is 40k/year enough to buy a 160-210k house? EDIT 130k?

[zixxer]

I've tried these mortgae calculators but they don't seem to tell me much.

I have a bike payment that's about $200 a month or so, and insurance on the bike is $150 a month. car is paid off, and insurance on it is like $180 every 6 mo. so negligible.


If I absolutely have to I can sell the bike and buy a cheaper one, but I'd rather not.

By the time I would be buying july-ish of next year, I'd have a solid 10k saved up for a down payment.

My take home pay is about $2600 a month. I also do work on the side that would add ~$500 or more,

EDIT again:

I have 0 credit card debt. I owe about $7k on a motorcycle and that's it.

EDIT again again:

I also am in the position to have a roommate if needed. I am also very good at eating cheaply

EDIT again again again:

Okay... after reading the thread through and calling a couple realtors... I think I'm going to start saving as much as possible. The lease on my apt is up jan 1. I'm going to sign a 6mo lease and begin looking for a 'fixer upper' until june1..

I very well may end up moving.. particularly early 2007. I shouldn't jump into a house before I know I'll be here for at least 5 years (so says the realtor..)




EDIT::::::::::::::::::::::::::::::::::::

Okay... found a nice house close by for $130k.. owners got divorced and need to sell quick... house was built in 1987... 2 car garage.. gas heat, gas stove, 3br 2 bath in a nice area close to work (5 miles...) most houses around there sell for 180k+ .

Now, I found this listing on the local papers online website... can I just call the realtor who posted it, or do i need to find my own realtor?

 

[Kelemvor]

Might want to contact someone in the Mortgage office at a local bank and ask them. There's a lot more to it but they can get you info pretty quickly.

 

[AdamSnow]

Depends on what your down payment is...

Go call a bank - they will tell you.

 

[Stuxnet]

160 - 210 is a pretty big range.

There are plenty of online calculators that can tell you "how much house" you can afford; just keep in mind that they're very aggressive in what you can afford.

A financial advisor is your best bet.

 

[royaldank]

That would probably be a $1400 - $1800/mo mortgage payment. Youcomfortable with that?

 

[zixxer]

ok i thought there were special mortgage loan places... what about like the places in the mall? they're stores that are supposed to help get you in a house.

will just my normal bank (wachovia) be the way to go?

 

[spidey07]

I think it would be a very bad idea.

 

[royaldank]

You should shop around for the best rate. Credit unions generally have better rates, followed by loan brokers, then banks. Not always the case, so don't hesitate to look at multiple places.

 

[Demon-Xanth]

Yes.

I make a bit less than that, and am looking for a place worth getting for that price range (closest is a 1 bed condo for $217k). A standard loan will get you $175k for $1400/mo. An ARM loan $240k for $1400/mo.

 

[Don Vito Corleone]

I think this would be unwise. If you make that little you might want to consider a condo as a way of getting into the market more affordably.

 

[zixxer]

Originally posted by: Demon-Xanth
Yes.

I make a bit less than that, and am looking for a place worth getting for that price range (closest is a 1 bed condo for $217k). A standard loan will get you $175k for $1400/mo. An ARM loan $240k for $1400/mo.

what is an arm loan?

 

[royaldank]

Adjustable Rate. Depending on the program, the interest rate (and your payment) can change every 1 to 10 years. 3 and 5 year ARMS are very common, especially if you don't think you'll be in the house more than 5 years. Get a lower rate and then sell before it jumps at the 5 year mark.

 

[zixxer]

Originally posted by: DonVito
I think this would be unwise. If you make that little you might want to consider a condo as a way of getting into the market more affordably.

i live northwest of atlanta. condos are not that great of an investment, and neither are townhouses.

 

[AbsolutDealage]

Originally posted by: AdamSnow
Depends on what your down payment is...

Go call a bank - they will tell you.

You can call the bank, but the only one that can really decide whether you can afford it or not is you. A lender will typically lend you more money than you can afford (on your current lifestyle), knowing that you will simply cut corners in order to make the payment every month. If you are willing to sacrifice certain aspects of your lifestyle, then you can borrow as much as you want. Just know that you're bike will most likely be the first thing to go if you can't make the payments month to month.

 

[Pacfanweb]

Payment on 160k will be roughly 1000 a month, give or take, depending on your interest rate. If you get a good one, it'll be under 1 grand.
But add in escrow and it'll still be close to a grand.

The only one who can decide if you can afford it is you. You make close to 800 a week. So your first week is eaten up by the house payment, and a little of the second week. The rest of the second week will eaten up by your 350 for the bike, your car insurance, gas, utilities, etc.

So if you have zero, or at least minimal other debt, such as credit cards and such, you should basically be able to cover your bills with 2 weeks of paychecks.

Wouldn't leave you much room for a car payment in the future or buying anything else on credit, but you should be able to live very comfortably....and I assume you will make more than 40k in the future, so that will take care of the future.

 

[Amused]

Originally posted by: Pacfanweb
Payment on 160k will be roughly 1000 a month, give or take, depending on your interest rate. If you get a good one, it'll be under 1 grand.

When considering a house payment you MUST consider insurance and property taxes.

Depending on where you live, that could add 300-1000 a month on a 200K house.

Then you need to figure the maintenance costs and the price of remodels/landscaping/decorating.

Just because you think you can afford the basic loan payment does NOT mean you can afford the true cost of the house.

At 40K a year, the most I would buy, if you were otherwise debt free, would be 120K.

 

[Mermaidman]

Seems like a stretch.

Have you put aside an emergency fund yet? That would be the first thing to do, then save for a downpayment, or borrow from your family

 

[iamwiz82]

Originally posted by: Pacfanweb
Payment on 160k will be roughly 1000 a month, give or take, depending on your interest rate. If you get a good one, it'll be under 1 grand.
But add in escrow and it'll still be close to a grand.

The only one who can decide if you can afford it is you. You make close to 800 a week. So your first week is eaten up by the house payment, and a little of the second week. The rest of the second week will eaten up by your 350 for the bike, your car insurance, gas, utilities, etc.

So if you have zero, or at least minimal other debt, such as credit cards and such, you should basically be able to cover your bills with 2 weeks of paychecks.

Wouldn't leave you much room for a car payment in the future or buying anything else on credit, but you should be able to live very comfortably....and I assume you will make more than 40k in the future, so that will take care of the future.

$800 a week before taxes, closer to $600 a week after taxes. He'd be burning up half his take home in mortgage, home insurance, and property taxes.

 

[SagaLore]

No. On 40k/year, you should stay below 100k house.

 

[DougK62]

Buying a house that price at only $40k/year salary would be EXTREMELY unwise.

 

[codeyf]

We bought our $192k house when I was making less than 40k. However, we also put ~35k down, and because my wife was a BofA employee at the time, they paid $5k towards closing costs. We overpay towards our principal now, and pay an even $1400/mo.

We've refi'd once for a lower rate, and took out a 2nd to pay off our cars and smaller-balanced CC's. Between 1st and 2nd we pay $1600/mo.

Things are definitely "tight", but well worth it, and over the past 5 years the value of our home has gone up *significantly*

 

[dullard]

If I were you, I'd have a definate cap at $160 and really consider something in the $130s. That way, you'll have plenty of money in case you want to have some fun, furnish your house, or get a new ___ WHEN the old one blows (fill in the blank with lots of items).

$150/mo for bike insurance seems like a huge amount of money. With a 6% interest rate, that $150/mo will buy you $30k more house. At 7% interest, that $150/mo would buy you $25k more house. (Note: numbers in this paragraph don't consider extra taxes or insurance).

Originally posted by: codeyf
We bought our $192k house when I was making less than 40k. However, we also put ~35k down, and because my wife was a BofA employee at the time, they paid $5k towards closing costs. We overpay towards our principal now, and pay an even $1400/mo.

So you effectively paid for a ~$152k mortgage. That is a lot different than a $192k mortgage. And I bet you didn't have much money for furniture or emergencies. Interest rates are quite important too in this discussion. With another year of rate hikes, Armatron will probably be looking at 7% interest. Note: you didn't mention yours, so it is impossible to compare your situation with Armatron's.

 

[zixxer]

Originally posted by: SagaLore
No. On 40k/year, you should stay below 100k house.

that is absolutely impossible around here. To get a house at that price I'm looking at an hour and a half commute at least to work

 

[Mermaidman]

Originally posted by: codeyf
We bought our $192k house when I was making less than 40k. However, we also put ~35k down, and because my wife was a BofA employee at the time, they paid $5k towards closing costs. . .

Big difference in your situation. What was your COMBINED income? I don't think the OP has a wife.

 

[dxkj]

Originally posted by: armatron
I've tried these mortgae calculators but they don't seem to tell me much.

I have a bike payment that's about $200 a month or so, and insurance on the bike is $150 a month. car is paid off, and insurance on it is like $180 every 6 mo. so negligible.


If I absolutely have to I can sell the bike and buy a cheaper one, but I'd rather not.

By the time I would be buying july-ish of next year, I'd have a solid 10k saved up probably

No...

I make 46k + bonuses, and my wife makes about 10-15k in school, and 150k house, 10% down, plus car payments is pushing it (you want to be able to put money away for later as well as retirement)