Mortgage question

[nakedfrog]

Originally posted by: Ocguy31

Originally posted by: Deeko
Being 24 and not owning a house, I don't actually know, but isn't the traditional logic that your mortgage shouldn't be more than 1/4 of your monthly take home pay? Basically a week's paycheck?

No.

Yes.
Sorry to be the one to tell you this, but you're wrong.

 

[Noirish]

how much is the house and loan?

 

[OCGuy]

Originally posted by: nakedfrog

Originally posted by: Ocguy31

Originally posted by: Deeko
Being 24 and not owning a house, I don't actually know, but isn't the traditional logic that your mortgage shouldn't be more than 1/4 of your monthly take home pay? Basically a week's paycheck?

No.

Yes.
Sorry to be the one to tell you this, but you're wrong.

Ok there 😉

I bet you spent 3 months salary on an engagement ring, and think that chicken soup kills the common cold.

What other random old wive's tales do you apply to everyone?



Some people can handle 55-65% DTI, some people shouldnt have 20%. It varies by person. Trying to make a "golden rule" is rediculous.

 

[Deeko]

Originally posted by: Ocguy31

Originally posted by: nakedfrog

Originally posted by: Ocguy31

Originally posted by: Deeko
Being 24 and not owning a house, I don't actually know, but isn't the traditional logic that your mortgage shouldn't be more than 1/4 of your monthly take home pay? Basically a week's paycheck?

No.

Yes.
Sorry to be the one to tell you this, but you're wrong.

Ok there 😉

I bet you spent 3 months salary on an engagement ring, and think that chicken soup kills the common cold.

What other random old wive's tales do you apply to everyone?



Some people can handle 55-65% DTI, some people shouldnt have 20%. It varies by person. Trying to make a "golden rule" is rediculous.

So you're basically not disagreeing with the standard limits, just saying that it doesn't apply to every case?

No shit ya fucking genius :roll:

 

[OCGuy]

Originally posted by: Deeko

Originally posted by: Ocguy31

Originally posted by: nakedfrog

Originally posted by: Ocguy31

Originally posted by: Deeko
Being 24 and not owning a house, I don't actually know, but isn't the traditional logic that your mortgage shouldn't be more than 1/4 of your monthly take home pay? Basically a week's paycheck?

No.

Yes.
Sorry to be the one to tell you this, but you're wrong.

Ok there 😉

I bet you spent 3 months salary on an engagement ring, and think that chicken soup kills the common cold.

What other random old wive's tales do you apply to everyone?



Some people can handle 55-65% DTI, some people shouldnt have 20%. It varies by person. Trying to make a "golden rule" is rediculous.

So you're basically not disagreeing with the standard limits, just saying that it doesn't apply to every case?

No shit ya fucking genius :roll:

Im disagreeing because you pulled the "standard limit" out of your ass.

Everyone says something different. I was pointing out the small-mindedness of believeing yours was some how "correct."

 

[DannyLove]

Google Debt to Income Ratio.
You will find many calculators and or steps on how to do this and apply it to your situation.

You basically want to be within 30-35% DTI to fall within a reasonable affordable living situation.

I just recently bought a house in December, first time buyer, so all this is fresh in my mind. There are many things you won't consider, but being a home owner is costly. I'm talking about beyond the mortgage, insurance and property taxes. I'm referring to bills for the larger sq ft (electricity, gas) your bills will increase from what you currently pay. There is also upkeep, and various other things you 'need' that will eat through your pay check each month.

Please read up on 'how much house can you afford' type artiles and do your research before you even bother moving forward. You'll find a lot of out-dated articles but the concepts still apply. Also, banks also run your debt to income ratio to determine your approval amount, but in all honesty, they'll approve you for anything but you'll be living pay check to pay check.

Good luck

 

[mharr7]

Originally posted by: Noirish
how much is the house and loan?

House is on market for 160k...trying to get it for around 150k If I can.
Down payment is going to be like 14-15k, with the rest ~4800 going to closing costs.

Again these are all estimates. They might not be willing to negotiate at all, we haven't discussed anything with them. Really would depend on how bad they need to get rid of it.

So Loan would be like 135-140 BEST case scenario. If its much more than that, I wouldn't be able to do it anyways, and this won't even be an option.

 

[child of wonder]

Wife and I take home $5k per month and house payment (princ., int., and ins.) is $1,075.

A $2,500 mortgage payment for us would be insane.

 

[mharr7]

Originally posted by: DannyLove
Google Debt to Income Ratio.
You will find many calculators and or steps on how to do this and apply it to your situation.

You basically want to be within 30-35% DTI to fall within a reasonable affordable living situation.

I just recently bought a house in December, first time buyer, so all this is fresh in my mind. There are many things you won't consider, but being a home owner is costly. I'm talking about beyond the mortgage, insurance and property taxes. I'm referring to bills for the larger sq ft (electricity, gas) your bills will increase from what you currently pay. There is also upkeep, and various other things you 'need' that will eat through your pay check each month.

Please read up on 'how much house can you afford' type artiles and do your research before you even bother moving forward. You'll find a lot of out-dated articles but the concepts still apply. Also, banks also run your debt to income ratio to determine your approval amount, but in all honesty, they'll approve you for anything but you'll be living pay check to pay check.

Good luck

Will do. I'm studying for a test right now, but I take a look at it later. I remember looking at some similar things a few months back when I first started looking at condos that were cheaper, and I didn't have a problem. But now that the houses have dropped around here, I really REALLY want a house over a condo. Plus, they just passed some thing that you must have 20% down if you buy a condo, which I don't have. This rule doesn't apply to a house, so I can get away with 10% down.

 

[AnonymouseUser]

Hell no, you aren't making enough for $1000/month mortgage. You will also have to pay taxes, utilities, PMI, insurance, maintenance, food, cable, phone, etc, etc, etc. I was bringing home ~$2000/month, mortgage was ~800/month, and I never had enough money.

 

[Deeko]

Originally posted by: Ocguy31

Im disagreeing because you pulled the "standard limit" out of your ass.

Everyone says something different. I was pointing out the small-mindedness of believeing yours was some how "correct."

Out of my ass, or because I had been told that by someone in the past who I more than likely trust more than you? Some nobody on the internet that makes sweeping disagreements without backing them up?

Of course it varies by situation - but to try to say you can't put a number - or a range of numbers - on what the average person in an average situation can handle is simply untrue.

And on top of that, by not actually backing up your statements, you're basically just being a douche and not being helpful at all. You're actually being detrimental to the discussion.

Thanks for playing, though!

 

[alkemyst]

Originally posted by: Deeko
Being 24 and not owning a house, I don't actually know, but isn't the traditional logic that your mortgage shouldn't be more than 1/4 of your monthly take home pay? Basically a week's paycheck?

28% but that's an older benchmark...at 2000 a month of income though 50% to housing would be extremely excessive and I doubt he'd qualify anyway.

 

[mharr7]

Originally posted by: child of wonder
Wife and I take home $5k per month and house payment (princ., int., and ins.) is $1,075.

A $2,500 mortgage payment for us would be insane.

ya it really sucks, you CANNOT buy a decent house for less than 150-160k here, unless you either A) live in the ghetto and fear for your life every night(not doing)
or B) Buy a run down POS that you have to put a bunch of money into anyways, defeating the purpose because I wouldn't be able to put enough down.....

So that leaves cheap small condos, which again, you need 20% down for a condo now(just passed law)...which I don't have 20% to put down....

I live in Gainesville, FL FYI. The housing market here is soo f-ed up here. An equal house in Valdosta Fl(dad lives there, hour and a half drive away) is about 115-120k, with it being minimum 160k here.

Its crazy.

 

[DannyLove]

Originally posted by: mharr7

Originally posted by: DannyLove
Google Debt to Income Ratio.
You will find many calculators and or steps on how to do this and apply it to your situation.

You basically want to be within 30-35% DTI to fall within a reasonable affordable living situation.

I just recently bought a house in December, first time buyer, so all this is fresh in my mind. There are many things you won't consider, but being a home owner is costly. I'm talking about beyond the mortgage, insurance and property taxes. I'm referring to bills for the larger sq ft (electricity, gas) your bills will increase from what you currently pay. There is also upkeep, and various other things you 'need' that will eat through your pay check each month.

Please read up on 'how much house can you afford' type artiles and do your research before you even bother moving forward. You'll find a lot of out-dated articles but the concepts still apply. Also, banks also run your debt to income ratio to determine your approval amount, but in all honesty, they'll approve you for anything but you'll be living pay check to pay check.

Good luck

Will do. I'm studying for a test right now, but I take a look at it later. I remember looking at some similar things a few months back when I first started looking at condos that were cheaper, and I didn't have a problem. But now that the houses have dropped around here, I really REALLY want a house over a condo. Plus, they just passed some thing that you must have 20% down if you buy a condo, which I don't have. This rule doesn't apply to a house, so I can get away with 10% down.

Anything between 3% and 20% downpayment is a waste. 20%+ means no PMI on your mortgage. FHA loans require only 3% (i think its 3.5% now) with PMI insurance. Unless you are fronting that 20% to rid PMI I don't see a need to front 7% extra on a minimum requirement. When you do the math, that 7% will probably be less than $100 per month you'll be fronting. That extra 7% would be nice to have to purchase new things for the new place.

But please please run your DTI ratio. Rid yourself of all your debts and be sure you know what you are doing. Just because everything is "so cheap" doesn't mean you have to jump in. This is thee biggest purchase of your life, take your time and understand everything that is involved.

 

[nakedfrog]

Originally posted by: Ocguy31

Originally posted by: nakedfrog

Originally posted by: Ocguy31

Originally posted by: Deeko
Being 24 and not owning a house, I don't actually know, but isn't the traditional logic that your mortgage shouldn't be more than 1/4 of your monthly take home pay? Basically a week's paycheck?

No.

Yes.
Sorry to be the one to tell you this, but you're wrong.

Ok there 😉

I bet you spent 3 months salary on an engagement ring, and think that chicken soup kills the common cold.

What other random old wive's tales do you apply to everyone?



Some people can handle 55-65% DTI, some people shouldnt have 20%. It varies by person. Trying to make a "golden rule" is rediculous.

I bet you're a dumbass (I only bet on sure things) 😉
TRADITIONAL LOGIC
Point out where in the posts above yours anyone said anything remotely like you're implying.

 

[mharr7]

Originally posted by: AnonymouseUser
Hell no, you aren't making enough for $1000/month mortgage. You will also have to pay taxes, utilities, PMI, insurance, maintenance, food, cable, phone, etc, etc, etc. I was bringing home ~$2000/month, mortgage was ~800/month, and I never had enough money.

ya the PMI and insurance are included in the payment...but that really doesn't make a big difference when it comes down to it.

Sucks to hear, but this is why I asked, I needed to hear this from other ppl. I love the house, so I keep saying "I can make it work" but i'm not sure thats all that realistic.

 

[OCGuy]

Originally posted by: nakedfrog

I bet you're a dumbass (I only bet on sure things) 😉
TRADITIONAL LOGIC
Point out where in the posts above yours anyone said anything remotely like you're implying.

Originally posted by: Deeko
isn't the traditional logic that your mortgage shouldn't be more than 1/4 of your monthly take home pay? Basically a week's paycheck?

😕


Whatever industry you guys are in, you would react the same way in a thread where people really had no idea. Sorry to sound condescending. I'll stay out of it.

 

[Noirish]

Originally posted by: mharr7

Originally posted by: Noirish
how much is the house and loan?

House is on market for 160k...trying to get it for around 150k If I can.
Down payment is going to be like 14-15k, with the rest ~4800 going to closing costs.

Again these are all estimates. They might not be willing to negotiate at all, we haven't discussed anything with them. Really would depend on how bad they need to get rid of it.

So Loan would be like 135-140 BEST case scenario. If its much more than that, I wouldn't be able to do it anyways, and this won't even be an option.

it may not be a bad idea considering there has been an average of 25-30% drop in home value.
i'll recommend having a 6 months reserve just in case.
also, if you can, cut down on expenses, like 10-20%.

there is tax benefit though, you might be able to get around $300 back per month, which should be sufficient to cover property tax and insurance.
you just have to be VERY financially responsible once you take property.

oh, not to mention, if the $15k home tax credit gets signed, you'll be helped alot.

 

[mharr7]

Originally posted by: Noirish

Originally posted by: mharr7

Originally posted by: Noirish
how much is the house and loan?

House is on market for 160k...trying to get it for around 150k If I can.
Down payment is going to be like 14-15k, with the rest ~4800 going to closing costs.

Again these are all estimates. They might not be willing to negotiate at all, we haven't discussed anything with them. Really would depend on how bad they need to get rid of it.

So Loan would be like 135-140 BEST case scenario. If its much more than that, I wouldn't be able to do it anyways, and this won't even be an option.

it may not be a bad idea considering there has been an average of 25-30% drop in home value.
i'll recommend having a 6 months reserve just in case.
also, if you can, cut down on expenses, like 10-20%.

there is tax benefit though, you might be able to get around $300 back per month, which should be sufficient to cover property tax and insurance.
you just have to be VERY financially responsible once you take property.

Well I've always been financially responsible....I pay off my credit card every month, and make sure I save plenty....which is why I have a good bit of savings now for a down payment. Problem is, if I buy something, there goes the majority of my savings out the window for down payment...and it would be very hard, imo, to build up savings again with an extra 1200+ payment each month.

 

[AnonymouseUser]

Originally posted by: mharr7

Originally posted by: AnonymouseUser
Hell no, you aren't making enough for $1000/month mortgage. You will also have to pay taxes, utilities, PMI, insurance, maintenance, food, cable, phone, etc, etc, etc. I was bringing home ~$2000/month, mortgage was ~800/month, and I never had enough money.

ya the PMI and insurance are included in the payment...but that really doesn't make a big difference when it comes down to it.

Sucks to hear, but this is why I asked, I needed to hear this from other ppl. I love the house, so I keep saying "I can make it work" but i'm not sure thats all that realistic.

You'll never have money to do much of anything, especially maintenance on the house itself. Only reason I was in that situation in the first place was a divorce, but it wasn't bad at all with the ex's paycheck included. That's two mistakes I'll never make again...

 

[Deeko]

Originally posted by: Ocguy31

Originally posted by: Deeko
isn't the traditional logic that your mortgage shouldn't be more than 1/4 of your monthly take home pay? Basically a week's paycheck?

😕


Whatever industry you guys are in, you would react the same way in a thread where people really had no idea. Sorry to sound condescending. I'll stay out of it.

No, not really, considering the thread existed to ask a question and learn, I would try to actually provide context and to be helpful.

 

[mharr7]

BTW, if the 15k tax credit does get passed, does anyone have any idea how long that would be in effect? Or do we have to wait and see what happens with the bill to know anything??

 

[Noirish]

Originally posted by: mharr7
BTW, if the 15k tax credit does get passed, does anyone have any idea how long that would be in effect? Or do we have to wait and see what happens with the bill to know anything??

supposedly, it works for 2009 purchases only, not sure yet how far back they are going to be retroactive for the "enactment" date (whether it be 01/01/2009, bill signed date or some other date). we'll know the final details when it gets passed house and signed by obama.

 

[erub]

Originally posted by: mharr7
BTW, if the 15k tax credit does get passed, does anyone have any idea how long that would be in effect? Or do we have to wait and see what happens with the bill to know anything??

Scheduled for 1 year after the date of signing. I can see it working if you are willing to get a 3rd roomate (you said its a 3/2), to pay $400 (call it 500 and include utilities/cable/internetfor them). But are you ready to be a real landlord to a stranger?

 

[squirrel dog]

30% is high , 50% is what crushed the housing industry.One misstep and you will be behind on your mortage,two or more and you default.25% is as high as you need to go.