homer_simpson
Well-known member
Crispy3 said:
It's not you can only afford... It's what I would feel comfortable with without a down payment.
how much can we afford a house?
- Thread starter gld2
- Start date
It's not you can only afford... It's what I would feel comfortable with without a down payment.
irvinehomeowner
Well-known member
4x sounds reasonable to me... 3x is Homer's ratio because he's a baller and makes 7 figures.
homer_simpson
Well-known member
irvinehomeowner said:
Like I mentioned it depends on your downpayment too. Some people love living beyond their means or just being a hermit at home... different lifestyles i guess.
irvinehomeowner
Well-known member
Ballers don't make downpayments... they pay ALL CASH.
Homer is a 2nd generation FCB.
Homer is a 2nd generation FCB.
The Motor Court Company
Well-known member
The ratio depends on ethnicity and interest rate, and of course discretionary spending. What it fails to account is Asians typically receive a generous amount of downpayment help from the parents. Take Chinese immigrants for example, with the one child policy a married couple can receive 2X the assistance. Asisans are known for frugality as they don't eat at fancy restaurants or take luxurious vacations and willing to spend more on housing and better schools.
sgip
Well-known member
$100k post tax.
$400k at 3.5% is an annual expense of $21,552
12 months of HOA dues is about $2,400
12 months of insurance is also aboutt $2,400
A $500k home in a 1.3% tax area (Mello Roos) is $6,500
Air conditioning/Heating a 2000 SF home per year is $3,500
Rounding up everything else, let's say $45,000 per year - other utilities, repairs, water, etc.
That then leaves roughly $1,000 per week for car payments, gas, food, school supplies, laundry detergent, baby sitting, vacations, Disney Annual Passes.
I'd say myself that's pretty close to the breaking point. Not much room for savings plan, college, emergencies, etc.
My .02c
$400k at 3.5% is an annual expense of $21,552
12 months of HOA dues is about $2,400
12 months of insurance is also aboutt $2,400
A $500k home in a 1.3% tax area (Mello Roos) is $6,500
Air conditioning/Heating a 2000 SF home per year is $3,500
Rounding up everything else, let's say $45,000 per year - other utilities, repairs, water, etc.
That then leaves roughly $1,000 per week for car payments, gas, food, school supplies, laundry detergent, baby sitting, vacations, Disney Annual Passes.
I'd say myself that's pretty close to the breaking point. Not much room for savings plan, college, emergencies, etc.
My .02c
changm55
New member
Crispy3 said:
well... hey, if ur comfortable with spending more and can find a means to qualify at a good rate, then sure go for it... to me it just means the next 30 years of my life might contain stress over finances and feeling chained to ur house if i decide on any sort of career change... i mean, i know a lot of ppl who do it... lot of my friends do x5 or even x6 income but doesnt mean i would recommend it...
given the numbers and 20% down we all agreed on for 100k earnings... i would MAYBE do x5 if i get 2 townhome/condos for 250k each and then rent one of em out... think i would be more comfortable with that since it cushions the potential risks by a good amount as long as i can be some what cash flow positive on the rental...
usctrojancpa
Well-known member
That's not the purchase price, it's the loan amount.Crispy3 said:
socal78
Well-known member
For us, we wanted a very comfortable payment rather than be on the hook for the most house we could afford, so, let's see. The loan amount was about 3.3x gross annual income. Sometimes I wish we had looked at bigger / more expensive homes, but there are also plenty of times I don't, like when surprises come up with the house (new kitchen, new carpet) or when we're being pick-pocketed by the two kid's extracurricular activities or just knowing we won't ever lose any sleep over making ends meet. There are also times I wish we'd bought a less expensive home. Then, we could direct more towards investments and save more for retirement, which is currently nowhere near what I'd like to see it at. The grass is always greener on the other side.
cubiczirconia
New member
I wonder many times how people are doing it. Our fixed monthly expenses are around $2300 for the house (Mortgage + HOA + Property tax + Mello Roos), and fixed extra curricular activities for two kids are around $900, or round it to a $1000 for those belt testing fees and concert fees, books. I do make an extra principal payment of $1500 per month which means I can comfortably stretch the monthly expenses to a good $4000 per month, but if it becomes a must do payment, it might get stressful. One trip to India for the whole family costs more than $10k just in tickets and travel, and we visit every year. Three little trips in US a year add up. Then last year we were introduced to medical expenses- the things that aren't covered by the insurance! I did skip that extra principal payment a few times. A little luxury here and there, retirement, 529s, the list is long..
If the house ate the paycheck, I will be one sad person, but then at least no one would show off the extra room they have in the house to leave their laundry while I have to fold mine immediately ;-) More than how much we could afford, we focused on how much we need in terms of space to live comfortably. If money is surplus, there are thousands of ways to invest.. the primary residence is not the beginning and end of it.
If the house ate the paycheck, I will be one sad person, but then at least no one would show off the extra room they have in the house to leave their laundry while I have to fold mine immediately ;-) More than how much we could afford, we focused on how much we need in terms of space to live comfortably. If money is surplus, there are thousands of ways to invest.. the primary residence is not the beginning and end of it.
CZ, if you and Mr. CZ have stellar credit and aren't going to finance/refi a home or car anytime soon, I would look into churning some credit cards to get some miles and points to make these trips free or affordable. Read these blogs and forums for more info:Cubic Zirconia said:
thepointsguy.com
millionmilesecrets.com
flyertalk.com
No affiliation, just happily read those blogs and forums to try to figure out how to travel around the world in first class, stay at 5 star hotels...all without spending a fortune. It can be done.
cubiczirconia
New member
Refinancing! I will bookmark the links though, might be useful soon..thank you OC