This is exactly why our economy is in the dumps

[swbsam]

Originally posted by: spidey07

Originally posted by: Insomniator

Originally posted by: spidey07
I agree it's why we're in so much trouble. Plain financial irresponsibility. That is too much house for that income and he'll be living paycheck to paycheck, no real wealth building and will be just one or two paychecks away from financial ruin, a prisoner of his mortgage. More than half his take home pay for a mortgage paymen, that's just dumb.

Are you 14?

Problem loans are more like people making 50k buying 500k homes, then not being able to make any payments once the easy period ends in a year or so.

Someone making 80k a year in a comfortable job should be able to and can easily afford a 300k house, in any economy.

Do you want the price of houses to come down or are you saying we should all live in trailers?

I'm saying being able to "afford" a certain mortgage payment doesn't mean it's a good idea. That's too much house for that income unless he wants to live paycheck to paycheck. Then again people that justify that much house with that salary already live paycheck to paycheck and that's how they can justify "I can afford it!" because it fits with their "how much do I have to pay a month" attitude.

Now if they guy had saved up 150K and put that as a down payment, then he truly can afford it.

SPIDEY - how much do you make and what's your rent/mortgage?

 

[Regs]

80K a year, christ, what is he a janitor? lol.

 

[blahblah99]

Originally posted by: LuckyTaxi
A coworker making less than $80k ALONE somehow managed to get approved for a $300k house! Wife doesn't work and I know he's VERY frugal. He mustv'e saved a lot of money for a downpayment but buying $3 sweaters and living like a hermit doesn't sound like a life to me.

What's wrong with that? You said he's VERY frugal. If he paid 20% down payment, that leaves a $240k loan, which is about 1200-1500 a month in payments roughly.

Very doable for an $80k salary if you ask me.

Sounds to me like he took advantage of the situation and got a house that's probably worth $400-$600k for $300k.

 

[frostedflakes]

Originally posted by: LS21

Originally posted by: Insomniator

Someone making 80k a year in a comfortable job should be able to and can easily afford a 300k house, in any economy.

2 people, with 80k income, should not be able to afford a 300k , easily or otherwise

Parents built a $300k house, and I think their combined yearly income is only like $50k, lol. Paid off the loan in four years I believe.

If you're frugal and make a large down payment, it's doable.

 

[vi edit]

Just going off the basic assumption of $300k @ 6% that's 1800/mth with no escrow. The one part that isn't included and can vary wildly by location is property taxes. Depending on where this place is, he could be looking at another $5,000+ a year in taxes plus another $1000 in insurance. That puts his payments in the $2300 range.

He at best nets around $4650 after federal and state taxes. That's almost half his net income gone in one bill.

Toss in food. For two people $400 a month is fairly conservative. Down to $1900.

Utilities. Likely $300 or more once you count heat, electricity, water, garbage, phone/internet. Down to $1600.

Health care premiums. $200 a month is pretty conservative for a family. Down to $1400.

Car payment/maintenance & Vehcile registrations. I'll assume something modest and call this $100 a month. $1300.

Household goods & repairs. Who knows. $50. $1250.

Non-durable goods like clothing. Two people - $50. $1200.

And you haven't even gotten to retirement costs for two people, any vacations, frivilous expenses, kids, pets. Christmast/birthday gifts for people. Ect.

Yes, you can make payments on it. But unless you live like a freakping pauper that's a dangerously high mortgage that can easily leave you high and dry on any wealth accumulation.

 

[frostedflakes]

You assume he put nothing down. Some people actually *gasp* save up for a large down payment before buying a house. Or if he already had a house and sold that, the money from it could have been used to pay down a significant portion of the new house.

 

[mrSHEiK124]

Originally posted by: frostedflakes
You assume he put nothing down. Some people actually *gasp* save up for a large down payment before buying a house. Or if he already had a house and sold that, the money from it could have been used to pay down a significant portion of the new house.

Seriously, it's no wonder our economy is in the shitter when people have to automatically assume the average American is financially incompetent.

 

[tfcmasta97]

This is exactly why your economy is in the dumps .

Retards that think saving and responsible spending and worthy investments are in itself wrong.

You know, the fucking retards ruining things for everyone else.

 

[waffleironhead]

Originally posted by: vi edit
Just going off the basic assumption of $300k @ 6% that's 1800/mth with no escrow. The one part that isn't included and can vary wildly by location is property taxes. Depending on where this place is, he could be looking at another $5,000+ a year in taxes plus another $1000 in insurance. That puts his payments in the $2300 range.

He at best nets around $4650 after federal and state taxes. That's almost half his net income gone in one bill.

Toss in food. For two people $400 a month is fairly conservative. Down to $1900.

Utilities. Likely $300 or more once you count heat, electricity, water, garbage, phone/internet. Down to $1600.

Health care premiums. $200 a month is pretty conservative for a family. Down to $1400.

Car payment/maintenance & Vehcile registrations. I'll assume something modest and call this $100 a month. $1300.

Household goods & repairs. Who knows. $50. $1250.

Non-durable goods like clothing. Two people - $50. $1200.

And you haven't even gotten to retirement costs for two people, any vacations, frivilous expenses, kids, pets. Christmast/birthday gifts for people. Ect.

Yes, you can make payments on it. But unless you live like a freakping pauper that's a dangerously high mortgage that can easily leave you high and dry on any wealth accumulation.

Good numbers, thanks for going thru that. I for one would love to have a 1200/month buffer after living expense.
For a large majority of the population, the home is their wealth accumulation.

 

[PlasmaBomb]

I surprised no one mentioned this yet either -

With the economy the way it is, just because the house is on the market at $300k doesn't mean the guy offered that amount...

Who is the OP to know all their finances anyway? Maybe the wife does bring in some money or the husband has a side project? Maybe his family were frugal too and left him some inheritance a while back?

 

[vi edit]

Originally posted by: waffleironhead
[
Good numbers, thanks for going thru that. I for one would love to have a 1200/month buffer after living expense.
For a large majority of the population, the home is their wealth accumulation.

I'm just simply putting some numbers out on the table and not making blanket assumptiosn one way or the other.

If you toss in even basic savings of $350 a month to cover your IRA contribution you are down to less than $900. Have any kids and save for college then you are down even lower.

And that's with a really modest $100 a month factored in for car expenses. Now you really are starting to scrape the bottom if you want a newer car and the insurance costs associated with it.

Or you want to save up for a vacation, or a decent tv, or any improvments on the home. Ect.

You can do it. But it can get pretty freaking tight.

 

[maziwanka]

Originally posted by: krylon
Maybe he likes being a hermit. What's it to you?

yea seriously