can haggle for better rates and or various fees.

Yeah those rates I listed are the lowest ive found so far...


Im thinking if we get more house (200k) we might do a fixed 30yrs, but if we get less house (150k) we might go with an ARM since we are more likely to upgrade in 5 years even if we stay in the same area.

 

[dxkj]

Originally posted by: nakedfrog
I make right about what you make, and the woman's income is variable but not over 15k per year... I just settled for a house for $77k
It works, it didn't have to be the perfect house because at most, I'll be there 10 years. Probably more like 5, with any luck. To have my perfect house, I'm going to have to have it built (since there's very few geodesic dome houses on the market, especially in my area).

hehehe... well, there arent any houses that we could live in around here for 77k.... maybe in a really really bad neighborhood.

 

[dxkj]

Originally posted by: nakedfrog
I make right about what you make, and the woman's income is variable but not over 15k per year... I just settled for a house for $77k
It works, it didn't have to be the perfect house because at most, I'll be there 10 years. Probably more like 5, with any luck. To have my perfect house, I'm going to have to have it built (since there's very few geodesic dome houses on the market, especially in my area).

Are you Bukminster fuller?

 

[iamwiz82]

We make just a bit more than you and just bought a house for $176,000. We had $13k for a downpayment, but most of that went towards closing costs for FHA and the title company. I'd say $200,000 is doable with your downpayment, but I think it will depend heavily on taxes.

 

[dxkj]

Originally posted by: iamwiz82
We make just a bit more than you and just bought a house for $176,000. We had $13k for a downpayment, but most of that went towards closing costs for FHA and the title company. I'd say $200,000 is doable with your downpayment, but I think it will depend heavily on taxes.

Taxes are sick... about 2%, so 3600-4800 a year (300-400 a month) no kids, and no kids planned for a while either so that cuts us some slack

 

[iamwiz82]

Originally posted by: dxkj

Originally posted by: iamwiz82
We make just a bit more than you and just bought a house for $176,000. We had $13k for a downpayment, but most of that went towards closing costs for FHA and the title company. I'd say $200,000 is doable with your downpayment, but I think it will depend heavily on taxes.

Taxes are sick... about 2%, so 3600-4800 a year (300-400 a month) no kids, and no kids planned for a while either so that cuts us some slack

Woah! I thought I was being taxed terribly at $200/mo! :Q At least it's a write-off

 

[gshock888]

wow 200k house. my 1 bedroom apartment in queens nyc is 150 and i added 20 more for renovations. this is one sad city.

 

[dxkj]

Originally posted by: iamwiz82

Originally posted by: dxkj

Originally posted by: iamwiz82
We make just a bit more than you and just bought a house for $176,000. We had $13k for a downpayment, but most of that went towards closing costs for FHA and the title company. I'd say $200,000 is doable with your downpayment, but I think it will depend heavily on taxes.

Taxes are sick... about 2%, so 3600-4800 a year (300-400 a month) no kids, and no kids planned for a while either so that cuts us some slack

Woah! I thought I was being taxed terribly at $200/mo! :Q At least it's a write-off

yeah, what will I get back on that

 

[allisolm]

$1200 plus $300-$400 (taxes) plus insurance (don't know how much that is for your area) plus utilities = $1700/1900 monthly. Homeowner's insurance is a lot more than renter's and usually utilities are, too. Just remember that's $900-$1100 MORE than you're currently paying. Not saying you can't do it, just want you to be aware of the costs up front. Good luck!

 

[Budmantom]

Do you have any fixed bills and how much are you putting down?


Tom

 

[mugs]

Originally posted by: dxkj

Originally posted by: dquan97
Assuming that your spending habits are conservative, $200K should be affordable.

We are very good with money and don't spend much very often. We usually put back about 1500 a month into a savings account as well as retirement savings.


Ive always wanted to do the first house I got on a 15 yr plan instead.... that would put payments on 200k house closer to 1500-1600

Eh, I wouldn't do the 15 year mortgage, it would not be difficult to beat 5.5% with other long-term investments.

 

[iamwiz82]

Originally posted by: allisolm
$1200 plus $300-$400 (taxes) plus insurance (don't know how much that is for your area) plus utilities = $1700/1900 monthly. Homeowner's insurance is a lot more than renter's and usually utilities are, too. Just remember that's $900-$1100 MORE than you're currently paying. Not saying you can't do it, just want you to be aware of the costs up front. Good luck!

Our homeowners ins. is $600/year. Combine that with the fact that our auto policy went down, I think we came clsoe to breaking even versus our renter's policy.

 

[Rudee]

Overall monthly costs are going to be quite a bit more then what you are currently paying. If you think you can keep employed over the years and make the payments and associated housing costs, the you could possibly pull this off. I wouldn't recommend you be "house poor" like many people and have very little left for anything else in life, like vacations, saving for retirement. Maybe purchase a less expensive home and put the rest towards retirement savings. Too many people get in far over their head when it comes to housing costs and end up having nothing to retire on, and are forced to work well into their late 60's or 70's.

 

[dxkj]

Originally posted by: Budmantom
Do you have any fixed bills and how much are you putting down?


Tom

Fixed bills:

293 for a car payment
150 for student loan



putting down between 15-25k probably

 

[dxkj]

http://www.realtor.com/Prop/1045133356


hrm thats a dang nice looking condo... i love the layout.

 

[Scarpozzi]

Location is always the key....buy your house based on where it is and you'll be able to resell quickly and easily or rent it out if you decide it's not for you.

Aside from that, you just need to figure out what your expenses are (car payments, credit card payments, loan payments, utilities for the new house, etc) and deduct that from what you bring home. Don't factor your wife's income into the equation because you don't want to have to rely on it. Go for a house that you can get into comfortably without having to worry about making that payment every month. I'd probably stick to the $130k to $150k range or even below if you can for a couple of years if this is a first house purchase and move up in 3-5 years. Trust me, you don't want to jump in too deep and suffer from the interest rates you'll be paying if you get laid off or she can't find work.