Housing in high cost of living areas

[jld]

How do you do it? How do your neighbors do it? Is it worth it? I've asked on other threads, but I'm not sure they're getting the exposure this will. Did you buy before the market went up? Did you inherit money or the property itself? Did you start a profitable business?

 

I don't know if anyone will respond to this, as I can't imagine a more intrusive question, lol. But there may be some brave folks out there willing to help the rest of us understand just how this can happen. If you want to give us an education, please post.

Edited June 23, 2010 by jld

[Jean in Newcastle]

We bought a foreclosure - way before the current crisis - 11 years ago. We bought it as is. Much of it still is as it was, but we are very slowly trying to fix some areas. We also refinanced so that our mortgage is as low as it can go.

[NoPlaceLikeHome]

I do not live in a high cost area at least yet:D. My dh and I had a theory during the housing boom that there was a lot of smoke and mirrors and over-extended people out there:(

[Crimson Wife]

We bought after the market came down about 30%. A few years ago we didn't think we'd ever be able to afford to buy. As it was, we had to move to the East Bay from the Peninsula to find something we could afford. The monthly payment on our home is not that much more than what we were paying to rent a smaller townhome. But that's still a lot!

 

Is it worth it? My DH would say yes, which is why we're here. As for me, I'd rather live someplace nice but a bit more reasonably-priced.

[lulubelle]

I know what you mean. A couple of years ago the median home here was 800k. They do not build any new small houses around here. They knock down the small ones and build as big as the property allows. When we first saw our house I told my husband it looked like some old grandmother lived there and never touched it. Well, it was the only house we could find that we could barely afford and had 3 bedrooms on the second floor. My husband has done all the renovations we have done to date. There are endless more to do! It is very small. My husband has an 8 minute commute. You have to lower your expectations and drool at the rich people!

[FairProspects]

Its worth it because both our families are here and we grew up here. If they weren't here, I'm sure we would live elsewhere. As it is, we only do it by paying a higher percentage of our income for a very tiny house. We just scrimp on other things. Some of our neighbors have two jobs or very high paying jobs (doctors, dentists) in order to afford their housing.

[Jean in Newcastle]

You also have to realize that in a high-cost of living area, our salary is higher than a comparable job in a lower cost of living area of the country.

[lllll]

..

[melissel]

But it was miserable living in a wealthy neighborhood and being 'poor', (by their standards). I think some of the neighbors felt sorry for us. :confused:

 

My friend and I talk about this all the time. It's part of what keeps me from agonizing over wanting to move to a nicer house/neighborhood. It would take all our money just to buy a new house. We wouldn't have anything left over for anything else!

 

Our house is actually relatively modest for the area we live in. We bought it when we had a baby and two decent incomes. Fortunately, DH now makes enough that I could quit my job, but we're still not as safe as I'd like us to be. We take very inexpensive vacations (a week at the Jersey shore in a tiny condo is our big splurge), we're frugal in most areas, our cars are older and paid off, we buy used and get hand-me-downs as much as we can, etc. We live comfortably, but we don't save anything (at the moment), and that bothers me a lot. DH also has big dreams (his own business, rental property, investments), but I can't make him see that we won't reach any of those goals while we're trapped by this mortgage, and he certainly won't agree to downsize in order to stay here in this high COL area. I love living in New Jersey, but I won't feel financially safe here without some kind of small miracle!

 

As for our friends, they're almost all in the same boat--living frugally but comfortably, but not really saving anything. I can only think of one who has the money to toss around on big purchases and vacations, but I don't know their savings situation. Of course, I know mostly HSers, so for the most part, they're limited to one income (maybe one and a half), but that's really what it takes here to create financial safety--either that or a big honkin' income. If you're of moderate means, you live tightly or both spouses work.

[cornelia9805]

It is really hard! We live in a 2 bedroom condo and it will cost us at least 1 1/2 times what we are currently paying to move into a 3 bedroom house. Sometimes I really wonder if it is worth it. There are so many great things about this area, that it keeps us here. Plus my DH's job isn't exactly transferable out of the state of CA. In the scheme of things we really don't do bad, but we would still like more space.:glare:

[TwinMominTX]

We lived in a high cost of living area in southern California - about 1/4 mile from the beach. We had the income to afford to live there. We put down a standard down payment and then paid monthly mortgage payments.

 

About half our neighbors also had high incomes and the other half would refinance their mortgages every year or so and live off the equity in their homes. I imagine when the market dropped this was no longer possible.

[melissel]

...the other half would refinance their mortgages every year or so and live off the equity in their homes. I imagine when the market dropped this was no longer possible.

 

:eek: I would be terrified on a daily basis if I had to live that way.

[lllll]

..

[melissel]

Yeah, the neighborhood was a ghost town Monday through Friday. And I never saw so many stressed-out working moms. Only a retired couple (who later moved to a cheaper town), a couple other random SAHM's, and I were at home. We had the whole place to ourselves during the week. :D

 

Ha, here too, and our neighborhood is not the best in town by far! I only know two SAHMs here--myself and one other (their house was in poor shape when they bought it, so they probably got a good deal). I can think immediately of six other families, all with working moms. I've never even met most of them. You almost never see kids in our neighborhood. My DDs have no one to play with *sigh*

 

ETA: It was just totally bizarre to call myself a SAHM. It's only been 4 months since I left my job, and I think that's the first time I've referred to myself that way! I'm a little giddy :lol:

Edited June 22, 2010 by melissel

[Alphabetika]

We bought our house from my in-laws at way below market value, with the stipulation that we were buying it "as-is." We were very blessed to get it. Now that we've been here 13 years, we know that it was more "as-is" than we thought and that dh's parents saved a lot of money by not having to fix it up. But we're still deeply thankful.

 

We were in NH recently and I was floored to discover that most things do not have sales tax added. We'd save soooo much money if we didn't have sales tax!

[Crimson Wife]

You also have to realize that in a high-cost of living area, our salary is higher than a comparable job in a lower cost of living area of the country.

 

To a certain extent, but not as much as one would imagine. The median income for a 4 person household in the town where I live is $102.3k. The current median home price is $513k. Going to the next town over, which is more upscale, the median income for a 4 person household is $114k and the current median home price is $729k. Go over one more town and the median income is $149.6k while the current median home price is $882k.

 

So you're looking at a multiple of 5-6x median income. It's crazy!

[Jean in Newcastle]

To a certain extent, but not as much as one would imagine. The median income for a 4 person household in the town where I live is $102.3k. The current median home price is $513k. Going to the next town over, which is more upscale, the median income for a 4 person household is $114k and the current median home price is $729k. Go over one more town and the median income is $149.6k while the current median home price is $882k.

 

So you're looking at a multiple of 5-6x median income. It's crazy!

 

Which is why we live in the "slums of Newcastle"! (Which are not bad at all. It is a very nice lower middle class neighborhood with a mix of young families and retirees.)

[Renee in NC]

To a certain extent, but not as much as one would imagine. The median income for a 4 person household in the town where I live is $102.3k. The current median home price is $513k. Going to the next town over, which is more upscale, the median income for a 4 person household is $114k and the current median home price is $729k. Go over one more town and the median income is $149.6k while the current median home price is $882k.

 

So you're looking at a multiple of 5-6x median income. It's crazy!

 

Where do the low income workers live? I posted in the other thread that I found 380 properties within 20 miles of SF that cost less than $100K. 199 of those were single family homes (the others were condos.) 82 of those had 3 bedrooms. Most of them were older, looked run down, and/or were in not great (or downright bad) neighborhoods.

 

That's reality for the rest of the population - those who don't come anywhere near that median income. I can imagine that trying to be "middle class" there would be difficult. We would still have to live within our means or move.

[Carrie12345]

We don't right now, but we came close. 10 years ago, we almost convinced my mother to let us take over her mortgage until we could qualify to buy my childhood home from her. In 2000, she sold it for $36,000 less than what we paid for the home we bought in a low-cost area in 2005. Those owners turned around and sold it for TWICE the 2000 price in 2005 (with no improvements). We definitely missed our "in".

 

Many of my friends are in public service, so I have an idea of what they make. I have no idea how they afford not only the houses, but the cars, the clothes, the kids' activities, the meals out...

 

Yes, dh and I have debt that offsets his higher income, but I still don't know how the math could possibly work. But I'm sure as heck not going to ask!

[MIch elle]

Our next door neighbors bought their house 5-6 yrs ago for $350k and it's smaller than our house and probably worth a bit less now. She doesn't work and stays home with their 2 small dc. He has a long train commute to Boston everyday for work.

 

There are houses in Worcester, MA (near us) for less than $200k because it's in the city and the school system is not very good. Parts of Worcester are very nice and expensive, and other areas are slums.

 

My neice (32yo) closes on her house in CT next month (outside Middlebury). Asking price was $310k for a 2,500 sf, 1977 house in move in condition on 1.3 acre. They are putting down 20%, and the two of them make over $100k.

Edited June 22, 2010 by MIch elle

[whitestavern]

We buy old (read: needs work) so that helps a lot! Our first home we purchased was about 40 min from Boston, which was still an inexpensive area. By the time we sold a year later the house had increased in value over $100K because the towns closer to Boston had just skyrocketed. This enabled us to put a larger amount down on our second home.

[Tess in the Burbs]

we are house poor. Most of our money goes to the house. AND when we lived out west we were surprised by how much people put toward their housing(almost 50%!!!). We bought at the height of the market. Nice realtor came by yesterday with a list of homes sold/for sale in our neighborhood....the sold ones were short sale or foreclosure:001_huh: The for sale ones are over 50K less than what we paid. We won't be buying again. We have never made money selling a home(and this is #3!).

[Chris in VA]

We live in a rectory that came with the job--

Our house was assessed at over a million dollars. Not that it's that special, it's just the area and the fact that there is so much land around it--and there's absolutely no way we could afford it, otherwise.

Gotta say the houses in the neighborhood across the street run about 275-400K, and it's mostly a two-parent working, somewhat blue collar neighborhood.

Next door (thru the woods), the neighborhood runs about 700K--and it's filled with professional people, many of hispanic and arabic descent.

Lots and lots of condos here, too--

[MariannNOVA]

We have attempted to buy low and sell when the market was on an upswing - this is over a period of 15 years (for me, it is over a period of 25 years - DH started late ;)).

 

There are times when we have done well, there was one time when we escaped by the skin of our teeth. Except for one period of about 6 years, we have always lived in places where the housing market is considered 'primary' - as in large, metropolitan area with a steady influx of residents.

 

The house we are in at present is in a first rate location and town -- it is small and needs lots of work, but we were able to purchase it for a couple of hundred thousand less than it would have been if the market was healthy. The folks who were selling had purchased it when the market was 'low' and had put a minimum of $ into improving it. They didn't do badly selling, however, they probably paid too much for the house they moved up to as the market has dropped slightly more since they purchased. However, since all of us intend to stay put for a few years at least, it should work out.

 

This 'awareness' of the housing market is, for me, sort of a full-time job. I am never NOT watching what prices are doing. Right now, in a not truly active market, homes in our town (owing to the school system) are selling on average in less than 30 days and some are selling in 3-4 days with bidding contests. I'm sure that when we get ready to sell (10-12 months) that stuff will be long gone and we will sit and languish on the market - but that's just my traumatic worldview.

 

Except for one or two times, we have always bought the WORST house in the BEST neighborhood - that's what we did with this house.

 

Crimson Wife raises a good point with her median income information for the area where she lives. Those numbers cannot be ignored, imo, and it is worth taking the time to look up those statistics.

 

Here is a link to a bar graph that provides numbers but not any other info regarding fairfax county, va.

http://www.fairfaxcounty.gov/demogrph/graphs/hhinc.pdf

[JFSinIL]

We don't. My husband is a lawyer, yet no way could we ever afford to live back where I grew up. Orange County, CA, wasn't priced beyond belief back in the 60's. My childhood home (lower 20's new in early 60s) sells now for a hair under one MILLION dollars. For a crummy little ranch house with no backyard/pool. Three doors down from a busy street.

[Granny_Weatherwax]

We don't. My husband is a lawyer, yet no way could we ever afford to live back where I grew up. Orange County, CA, wasn't priced beyond belief back in the 60's. My childhood home (lower 20's new in early 60s) sells now for a hair under one MILLION dollars. For a crummy little ranch house with no backyard/pool. Three doors down from a busy street.

 

I understand that. DH and would love to move back to Colorado but when we look at the cost of housing we cannot afford to go home. It makes me quite sad.

 

Our first home in CO (purchased in 1992 for $40,000) was 800 square feet. It recently sold for $130,000. Not quite the same as CA inflation but is totally crazy for our area in CO. If we tried to buy a house in CO comparable to what we are in now in IL we would have to pay 3-4 times the price and live for the house.

[Wheres Toto]

You also have to realize that in a high-cost of living area, our salary is higher than a comparable job in a lower cost of living area of the country.

 

:iagree:

This is part of it. In my area its still possible for a 16 year old to get a retail job paying $9-$10/hour.

 

We currently live in a very small bungalow that dh bought 11 years ago before things got very expensive but NJ has always been a HCOL area. Growing up I lived in apartments all the time, first house I bought (with ex) was a foreclosure. I know many people who have pretty much no hope of getting ahead enough to buy a house. Even our dinky little house would go for over $300,000 even in the current market.

[RamonaQ]

We bought 11 years ago. We bought when we had a double income and put close to 10% down. Then we re-fi'd 3 different times as the interest rates decreased. We bought in an area that was just being re-discovered for families, so initially there were many elderly couples here.

 

We also bought very small and affordable on a single income, which has allowed me to homeschool the kids (which we had not planned when we bought).

 

Our mortgage is less than what it would cost to rent a 3 bedroom/1.5 bath place. So yes, it is worth it.

 

When the market fell out, our house declined somewhat in value but our city's housing market is one of the better ones in the country. Our house is still valued at greater than 50% what we paid.

 

Why else is it worth it?

We are in the city, allows ease of commuting.

Our neighborhood is in high demand for families bc/ of best city schools

We can walk to grocery, library, coffee shops (very important here!), banks

There still were jobs even during past recession

Culture, education, etc...

It is a really a beautiful area to live in!

[Crimson Wife]

Where do the low income workers live? I posted in the other thread that I found 380 properties within 20 miles of SF that cost less than $100K. 199 of those were single family homes (the others were condos.) 82 of those had 3 bedrooms. Most of them were older, looked run down, and/or were in not great (or downright bad) neighborhoods.

 

I would imagine that most of those homes for sale are in places like Oakland, Richmond, the bad part of Emeryville, the bad parts of Hayward, and so on. Places where crime is really high and kids get gang-raped at homecoming dance or paralyzed by a stray bullet during piano lessons.

 

Middle-class families who want affordable housing in a safe neighborhood either rent or go way, way out to buy. Brentwood has a bunch of nice homes on the market for the low $200's but it's 54 miles from S.F.

[Renee in NC]

I would imagine that most of those homes for sale are in places like Oakland, Richmond, the bad part of Emeryville, the bad parts of Hayward, and so on. Places where crime is really high and kids get gang-raped at homecoming dance or paralyzed by a stray bullet during piano lessons.

 

Middle-class families who want affordable housing in a safe neighborhood either rent or go way, way out to buy. Brentwood has a bunch of nice homes on the market for the low $200's but it's 54 miles from S.F.

 

Of course. That's what I said - there *are* things available, but they were undesireable. It would be our only choice, so we wouldn't stay there. To afford that "low $200s" house, you would need $40,000+ in the bank and $54K in income. So either we'd live in complete fear of being killed in our beds or we'd have to leave.:D

[Peela]

We rent in a high cost area. We live in a $2million home and pay far less on rent than we would on interest on a mortgage in a home 1/4 of this home's value.

The bank wont lend us money to live anywhere near where we want to live.

So we bought investment properties in areas we don't want to live, and live where we want to live.

[LibraryLover]

It's home. Our families are here.

 

It's geographically gorgeous.

 

The people and amenties are sweet. We have everything we need, and cultural events are close. The library system is amazing. Getting organic food is not a problem, and we are able to buy grass fed meat, and raw organic milk right in our neighborhood. There are farmer's markets etc.

 

When/if we need them, we see there are excellent (& free) academic, art, and music opportuities available to us. We have met the people and they have giant, dedicated hearts. :001_smile: (I ve been known to weep at the their goodness :lol:).

Edited June 23, 2010 by LibraryLover

[Crimson Wife]

Of course. That's what I said - there *are* things available, but they were undesireable. It would be our only choice, so we wouldn't stay there. To afford that "low $200s" house, you would need $40,000+ in the bank and $54K in income.

 

There are a fair number of jobs in the Bay Area which pay $26/hr. I just checked the Bureau of Labor Statistics website and the median for all full-time workers in the S.F./Oakland/San Jose metro area is $30.67/hr.

[LibraryLover]

It's home. Our families are here.

 

It's geographically gorgeous.

 

The people and amenties are sweet. We have everything we need, and cultural events are close. The library system is amazing. Getting organic food is not a problem, and we are able to buy grass fed meat, and raw organic milk right in our neighborhood. There are farmer's markets etc.

 

When/if we need them, we see there are excellent (& free) academic, art, and music opportuities available to us. We have met the people and they have giant, dedicated hearts. :001_smile: (I ve been known to weep at the their goodness :lol:).

.

[FairProspects]

It's home. Our families are here.

 

It's geographically gorgeous.

 

The people and amenties are sweet. We have everything we need, and cultural events are close. The library system is amazing. Getting organic food is not a problem, and we are able to buy grass fed meat, and raw organic milk right in our neighborhood. There are farmer's markets etc.

 

When/if we need them, we see there are excellent (& free) academic, art, and music opportuities available to us. We have met the people and they have giant, dedicated hearts. :001_smile: (I ve been known to weep at the their goodness :lol:).

 

:iagree:This part is amazing. Especially the organic food!

[LibraryLover]

It is!

 

Its not all year (it is new england!), and I do not use it, as I have land and a large garden, but the organic CSA here is only $30/week.

 

I bought organic raw milk today a couple of miles from my home, and then I went to the farm (8 miles in the other direction) and got my grass fed meat.

 

The whole time we were driving, my youngest and I kept saying "This is so beautiful!" We drive it all the time, and yet we marvel at how peaceful and lovely, If you dream of winding country roads, with ocean and harbor here and there, this is what you might dream. WHile I got our meat, my dd fed the goats grass. It's idyliic. We had to slow down for the free range hens on the road. We love it.

 

It's a pleasure to drive 8 miles (in certain directions! lol). My dh goes to an office in Boston a couple of times a week (otherwise he works from a home office), so we know traffic. Oy! :tongue_smilie:

 

I also adore my librarians. They are they most helpful people. :001_smile:

 

The downside is that winters can be long and epic. The upside is that a major metropolitan city is only an hour (well, sometimes more! ;) depending on traffic, which can be wicked) away. We can feed cows at breakfast and be at the art museum before noon.

 

 

 

:iagree:This part is amazing. Especially the organic food!

Edited June 23, 2010 by LibraryLover

[Renee in NC]

There are a fair number of jobs in the Bay Area which pay $26/hr. I just checked the Bureau of Labor Statistics website and the median for all full-time workers in the S.F./Oakland/San Jose metro area is $30.67/hr.

 

So a landscaper or construction laborer would make $26 an hour? If so, then your situation there is not much different than in central NC, but with lower numbers.:D There they would make $10 an hour (at least they used to!) and drive 40 miles to pay $100K for a 3 bedroom, 2 bath house.:tongue_smilie:

[LibraryLover]

This makes me feel so much better. I know we purchased an investment, but I always like hearing about insane and insan-er ;) real estate elsewhere.

 

Everybody wants to live near Nemo & Crush. ;) So far, no major movies about our little part of the world. LOL (Although, my street is looking lovely in a little film called Passionada, which most people have never seen).

 

 

We rent in a high cost area. We live in a $2million home and pay far less on rent than we would on interest on a mortgage in a home 1/4 of this home's value.

The bank wont lend us money to live anywhere near where we want to live.

So we bought investment properties in areas we don't want to live, and live where we want to live.

[Crimson Wife]

So a landscaper or construction laborer would make $26 an hour?

 

The BLS data doesn't break down pay by job title, but "construction and extraction" as a whole has a median of $28.76/hr. Though I would imagine that many of those above-median jobs are for skilled tradesmen. Plumbers and electricians make a TON out here.

 

"Grounds maintenance workers" has a median of $16.26/hr. I would imagine that's held down quite a bit by all the immigrants in the area. I can't think of the last time I saw a non-Hispanic gardener or landscaper doing the manual labor part (as opposed to a landscape architect doing design work).

[WeeBeaks]

We purchased a truly ugly house 10 years ago. It still is the ugliest in the neighborhood, but we're working on it ... slowly ... with cash. We had 2 incomes at the time and no kids. We refinanced x2 to get a lower rate and kept chipping away at it. Those first couple years were HARD and we had little excess for sure. Now DH alone makes what we made together 10 years ago (we were only out of college a couple years), so I stay home. We keep expenses as low as possible (secondhand stuff, couponing, cooking from scratch), and remodeling goes very slowly without home improvement loans. ;)

 

Even with the current downtrend, our house appraises at double what we paid so we're happy campers, though not interested in selling. We could never, never afford what it appraises at now. The neighborhood is nice, and there is a nice mix of young families, middle age and people who have owned their house since it was new (1960s era). DH bikes to work, the grocery store is close and the park, rec center and city pool are walking distance. Love it!

[MariannNOVA]

We purchased a truly ugly house 10 years ago. It still is the ugliest in the neighborhood, but we're working on it ... slowly ... with cash. We had 2 incomes at the time and no kids. We refinanced x2 to get a lower rate and kept chipping away at it. Those first couple years were HARD and we had little excess for sure. Now DH alone makes what we made together 10 years ago (we were only out of college a couple years), so I stay home. We keep expenses as low as possible (secondhand stuff, couponing, cooking from scratch), and remodeling goes very slowly without home improvement loans. ;)

 

Even with the current downtrend, our house appraises at double what we paid so we're happy campers, though not interested in selling. We could never, never afford what it appraises at now. The neighborhood is nice, and there is a nice mix of young families, middle age and people who have owned their house since it was new (1960s era). DH bikes to work, the grocery store is close and the park, rec center and city pool are walking distance. Love it!

 

I loved reading this! Way to go!:hurray::hurray::hurray:

[Renee in NC]

The BLS data doesn't break down pay by job title, but "construction and extraction" as a whole has a median of $28.76/hr. Though I would imagine that many of those above-median jobs are for skilled tradesmen. Plumbers and electricians make a TON out here.

 

"Grounds maintenance workers" has a median of $16.26/hr. I would imagine that's held down quite a bit by all the immigrants in the area. I can't think of the last time I saw a non-Hispanic gardener or landscaper doing the manual labor part (as opposed to a landscape architect doing design work).

 

Well....that is what my dh does (laborer) so that is why I asked!:lol: And, in NC, most of those jobs were held by immigrants as well. Then the economy tanked and that isn't as true anymore.

[Mejane]

Dh's income has always been in line with the cost of housing in the areas in which we've lived. Our first house, which we bought 20 years ago in FL, cost $80K. The one we live in now in CT cost... I almost can't type it without hyperventilating... $400K, which is fairly average for our area. Most of the folks in our neighborhood are teachers (who are paid very well in CT), business owners, and upper-level management types.

Edited June 24, 2010 by Mejane

[dsmith]

My parents paid $65000 for the home I grew up in. They sold it when I was in high school for $295000, and bought a house in the same town for $210000. It's now appraised at $675000. My mom can barely afford the taxes now (about $12000). My in-laws live in the same town and couldn't afford to stay any longer, so we moved in with them so they could keep the house. Many of the older residents have had to leave town, or have done what we did. Our town has become quite desirable over the years, but it's not as expensive as the surrounding towns.

[gingersmom]

I live in a high cost area because we have schools that are consistently rated #1.

 

I purchased my house 9 years ago and it was thisclose to being a fixer upper.

 

The majority of the people on my block have lived here for about 15 or more years and both spouses work.

 

I am the only SAHM on the block.

 

I would love to cash in and move but my house is still thisclose to being a fixer upper. :glare:

[MelanieM]

We bought our condo pre-built and then waited 2.5 yrs to be able to occupy. This was just before a market jump so we did quite well. (Four years after we took possession it was worth about 100k more than we had paid.)

 

We bought our house from the bank and got what was a deal 2.5 yrs ago. However, a couple of neighbours have underpriced since then, so our neighbourhood pricing has taken a little dip this year. We're going to list this summer and expect to get around what we paid or a little more, rather than what the house could have gone for without the quick/low sales.

 

We also spent years saving before we purchased our first home (we put 30% down on the condo), and we have always strived to live a debt-free lifestyle.

[TravelingChris]

I live in a neighborhood where the homes are going from 550,000 to 650,000. We are living in one of the largest homes here with a wonderful view though are landscaping leaves something to be desired. We rent and pay less than the owners pay on the mortgage. It is only a little bit more than we get for a housing allowance so it is completely affordable. WE didn't buy since we can't afford the house prices and we are here only temporarily, probably for no more than 2.5 years.

[Granny_Weatherwax]

To afford that "low $200s" house, you would need $40,000+ in the bank and $54K in income. So either we'd live in complete fear of being killed in our beds or we'd have to leave.:D

 

So the financing is on $160,000 and the income is only $54K a year. What kind of terms are the loans? What about taxes and other escrow items?

[Renee in NC]

So the financing is on $160,000 and the income is only $54K a year. What kind of terms are the loans? What about taxes and other escrow items?

 

At 5.5% and 30 years, the payment is $1141 (taxes 1.5% and insurance 0.5%- no PMI.) That is 25% of income. Obviously, if taxes and/or insurance is higher, then you have to put more down.

 

*If* I were buying a house again, I would not do a 30 year mortgage - only 15 years. So, to get to 25% on a 15 year mortgage, we would have to save $80,000 for the downpayment (and another $15,000 for an emergency fund.)

 

In other words, we would still be renting at that point!:lol: We really won't be able to buy in the future because I learned my lesson and won't go in over my head again. 25% of income, 15 years - that's my rule.

[Peela]

We just got a new leader of our country. A woman.

The times they are a changing.

Not that she may be any better than any bloke, and she's a politician so that doesnt bode well for starters, but still....shes a woman. Cool. (And we didnt even vote for her!).