Gonna build a house for $260k around August. Expected income for me/wife is 100-130k depending on a couple of factors. Assuming we can put $52k down (20%), is this a doable mortgage? Depending on taxes/insurance, the mortgage is ~25% of our gross which is acceptable, but am looking for practical advice on people who have paid this percentage of their budget on a house before. The house is really more than we need (3600 square feet in a primo community/school district). Should we find a cheaper residence or go for the gusto? We have plenty of money going into investments including other real estate properties, so saving is not a problem. Man never made this kind of purchase before.
Possibly buying a new house, but worried about income... Now with pics and floorplan
- Thread starter wyvrn
- Start date
IMHO, you should see if you can find a slightly cheaper house. Some people say not to let your PITI (principal, interest, taxes, insurance) exceed about 25% of your take home pay.
I have seen a few of friends who thought that number was low, and now they are strapped financially because of some minor financial bump, that left them paying catch-up after getting even a little behind.
Our mortgage payment is about 30% of our base (take home) paychecks (we get yearly bonuses) if it werent for the bonuses, we would never make it during the tight months of the year.
Own your house, dont let it own you.
I have seen a few of friends who thought that number was low, and now they are strapped financially because of some minor financial bump, that left them paying catch-up after getting even a little behind.
Our mortgage payment is about 30% of our base (take home) paychecks (we get yearly bonuses) if it werent for the bonuses, we would never make it during the tight months of the year.
Own your house, dont let it own you.
StageLeft
No Lifer
- Sep 29, 2000
- 70,150
- 5
- 0
Depends on bedrooms. I've found, as have most people in the world, that you quickly get accustomed to the size of a house and you'll probably always want bigger. You're taking out a $200k mortgage on a $100k-130k income. Assuming that you have no credit card debt or other ridiculous debts like a $40k car or two, then you can easily cover this mortgage, as well as put away money into investments and school. You're looking at no more than $1300/month, and your take home is $6k+/month, so you could easily hack this. You'll be living in that neighborhood with people making much less, believe me!
Oh, I didn't account for taxes. Ours are very low, so yours may raise that payment a lot.
Of course, make sure that you won't start drowning should one of you lose your job or your wife gets pregnant and needs to take 6 months off work, and then do the same a couple of years down the road. If in doubt it is generally best to take the more secure approach. There is always time to get a big house, and it's better safe than sorry
Oh, I didn't account for taxes. Ours are very low, so yours may raise that payment a lot.
Of course, make sure that you won't start drowning should one of you lose your job or your wife gets pregnant and needs to take 6 months off work, and then do the same a couple of years down the road. If in doubt it is generally best to take the more secure approach. There is always time to get a big house, and it's better safe than sorry
Do you currently own a home? You must figure extra expenses that go with home ownership ie., taxes, maintenance, water, sewer, insurance etc.
I personally prefer to live well within my means, it is very comforting to me. Also, I enjoy the extra money for "toys" that I really enjoy more than a house. Com'on... how much "fun" can you have with a big nice house?
I personally prefer to live well within my means, it is very comforting to me. Also, I enjoy the extra money for "toys" that I really enjoy more than a house. Com'on... how much "fun" can you have with a big nice house?
260k mortgage on 42k of income here. I'd make it fine on just my day job income although it'd be a little tight. I only put down 26k.
If you need I can post figures I ran on a spreadsheet including all interest deductions before buying. I have no car payments, no debt no nothing. I also have my parents backing me if something goes wrong they have enough in their retirement accounts to cover me for awhile so I didn't have to worry about running into problems. I looked at it as more of an investment than anything.
Oh yeah, and I had ebay as a backup where I make about 35k. I wanted to make sure I could afford it on only my normal income so I don't spend any of my ebay income except for the occassional toy. I also have a roommate who pays about 600 a month for rent and utilities.
Oh yeah, it was also my parents who encouraged me to extend myself. I had signed a contract on a house in an area that wasn't nearly as nice for about 220k but they liked the other area so much more that I'd get home from work and my dad would have spreadsheets of figures ready for me trying to convince me that I could do it and that if I couldn't they had plenty to help me out.
260k house. It's technically not only 42k as I make a lot on ebay but I really only make 42k at my day job. When I applied for the loan I didn't even state my ebay income. Of course my mom cosigned.
But I make sure I can pay for everything I spend a month on just my base income. All my ebay income is reinvested in more merchandise or thrown in the stock market. Keep in mind I save almost 0 for emergencies of my base salary and if my car ever died I'd probably have problems. Hopefully it doesn't die anytime because it's only got 60k miles on it.
How stable is your job and hers? You expect her to keep on working, even after kids start to arrive?
My wife's been harping for years to buy a bigger, better house. Lost my 'good' job about 18 months ago, and current work is really sporadic. I'm SO glad we didn't strap ourselves to a huge mortgage a few years ago, like she wanted to. I'd be fvcking screwed right now, if we had!
My wife's been harping for years to buy a bigger, better house. Lost my 'good' job about 18 months ago, and current work is really sporadic. I'm SO glad we didn't strap ourselves to a huge mortgage a few years ago, like she wanted to. I'd be fvcking screwed right now, if we had!
We have a 160K mortgage, 21K down 2.5 years ago with 75K income. We "splurged" on this house, more for the better schools and more space for the kids. It turned out to be quite an investment, at least for Oklahoma, 30K appreciation. The home appreciated quite a bit. Being in Texas, you should be in good shape as oil prices stay high and tech companies slowly comes back. That TX income tax is a real killer too
My wife works in the healthcare field and her position is in big demand, so shouldn't be a problem there. Plus the job where she works is considered one of the hardest and most sought after in her field. I will probably not have that job security though. I will be working in business/IS which is subject to market fluctuations. However I am usually a fave of my bosses because I work hard.
We have owned before. We have a new car loan ~$20k and we have significant student loans which are consolidated at 4%. We have a daughter and will likely have another in 2-3 years, so we want this to be the place where they grow up. I really don't want to move into another house in 5 years due to space issues.
The house design is phenomenal. It is beautifully sculpted and has a nice gameroom and media room. The builder has won several awards in the last couple of years. The area is primo for schools and safe crime wise. Such a great place to live.
Even though TX doesn't have an income tax we more than make up for it in property taxes, believe you me!
We have owned before. We have a new car loan ~$20k and we have significant student loans which are consolidated at 4%. We have a daughter and will likely have another in 2-3 years, so we want this to be the place where they grow up. I really don't want to move into another house in 5 years due to space issues.
The house design is phenomenal. It is beautifully sculpted and has a nice gameroom and media room. The builder has won several awards in the last couple of years. The area is primo for schools and safe crime wise. Such a great place to live.
Even though TX doesn't have an income tax we more than make up for it in property taxes, believe you me!
Find out how much your taxes are and when the last assessment was made.
I just bought a place and they jacked up my property tax 30%! The assessor told me the city hadn't done an assessment in 15 years and they decided to do it now 6 months after I bought my place. This really sucks but there is nothing I can do about it.
I just bought a place and they jacked up my property tax 30%! The assessor told me the city hadn't done an assessment in 15 years and they decided to do it now 6 months after I bought my place. This really sucks but there is nothing I can do about it.
FeathersMcGraw
Diamond Member
- Oct 17, 2001
- 4,041
- 1
- 0
Don't get caught buying more house than you need. You're just going to wind up spending more at heating/maintaining/furnishing it.
Although it might not necessarily be bad to start higher on the scale if you're planning on starting/expanding your family in the near future.
Although it might not necessarily be bad to start higher on the scale if you're planning on starting/expanding your family in the near future.
A $210k mortgage on $100k a year sounds very reasonable to me. Of course my wife and I have similar income and $260k here will buy a 1000sq ft condo. We'll probably end up with a mortgage around $280k or so in a year on this income.
You have absolutely nothing to worry about. Additional things to keep in mind about your house - your mortgage payments will stay constant throughout the life of your mortgage (well, except for the property tax portion of it). Your job income will hopefully continue to go up. So while money might seem iffy at first (even though with your numbers you can easily afford that house), within 5 or 6 years you'll be making more money so the mortgage payments will be even easier.
I'm on my 2nd house now and to be honest, I wish I had bought an even nicer house. I was hesitant to spend any more money for fear of financial problems, but now I've gotten a few raises and will probably have it paid off mega-early and really don't want to move again. I could have afforded a nicer one at the time, but I wanted to play it 'safe'. Its still a nice/big home, but I should have gone the next step up and gotten something nicer.
I'm on my 2nd house now and to be honest, I wish I had bought an even nicer house. I was hesitant to spend any more money for fear of financial problems, but now I've gotten a few raises and will probably have it paid off mega-early and really don't want to move again. I could have afforded a nicer one at the time, but I wanted to play it 'safe'. Its still a nice/big home, but I should have gone the next step up and gotten something nicer.
Jeraden,
That is how I feel. I don't want to under-buy since my wife and I have waited so long to buy our home. We currently live with family (ugh), and space is a huge issue right now.
Looking at the numbers, I think we can afford the house as long as we continue our tendency to save a significant portion of our budget in case something happens to either one of us. I never thought I would be able to live in this kind of place and I am having trouble wrapping my mind around the fact it's almost a reality. The potential responsibility is also scary, but I am sure we will be fine. I have always played it safe financially, but I want us to reward ourselves for our diligence, else what is it worth?
As far as taxes go, it's 2.8% which boils down to about 607 a month. They basically have the best school system in the area, so imo being a parent the tax rate is worth it. The city isn't expected to raise taxes any time soon because there are ready alternatives. One booming 30-something city nearby has a tax rate of 2.1%, very attractive schools, and is exptected to get rail service to downtown Dallas in the next year or so. There is a good mix of choices in Dallas area thankfully so we shouldn't be held hostage tax-wise.
I still cannot believe we are about to do this. So unlike me and my wife which I think is exactly why we should do it!
That is how I feel. I don't want to under-buy since my wife and I have waited so long to buy our home. We currently live with family (ugh), and space is a huge issue right now.
Looking at the numbers, I think we can afford the house as long as we continue our tendency to save a significant portion of our budget in case something happens to either one of us. I never thought I would be able to live in this kind of place and I am having trouble wrapping my mind around the fact it's almost a reality. The potential responsibility is also scary, but I am sure we will be fine. I have always played it safe financially, but I want us to reward ourselves for our diligence, else what is it worth?
As far as taxes go, it's 2.8% which boils down to about 607 a month. They basically have the best school system in the area, so imo being a parent the tax rate is worth it. The city isn't expected to raise taxes any time soon because there are ready alternatives. One booming 30-something city nearby has a tax rate of 2.1%, very attractive schools, and is exptected to get rail service to downtown Dallas in the next year or so. There is a good mix of choices in Dallas area thankfully so we shouldn't be held hostage tax-wise.
I still cannot believe we are about to do this. So unlike me and my wife which I think is exactly why we should do it!
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