weddell Posted July 4, 2015 Share Posted July 4, 2015 At the price ranges people are quoting for that salary, you could maybe get a condo here. I just checked zillow and the cheapest house available in our city is $500,000 with $10,000 per year property tax. There aren't many condos here, but some were in the $200-$300,000 range. That particular house is a 1950's ranch with 1500 square feet. We are in a North Shore suburb of Chicago. Quote Link to comment Share on other sites More sharing options...
Guest Posted July 4, 2015 Share Posted July 4, 2015 Hey! I'd take 1500 sq feet. That would be nice :) Quote Link to comment Share on other sites More sharing options...
Guest Posted July 4, 2015 Share Posted July 4, 2015 I assume though that she doesn't have kids yet. Taking on a mortgage 4x your income when you are single or without children is a bit different than taking on one that size when you have little feet to keep in shoes, little bellies to fill and looming orthodontia work. We are in the same general area and I expect that we wouldn't be comfortable with more than 3x our annual income when we are ready to buy our next home. Orthodontists and anesthesiologists make like bandits. Bandits. Ugh. Quote Link to comment Share on other sites More sharing options...
SparklyUnicorn Posted July 4, 2015 Share Posted July 4, 2015 I wonder why banks don't ask for the number of children you are actually supporting not just child support payments. They don't ask directly, but they see your tax forms. So they know. Quote Link to comment Share on other sites More sharing options...
Tap Posted July 4, 2015 Share Posted July 4, 2015 I wonder why banks don't ask for the number of children you are actually supporting not just child support payments. Because that number is too variable. They don't want factors that are variable in the equation. Child support on the other hand is a legal contract and is a fixed number which has to be calculated into an expense. One parent my spend $4000 on elite sports for their kid, keep them in brand name clothes, feed them only organic grass raised meats, and provide new cars for all the teenagers. The other parent my do no sports for the kids, use hand me down clothes, use coupons at discount groceries, and make teens earn money for camps, spending money and cars. Kids, really aren't that expensive to raise. Unless they have a severe medical condition, most money we spend on kids is optional. Even my dd8 who has special needs, doesn't have to have her therapy and meds to live. They are medically advised and life altering....but not life sustaining. Quote Link to comment Share on other sites More sharing options...
frogger Posted July 4, 2015 Share Posted July 4, 2015 Children aren't that expensive to raise. Snort. Food alone takes a huge chunk out of our paycheck and we eat lots of lentils and beans. Sorry but food alone (and I don't buy organic and beef is restricted to twice a week and usually cheap ground beef) costs us $22,000 + (that's not including food items they get for gifts that other people eat regularly because that comes out of the gift budget. ) So if you only make $70,000 a year that is a pretty big percentage. I realize people with young children may not realize that an active teen or older child usually eats more than an adult. It needs to be factored into the equation. SparklyUnicorn, that makes sense although I cannot for the life of me figure out how I was approved for over twice the amount we were willing to spend when I got a mortgage. I thought maybe that hadn't factored that in. 4 Quote Link to comment Share on other sites More sharing options...
JFSinIL Posted July 4, 2015 Share Posted July 4, 2015 That was about our income when we got the house we are in now for $125,000. With other expenses, (medical expenses and therapy for kid with autism) it was what we could afford. Quote Link to comment Share on other sites More sharing options...
Joyofsixreboot Posted July 4, 2015 Share Posted July 4, 2015 Dh and I have always kept the house to yearly salary or below. We live in a lower price area and have always " under bought". Housing is not our priority I guess. 1 Quote Link to comment Share on other sites More sharing options...
TranquilMind Posted July 4, 2015 Share Posted July 4, 2015 Just curious. And no, that is not our family's personal income amount. No more than a thousand a month, unless there is no debt. Landlord requirements are that rent cannot exceed 1/3 to 1/4 income in order for the person to be able to comfortably pay. Lender guidelines would allow a bit more but that will depend upon comfort levels. Our mortgage is maybe 1/10 income and there are still months when our costs deplete our accounts because kids are expensive! And car repairs and house repairs, etc. 1 Quote Link to comment Share on other sites More sharing options...
gardenmom5 Posted July 4, 2015 Share Posted July 4, 2015 I assume though that she doesn't have kids yet. Taking on a mortgage 4x your income when you are single or without children is a bit different than taking on one that size when you have little feet to keep in shoes, little bellies to fill and looming orthodontia work. We are in the same general area and I expect that we wouldn't be comfortable with more than 3x our annual income when we are ready to buy our next home. she did have two college student siblings living with her (now just one) and they didn't pay any rent or expenses, so she was covering their utilities and most of their food as well. she also paid all car expenses, even though she allowed one other sibling to use it. and no, it doesn't include medical, or tuition, etc., but she wasn't *just* paying for herself either. eta: when ds got his computer - her electric bill reflected that and she got quite the shock! eta: when we bought our house - it was nearly %50 of our gross income in house payments. but we were locked in. things were very tight for a few years, but income goes up - and our mortgage stays the same. Quote Link to comment Share on other sites More sharing options...
DawnM Posted July 4, 2015 Share Posted July 4, 2015 Yes, that was how I read it, too. 75k as a sum wouldn't buy anything, but as a salary with a responsible owner who saved for a bit you could get something small or older in this HCOL area. Plenty of condos are available in the 200-250k range here. Right, but if she doesn't live in your area, that really doesn't matter. Quote Link to comment Share on other sites More sharing options...
DawnM Posted July 4, 2015 Share Posted July 4, 2015 I wonder why banks don't ask for the number of children you are actually supporting not just child support payments. They didn't ask how much our childcare costs were either. We were paying almost $1,000/mo for each kid back then too. Quote Link to comment Share on other sites More sharing options...
Guest Posted July 5, 2015 Share Posted July 5, 2015 Right, but if she doesn't live in your area, that really doesn't matter. .... But wasn't she asking what that would buy in terms of housing quality in each of our areas? That was how I read the question, not how to calculate what percentage of income could go to mortgage. Quote Link to comment Share on other sites More sharing options...
Arcadia Posted July 5, 2015 Share Posted July 5, 2015 I disagree with the article: 4 times the annual income seems way too much; it will leave the person strapped for cash. The rule of thumb I heard of no more than 2.5 times the annual income seems more sensible.2.5 times of $75k would really get you nothing here unfortunately.My hubby was earning close to $75k before tax when we bought and our loan amount was slightly over 4 times. We are able to pay it off in less than 9 years if I dump almost all our emergency savings. As such, the 30 year loan would be paid off in less than 10 years with emergency savings intact. 1 Quote Link to comment Share on other sites More sharing options...
luuknam Posted July 5, 2015 Share Posted July 5, 2015 At $75k, I probably wouldn't feel comfortable buying a house over $160k (we make less than $75k though). The good news is that here you can find okay houses with 3 bedrooms for $100k and up without too much trouble. We're not planning on staying in WNY for long though, so we're still renting a small 2 bedroom. Quote Link to comment Share on other sites More sharing options...
Btervet Posted July 5, 2015 Share Posted July 5, 2015 That was right around DH's salary when we bought our townhome for 240k. Our mortgage was around 50% of our take home pay, so it was not comfortable but doable. The house was the lowest price we could get, it was a foreclosure in horrible shape. Since then we have put 60k into it to fix up, so I guess it would be more like 300k. We are very lucky that over 5 years the mortgage has lowered to 35% of take home pay. I think comfort probably varies a bit based on location. A mortgage being 50% of our income was not fun at all, but it was better than an hour + commute daily for DH, and better than being a two income family with little kids (for us!). The recommendations of 2.5x your base salary for a house just doesn't make sense in some places. Here it would be a moldy 1 bed condo that needed 100,000+ in renovations to be livable. Quote Link to comment Share on other sites More sharing options...
Tsuga Posted July 5, 2015 Share Posted July 5, 2015 doesn't work here if you want to buy a house, you'd better be prepared to fork out. when interest rates are very low, that will increase how much house you can buy. (re: mortgage) same with size of down payment. (here, $150k would buy a no frills studio condo in an older building. the 1200sqft house up the street sold by the bank for $300K is a tear down.) Yeah, we'd have to move about three hours away on our three-jobs-that-require-masters'-degrees-salaries to do that. Ridiculous. They're going to have to lower house prices if that is the case because even Microsofties can't afford the 1/2 million dollar mid-century ramblers in our neighborhood, not to mention the one million dollar homes. No more than a thousand a month, unless there is no debt. You couldn't get government housing for a family of four at that rate, not in a rental, in our city. I paid near that for a two-bedroom subsidized government apartment as a student. As for a mortgage, forget it. Quote Link to comment Share on other sites More sharing options...
TianXiaXueXiao Posted July 5, 2015 Share Posted July 5, 2015 We are purchasing a small (<1400 sqft), older (1964) 3 bed 1.5 ba on that salary for a family of 4 with $0 down. Our monthly mortgage payment will be $1550 which is less than what we'd pay for rent on the same house. We feel that we are getting a good deal for the market we are in. Newer and bigger homes are not very desirable to us because they lack privacy, have HOAs, and nearly no yard (2500 Sq ft of house on 3000sqft lot! For $500k and up). It's more than 25% of our income, and it's worth it to have garden space, privacy, and that Mayberry feel even though we're just outside the city. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.