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Can someone help me figure out what kind of house I can afford?
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jessnbrian
Only God knows His plan for us
Member since 4/13 7238 total posts
Name:
Jessica
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Re: Can someone help me figure out what kind of house I can afford?
Posted by alli3131
You probably can afford a house just maybe not the one you wanted or thought you could afford.
Just to give you a rough idea of what we pay. My mortgage and taxes is 2700/mon. The purchase price was 307 and taxes are 8K.
We have debt (student loans) our combines monthly loan payment is more than the mortgage/taxes. If we did not have the loan debt then we could have had a $400+ house but to tell you the truth we are perfectly fine on our house. Not my first choice neighborhood but good schools and safe and love my neighbors. We did buy a fixer upper so that helped and we were able to make the house our own. It helped that we are super handy and did all the work ourselves.
You need to think outside the box when looking and not say I want this and in this neighborhood and if you do that it will be easier. Also, it does not need to be your forever home. Just your right now home.
This is very true. DH and I lucked out, we just happened to have been looking and ready to buy when the market was at it's lowest point and interest rates were at the lowest. We ended up getting an estate sale house that needed a decent amount of work (which we initially thought was just cosmetic but as we knock down walls we see a lot that needs to be done everywhere)... and we're doing it. We do a lot ourselves (painting, demolition, etc), but the rebuild of the kitchen (walls, electric, cabinets, etc) we are outsourcing to Lowes for a very competitive price and we're really happy with what we're getting. It's costing a lot OOP, but we're doing it at our leisure. We went in thinking this would be a starter house for us, but we are so in love with the area that we've decided that unless we hit it really big and win the lotto, this is our forever house (we'll likely do a front dormer to match the rear dormer in a few years, to bring a 3rd bedroom upstairs).
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Posted 12/30/13 12:12 PM  |
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Re: Can someone help me figure out what kind of house I can afford?
Posted by Teach723
Posted by mommywantsababy
Things also depend on taxes.
Our mortgage payment is only 1400ish a month, but we pay almost another 1k for taxes, mortgage insurance (which you pay if you don't put down 20%), and homeowners insurance..and our mortgage is for I believe 310k or so
Eta: our bills run around 300 a month or so for cable, internet, phone, water, gas, and electric.
So, with our mortgage, we pay at least 2800 a month
Right now we pay for Internet, phone, gas and electric. I know that will definitely go up though. Maybe not too much bc our condo is very old and not energy efficient at all!
I'm thinking 2,000 a month is what can be afforded with the taxes and insurance included. I'm thinking anything around $8000 in taxes would be reasonable.
You are looking at a payment closer to 3,000( if not more) with that mortgage and taxes.
Message edited 12/30/2013 4:50:12 PM.
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| Posted 12/30/13 4:47 PM |
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Mara1017
LIF Adolescent
Member since 5/11 696 total posts
Name:
Mara
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Can someone help me figure out what kind of house I can afford?
You should sit down and prepare a spread sheet with all of your expenses and your after tax income and figure out what amount you can pay and live comfortably. When I bought my house the bank told me that I would be preapproved for ALOT more than I was comfortable spending. I wanted to make sure that I would not be house poor. I wanted to still be able to save money so that my family can go on vacation. So we went to the mortgage broker and told him that we wanted to have a payment of no more than $x and asked what the mortgage/taxes/etc would be in order to end up there. Banks do not take into account your lifestyle (do you like to go out to dinner, do you like to go on vacation, do you have hobbies that cost money, etc)
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| Posted 12/30/13 5:37 PM |
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Teach723
Have faith. Believe. Dream.
Member since 8/10 2356 total posts
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Re: Can someone help me figure out what kind of house I can afford?
Posted by Mara1017
You should sit down and prepare a spread sheet with all of your expenses and your after tax income and figure out what amount you can pay and live comfortably. When I bought my house the bank told me that I would be preapproved for ALOT more than I was comfortable spending. I wanted to make sure that I would not be house poor. I wanted to still be able to save money so that my family can go on vacation. So we went to the mortgage broker and told him that we wanted to have a payment of no more than $x and asked what the mortgage/taxes/etc would be in order to end up there. Banks do not take into account your lifestyle (do you like to go out to dinner, do you like to go on vacation, do you have hobbies that cost money, etc)
That's exactly what I have. I was just wondering what type of mortgage with taxes I'd be looking at in the $2,000/month range. I'm thinking $2,500 the most.
Message edited 12/30/2013 9:08:12 PM.
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| Posted 12/30/13 8:43 PM |
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jessnbrian
Only God knows His plan for us
Member since 4/13 7238 total posts
Name:
Jessica
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Re: Can someone help me figure out what kind of house I can afford?
Posted by Teach723
Posted by Mara1017
You should sit down and prepare a spread sheet with all of your expenses and your after tax income and figure out what amount you can pay and live comfortably. When I bought my house the bank told me that I would be preapproved for ALOT more than I was comfortable spending. I wanted to make sure that I would not be house poor. I wanted to still be able to save money so that my family can go on vacation. So we went to the mortgage broker and told him that we wanted to have a payment of no more than $x and asked what the mortgage/taxes/etc would be in order to end up there. Banks do not take into account your lifestyle (do you like to go out to dinner, do you like to go on vacation, do you have hobbies that cost money, etc)
That's exactly what I have. I was just wondering what type of mortgage with taxes I'd be looking at in the $2,000/month range. I'm thinking $2,500 the most.
You would be looking at a mortgage around 4% interest for UNDER $300k mortgaged and around $8k in taxes annually. Not impossible, but very difficult right now, it's a sellers market again, there are that many more buyers than sellers, and a lot of people are getting into bidding wars for houses. It sounds like finances are tight, so definitely look for a house with GAS heat instead of oil, that can add an additional $1k at least annually.
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| Posted 12/30/13 11:02 PM |
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Teach723
Have faith. Believe. Dream.
Member since 8/10 2356 total posts
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Re: Can someone help me figure out what kind of house I can afford?
Posted by jessnbrian
Posted by Teach723
Posted by Mara1017
You should sit down and prepare a spread sheet with all of your expenses and your after tax income and figure out what amount you can pay and live comfortably. When I bought my house the bank told me that I would be preapproved for ALOT more than I was comfortable spending. I wanted to make sure that I would not be house poor. I wanted to still be able to save money so that my family can go on vacation. So we went to the mortgage broker and told him that we wanted to have a payment of no more than $x and asked what the mortgage/taxes/etc would be in order to end up there. Banks do not take into account your lifestyle (do you like to go out to dinner, do you like to go on vacation, do you have hobbies that cost money, etc)
That's exactly what I have. I was just wondering what type of mortgage with taxes I'd be looking at in the $2,000/month range. I'm thinking $2,500 the most.
You would be looking at a mortgage around 4% interest for UNDER $300k mortgaged and around $8k in taxes annually. Not impossible, but very difficult right now, it's a sellers market again, there are that many more buyers than sellers, and a lot of people are getting into bidding wars for houses. It sounds like finances are tight, so definitely look for a house with GAS heat instead of oil, that can add an additional $1k at least annually.
Yeah, I guess that sounds about right. I think I'll also head to the bank to talk to someone, but like many of you said, they don't really know how much we spend. Can't believe how the market has changed since we first started looking 2 years ago. I guess I'll have to get myself an agent if I really want to find something affordable and nice at this point. Thanks everyone for your input!
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| Posted 12/30/13 11:20 PM |
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jessnbrian
Only God knows His plan for us
Member since 4/13 7238 total posts
Name:
Jessica
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Can someone help me figure out what kind of house I can afford?
Good luck - it's never easy no matter when you are looking. And it's good to have an idea of what you feel comfortable spending... Could we have spent more $$? Sure, but we like to go out, do nice things, take trips... And we like to have nice things, including a nice house... It's taking us a little bit, but by the spring we're going to have a dream kitchen and dining room.... And we're going to see les mis opening weekend, and billy Joel in June... There is no way we could be doing all of this if we had paid more for the house. [i guess my DH really knows what he's doing - he convinced me to buy this home.]
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| Posted 12/30/13 11:59 PM |
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ISpoilHim
I think I got this
Member since 11/10 1523 total posts
Name:
K
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Can someone help me figure out what kind of house I can afford?
We bought a house in Holbrook last year. We put about 25% down. Our P&I is about 800 a month, and taxes are about 850 a month (yes more for taxes than P&I) so our total payment is about 1700 a month. This is about $100 more a month than we were paying when we rented. We have a 4/5 BR 3 BA expanded ranch. We have an extremely low interest rate and that does help.
Oil heat adds about $2500 -$3000 a year. LIPA is about the same as it was when we lived in the apartment. We stayed on the conservative side when we bought. I did not want to overextend
us. We told the bank and REA that we needed to keep our monthly payment within $250 of what we paid in rent.
When we were looking in the Holbrook area, the 3BR houses we looked at started at about $279K.
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| Posted 12/31/13 11:42 AM |
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evenedan
Need a little sunshine
Member since 9/05 3843 total posts
Name:
D
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Re: Can someone help me figure out what kind of house I can afford?
I just wanted to add in that you should also think about your future plans as far as kids and childcare goes (assuming you don't already have kids). We spent a lot less on our home than we could have and at times I wondered if we should have gone for "more" house, but now that we have a kid in daycare and will possibly have another one at some point, I am SO grateful we bought on the low end of our budget! Daycare is like having a second mortgage!
Message edited 12/31/2013 9:39:33 PM.
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| Posted 12/31/13 9:38 PM |
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Re: Can someone help me figure out what kind of house I can afford?
Posted by evenedan
I just wanted to add in that you should also think about your future plans as far as kids and childcare goes (assuming you don't already have kids). We spent a lot less on our home than we could have and at times I wondered if we should have gone for "more" house, but now that we have a kid in daycare and will possibly have another one at some point, I am SO grateful we bought on the low end of our budget! Daycare is like having a second mortgage!
This is so important.
I am friends with someone who is a SAHM and this is why they went the short-sale route, as stressful as it is.
I also know some people who need to do the SAHM thing out of necessity because their income would either support a house or daycare so have gone less on the house.
Some even try to find something they could afford on one income, which I believe is not necessarily realistic here on LI.
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| Posted 1/1/14 8:26 AM |
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Re: Can someone help me figure out what kind of house I can afford?
Posted by MorningCuppaCoffee
Posted by evenedan
I just wanted to add in that you should also think about your future plans as far as kids and childcare goes (assuming you don't already have kids). We spent a lot less on our home than we could have and at times I wondered if we should have gone for "more" house, but now that we have a kid in daycare and will possibly have another one at some point, I am SO grateful we bought on the low end of our budget! Daycare is like having a second mortgage!
This is so important.
I am friends with someone who is a SAHM and this is why they went the short-sale route, as stressful as it is.
I also know some people who need to do the SAHM thing out of necessity because their income would either support a house or daycare so have gone less on the house.
Some even try to find something they could afford on one income, which I believe is not necessarily realistic here on LI.
I agree with this - I bought my house in 2008 when I was working at a top Manhattan law firm, where I knew I likely wouldn't stay forever. So we spent about half of what we were preapproved for, I had a child, left my law firm job in 2010 to start my real estate business, and the rest is history! But that would not have been possible if we hadn't thought and planned ahead and left ourselves a cushion when buying our house.
But just because a lender will likely approve you for more than you want to spend, doesn't mean you should avoid talking to a lender. First of all, online mortgage calculators are not accurate in the sense that, if you are getting an FHA loan, or putting down less than 20% with a conventional loan, it won't calculate pmi. Second, interest rate matters to the payment, and the rate you can get depends on the loan type and your own qualifications. Lenders "lowest advertised rates" are often for 15 year loans or for ARMs, or other loan products you wouldn't or couldn't get.
So my best advice is go consult with a loan officer... the ones I recommend will sit down and go over everything with you, including monthly payment. So assuming you can be preapproved for an amount, you want to ask them, "If I buy a house at that amount, what will it cost me per month?" and then break down that number -- what are they assuming for property taxes? what is the interest rate they are assuming? insurance? pmi? If it's way out of your comfort zone, then find out a ballpark of where you need to be for the $2000/month payment or whatever you want to spend.
Of course, there are a lot of factors, but if my clients are on the fence about whether a house is affordable, or if they can afford to up their offer, we will go back to the loan officer and have him or her run the numbers on where that will leave the monthly payment.
The right loan officer will be able to do this for you. It's invaluable info for you to have as a buyer, and for you to give your realtor.
At the very least, you will get a handle on whether you CAN buy now, and what is realistic for you -- some of my buyers start out thinking they will buy a house in Nassau, but after talking to a loan officer, wind up buying a house in Suffolk, or a condo.
You will get a ton of advice from people, but the best thing you can do is talk to professionals who can evaluate your situation and help you make the best choices. Believe me, the best mortgage loan officers and realtors are not trying to get you in over your head... they will to guide you through the process so you can be financially comfortable with the choices you make. But step one for you has to be getting more concrete info. Some people - even those with good income and money saved - have obstacles to even getting a mortgage, so you need to find out what the deal is and then get a plan together, and that's what a good mortgage person can assist with!
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| Posted 1/1/14 12:34 PM |
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Teach723
Have faith. Believe. Dream.
Member since 8/10 2356 total posts
Name:
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Re: Can someone help me figure out what kind of house I can afford?
Posted by Century 21 Dallow - Christine Braun
Posted by MorningCuppaCoffee
Posted by evenedan
I just wanted to add in that you should also think about your future plans as far as kids and childcare goes (assuming you don't already have kids). We spent a lot less on our home than we could have and at times I wondered if we should have gone for "more" house, but now that we have a kid in daycare and will possibly have another one at some point, I am SO grateful we bought on the low end of our budget! Daycare is like having a second mortgage!
This is so important.
I am friends with someone who is a SAHM and this is why they went the short-sale route, as stressful as it is.
I also know some people who need to do the SAHM thing out of necessity because their income would either support a house or daycare so have gone less on the house.
Some even try to find something they could afford on one income, which I believe is not necessarily realistic here on LI.
I agree with this - I bought my house in 2008 when I was working at a top Manhattan law firm, where I knew I likely wouldn't stay forever. So we spent about half of what we were preapproved for, I had a child, left my law firm job in 2010 to start my real estate business, and the rest is history! But that would not have been possible if we hadn't thought and planned ahead and left ourselves a cushion when buying our house.
But just because a lender will likely approve you for more than you want to spend, doesn't mean you should avoid talking to a lender. First of all, online mortgage calculators are not accurate in the sense that, if you are getting an FHA loan, or putting down less than 20% with a conventional loan, it won't calculate pmi. Second, interest rate matters to the payment, and the rate you can get depends on the loan type and your own qualifications. Lenders "lowest advertised rates" are often for 15 year loans or for ARMs, or other loan products you wouldn't or couldn't get.
So my best advice is go consult with a loan officer... the ones I recommend will sit down and go over everything with you, including monthly payment. So assuming you can be preapproved for an amount, you want to ask them, "If I buy a house at that amount, what will it cost me per month?" and then break down that number -- what are they assuming for property taxes? what is the interest rate they are assuming? insurance? pmi? If it's way out of your comfort zone, then find out a ballpark of where you need to be for the $2000/month payment or whatever you want to spend.
Of course, there are a lot of factors, but if my clients are on the fence about whether a house is affordable, or if they can afford to up their offer, we will go back to the loan officer and have him or her run the numbers on where that will leave the monthly payment.
The right loan officer will be able to do this for you. It's invaluable info for you to have as a buyer, and for you to give your realtor.
At the very least, you will get a handle on whether you CAN buy now, and what is realistic for you -- some of my buyers start out thinking they will buy a house in Nassau, but after talking to a loan officer, wind up buying a house in Suffolk, or a condo.
You will get a ton of advice from people, but the best thing you can do is talk to professionals who can evaluate your situation and help you make the best choices. Believe me, the best mortgage loan officers and realtors are not trying to get you in over your head... they will to guide you through the process so you can be financially comfortable with the choices you make. But step one for you has to be getting more concrete info. Some people - even those with good income and money saved - have obstacles to even getting a mortgage, so you need to find out what the deal is and then get a plan together, and that's what a good mortgage person can assist with!
Thank you all for your advice. We did sit down with someone from TFCU about a year and a half ago who helped us figure all that out. Obviously interest rates have gone up a bit and our income has gone down. Just wanted to see if anyone could help me figure out some real numbers in terms of costs of really having a house month to month. Although we're in a condo now I can imagine those costs will go up. Thanks to all who have helped out. My dad always said if you put it down on paper it'll never work. I'm starting to see some truth to that. Thanks again everyone!
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| Posted 1/1/14 1:43 PM |
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LIMomma
LIF Adolescent
Member since 6/12 523 total posts
Name:
Momma
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Can someone help me figure out what kind of house I can afford?
I would sit down with a non profit like the CCC. http://www.hud.gov/utilities/intercept.cfm?http://www.cdcli.org
They will give you worksheets and classes to help make the best decision without being tied to commission or real estate sales --- and it's free
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| Posted 1/1/14 2:30 PM |
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ShhhTTCin11
3 under 3?!
Member since 5/11 2229 total posts
Name:
Coleen
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Can someone help me figure out what kind of house I can afford?
I would think with $140k salary, you guys should be able to afford a house, at least in the high 300's, unless your student loans are really high. I'd really go through my spending and see where your money is going. Can you cut back on anything? Either way, I'd go to a mortgage loan officer and see what they say you can afford in your budget (whether it be $2k a Month or $2,400).
Good luck!
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| Posted 1/1/14 9:04 PM |
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JDubs
different, not less
Member since 7/09 13160 total posts
Name:
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Re: Can someone help me figure out what kind of house I can afford?
Posted by ShhhTTCin11
I would think with $140k salary, you guys should be able to afford a house, at least in the high 300's, unless your student loans are really high. I'd really go through my spending and see where your money is going. Can you cut back on anything? Either way, I'd go to a mortgage loan officer and see what they say you can afford in your budget (whether it be $2k a Month or $2,400).
Good luck!
ITA
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| Posted 1/2/14 10:01 AM |
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jessnbrian
Only God knows His plan for us
Member since 4/13 7238 total posts
Name:
Jessica
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Re: Can someone help me figure out what kind of house I can afford?
Posted by ShhhTTCin11
I would think with $140k salary, you guys should be able to afford a house, at least in the high 300's, unless your student loans are really high. I'd really go through my spending and see where your money is going. Can you cut back on anything? Either way, I'd go to a mortgage loan officer and see what they say you can afford in your budget (whether it be $2k a Month or $2,400).
Good luck!
I agree, however, what you "should" be able to afford and what you are "comfortable" spending are two different things. DH and I could have definitely AFFORDED to spend another $100-150K on our house, but we didn't feel comfortable spending it... and for us it worked out, we pay extra every month to our principle and we are set to pay it off in well under 30 years, and hopefully retire in our 50's because we're able to max out our retirement contributions now.
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| Posted 1/2/14 10:29 AM |
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ShhhTTCin11
3 under 3?!
Member since 5/11 2229 total posts
Name:
Coleen
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Re: Can someone help me figure out what kind of house I can afford?
Posted by jessnbrian
Posted by ShhhTTCin11
I would think with $140k salary, you guys should be able to afford a house, at least in the high 300's, unless your student loans are really high. I'd really go through my spending and see where your money is going. Can you cut back on anything? Either way, I'd go to a mortgage loan officer and see what they say you can afford in your budget (whether it be $2k a Month or $2,400).
Good luck!
I agree, however, what you "should" be able to afford and what you are "comfortable" spending are two different things. DH and I could have definitely AFFORDED to spend another $100-150K on our house, but we didn't feel comfortable spending it... and for us it worked out, we pay extra every month to our principle and we are set to pay it off in well under 30 years, and hopefully retire in our 50's because we're able to max out our retirement contributions now.
I agree that's why I said what they can afford with their monthly budget  not what they would necessarily get approved for.
So many little things pop up, you should definitely give yourself wiggle room. If its helpful, I can send you our monthly breakout of expenses vs. income, so you can see what our bills really look like.
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| Posted 1/2/14 11:06 AM |
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