I voted 100-200k. We make almost $200k and our $190k house is a bit more than I want to be paying.
I'm on board with this. $200K is about as high as I'd go with a 20% DP. We buy based on the lowest income (DH & I are pretty even, though) so that means at best the lowest salary in a $150K in HH income is $75K. That gives you $4K/mo net before savings or anything. By the time you add in taxes and everything, your monthly payments around $1K.
Yes, we're really conservative, but honestly it helps us keep our sanity. It's much easier to deal with a stressful job environment when I know I don't technically have to show up every day just in order to keep a roof over our heads.
We bought a low-mid 500s house in MA when we were making approx that income and it was doable. We knew our salaries were likely to rise and were comfortable scrimping on almost everything else for a year or two. We had no other debt and no kids yet plus no expensive hobbies. We didn't buy new clothes nor eat out much or vacation but we had just gotten married and had a nice honeymoon a few months prior so we didn't feel too deprived.
You think more than ~1,200 would be too much? What else do you spend your money on?
Yes, I want to be able to put 15% into retirement, a big chunk to savings, day care, saving for cars, not having to worry about what we spend on groceries, utilities, travel to visit family and eating out.
Our home is b/w $200-$250K, and while I know we could have gotten a bigger home, we are able to do exactly this (18% into retirement), as well as budgeting for 2 cars so we never have a car payment, and I also love to shop for nice clothes. (We don't have nor plan to have children.) Travel is also big for us and we don't like to skimp on it (we go on 3-5 vacations annually).
Eta- this is how we feel comfortable and is not meant to judge how others spend their money. This is what we feel comfortable with our finances and our priorities.
It depends on so many factors. Here that HHI will yield take home income of a little over $7k/mo. Property taxes on a $300-400k house range from roughly $6k-$12k. If you're looking at a property in an HOA monthly dues are another $200-300/mo. Our house was in the low $300s, we put 20% down and our PITI and HOA are approx. $2,300/mo.
The problem is that I don't know if you mean buy a $500k and put down 20% (thereby financing only $400k) or something else. We made about that when we bought our current house and we bought in the $400-500k range but financed <$375k. It's totally doable.
I think there are too many variables - for instance, our last house was ~$350k and our mortgage (including PMI) was $2400, now we're in a different house and are rolling in a reno loan. Total mortgage is high 5s and our mortgage when the reno is complete is $2750ish. All completely different interest rates, etc
We'll pay prop taxes and insurance on our own, but that will be around $5k-$6k per year. No PMI on this mortgage.
I selected the higher choice, as it has worked for our family. We're in our forever home now, so we are okay with a higher price point for that reason.
I think we just spend a lot of money on *stuff.* We could probably technically afford a $400K house on $150K income, but the idea gives me shivers. We're really comfy with a $235K mortgage on $150K income; we max out retirement and buy pretty much whatever we want.
Yes, we're really conservative, but honestly it helps us keep our sanity. It's much easier to deal with a stressful job environment when I know I don't technically have to show up every day just in order to keep a roof over our heads.
Absolutely! I have actually used that a couple of times with my boss, basically that I'm working here because I want to. Once the level of crap surpasses my belief in the cause, I'm out.
I live in an area with low property taxes, we only pay $2k/year on a $285k assessed value (my dad in MD almost had a heart attack at that rate). Virginia's taxes aren't great, but they aren't horrible, even the personal property taxes aren't outrageous.
That said, also in my area, $350-400k will buy you a nice house with adequate space and a decent yard. So while you could go higher possibly, for me, it wouldn't be worth it if I could get what I wanted for less.
I voted 100-200k. We make almost $200k and our $190k house is a bit more than I want to be paying.
This really shows you the difference in PITI % of income for HCOL vs. LCOL (MCOL). We probably make close to the same and are going to buy closer to 500K when we do buy. But there just aren't options to get a 190K house. We also plan on having our mortgage payment be close to 2600 (what we pay in rent now). If we only had a $1200 mortgage/rent payment I think I would feel super rich!
One thing to consider is yes you could buy a cheaper house, but from a business development standpoint, I get a lot of leads from my neighbors. I wouldn't get the same type of leads from people living in 150k house as I do from people living in 600k houses
I voted 100-200k. We make almost $200k and our $190k house is a bit more than I want to be paying.
That is crazy talk. You do realize in some areas how little $190k buys, right?
What? This awesome studio condo would be great for my family! 504 sq feet and one bathroom, that is all 3 people need right? Although I guess there is an HOA fee of $348 so that doesn't really fit the bill.
That is crazy talk. You do realize in some areas how little $190k buys, right?
What? This awesome studio condo would be great for my family! 504 sq feet and one bathroom, that is all 3 people need right? Although I guess there is an HOA fee of $348 so that doesn't really fit the bill.
I voted 100-200k. We make almost $200k and our $190k house is a bit more than I want to be paying.
That is crazy talk. You do realize in some areas how little $190k buys, right?
Oh I realize it. I'm still adjusting to how "high" prices are here compared to everywhere in Texas I lived previously. We got half the house, 1/4 the land for $60k more. And I realize that if we wanted to live somewhere more expensive, we'd have to make sacrifices in other areas to be able to afford it. However, the question was what I'm comfortable with.
That is crazy talk. You do realize in some areas how little $190k buys, right?
I'm right beside her. We have similar incomes and I wouldn't mortgage more than that.
And I know that doesn't buy much in some areas, but it buys plenty in my area, and the original question asked what *I* would spend.
I'm not sure how that's crazy.
Ok, that's understandable.
But what if your job picked up and moved to the DC metro area, or the NY metro area, and renting was not feasible for whatever reason? I guess I am looking at this as a more national view. I can probably find some decent house to buy in the $400k range (which is what I picked) if I am putting 20% down, in probably 97% of the counties in the US. That isn't true for the $200k figure.
We have $550/month in student loans and a little additional debt as well. It's also a fixer. Similar, completely done houses have been going for around $250k in the same area.
Also, we are only putting down 10%. The original plan was to save 20% of something that was $225k to $275k and buy in about 2 years, but then this came up and we can remodel the way we want. We plan to put about $75k into it to make it what we want.
In about 10 years, assuming about the same income and a larger DP, I might feel comfortable up to $450k or so, BUT we also want to max out retirement vehicles ($46k/year) and contribute at least $10k/year/child to a 529 once we have kids in a few years, so those are some pretty heavy financial goals.
ETA: We also bought using only my husband's income, so it gives us flexibility.
I'm right beside her. We have similar incomes and I wouldn't mortgage more than that.
And I know that doesn't buy much in some areas, but it buys plenty in my area, and the original question asked what *I* would spend.
I'm not sure how that's crazy.
Ok, that's understandable.
But what if your job picked up and moved to the DC metro area, or the NY metro area, and renting was not feasible for whatever reason? I guess I am looking at this as a more national view. I can probably find some decent house to buy in the $400k range (which is what I picked) if I am putting 20% down, in probably 97% of the counties in the US. That isn't true for the $200k figure.
We've thought about that exact question because I'd love to live in DC for a period of time. And honestly, we'd probably rent. It would take me too long to adjust my view of value to feel okay with the higher real estate prices. I see on here what people are spending and it makes me too anxious.
I voted 100-200k. We make almost $200k and our $190k house is a bit more than I want to be paying.
Yeah, our combined incomes are a hair less than 150K and our home was 176K and its perfect for us, because the mortgage payment would still be managable if one of us was fired/quit/unable to work.
But what if your job picked up and moved to the DC metro area, or the NY metro area, and renting was not feasible for whatever reason? I guess I am looking at this as a more national view. I can probably find some decent house to buy in the $400k range (which is what I picked) if I am putting 20% down, in probably 97% of the counties in the US. That isn't true for the $200k figure.
We've thought about that exact question because I'd love to live in DC for a period of time. And honestly, we'd probably rent. It would take me too long to adjust my view of value to feel okay with the higher real estate prices. I see on here what people are spending and it makes me too anxious.
I will say (and I am sure this is horrible MM wise) but it kind of all works out. So as I mentioned we make about the same income wise. We pay just under 2700 for rent. We still put 15% into retirement, we can still pay for pricy daycare, we still have savings and make all our bills on time. And I am not worried about going out to eat or whatever (at least prior to the shutdown). I guess we put less into savings each month but I don't feel like we are stretched at all.
I don't think pamela is being crazy. She is answering for her own personal comfort levels, not trying to tell others that they would be wrong/stupid/crazy to buy in those levels.
Her personal comfort levels are nowhere near my own, but that doesn't mean her opinion is wrong.
I'm right beside her. We have similar incomes and I wouldn't mortgage more than that.
And I know that doesn't buy much in some areas, but it buys plenty in my area, and the original question asked what *I* would spend.
I'm not sure how that's crazy.
Ok, that's understandable.
But what if your job picked up and moved to the DC metro area, or the NY metro area, and renting was not feasible for whatever reason? I guess I am looking at this as a more national view. I can probably find some decent house to buy in the $400k range (which is what I picked) if I am putting 20% down, in probably 97% of the counties in the US. That isn't true for the $200k figure.
No offense meant by the this, but in what scenario in either DC or NYC would renting not be feasible, but buying would be? I am having trouble envisioning not being able to afford rent, but somehow being able to buy? Or did you mean something else?
When people talk about "only buying based on 1 income" do you mean the lower income and the higher income each have to cover the mortgage on its own? What I'm trying to figure out is if people look at both incomes and make sure the lowest one can cover the mortgage alone or if they just say "the higher income is more than enough to pay for this mortgage even if lower income goes away."
We have built our lives around the assumption that we will both be working. Since DH's income is so variable, we could afford our fixed costs on my salary. However, if I was making zero dollars for an extended period of time, I have no idea if he could cover our obligations with his take-home every single month. This is not something I am very worried about (as I would plan to find a new job), but I hear so many people say they only used one income to buy/make decisions. Hard to do that in an entrepreneurial setting.
I don't understand how some people's personal comfort level or situation makes them crazy. I've said this a few times, but I would be house poor with a $400k mortgage. I understand that in some areas, that wouldn't even buy me a shack. If I lived in one of those areas, I would probably have to rent until I had a very large DP. Again, for my own comfort level.