Trying to figure out if I can swing buying a house

I am sorry for yet another silly question but you all seem to know your stuff with regards to this house thing. I am trying to be realistic in buying a house. Without giving away personal information what is a good combined salary that a couple needs to make in order to live in LI? Right now we have about $50,000 and are looking at houses in the 400,000 450, 000 range. What do you think our combined salaries should be. We also have a baby on the way. I am sorry to be asking these questions I just need honest opinions.

Re: Trying to figure out if I can swing buying a house

your mortgage payment should be no more than 30% of your gross monthly income

Message edited 7/20/2006 2:39:33 PM.

Re: Trying to figure out if I can swing buying a house

Well - if you were to buy a 425,000 house - you would want to put down 42,500. Figure closing costs would be about $10k so you would need to save up a little bit more than that just to be able to afford the costs associated with the house. Also, this would leave you no money in savings, which could be hard.

With these numbers - your monthly mortgage payment would be about $2500 (at 6.75%), plus figure another $700 for taxes. That brings you up to $3200. then you need to determine how much extra you need for spending money and expenses. I would say $2500 extra would be a good amount - but depending on your situation (car payments, student loans, insurance, lifestyle, etc) you may be able to do it on more or less.... I think your pretax income, combined, would need to be about $110k.

I think I would also save up a little more if you can, prior to purchasing, so that you can put 10% down, and then still have some cushion for the surprise expenses that come along with owning a house.

Someone else will probably be able to provide a much easier answer to this question than i did though!

Re: Trying to figure out if I can swing buying a house

only you know your comfort level with the payment.

If you are putting 10% down on a $400,000 house you are looking at a mortgage payment of about $2800-2900 with taxes with today's interest rates. DOn't forget you need to have $$ for closing costs...between $10-15K.

Think about the other expenses of a home. Oil or gas, landscapers, water, repairs..
I gathered all my expenses together and figured out what was realistic to be left with at the end of the month. That was my mortgage calculator.

Re: Trying to figure out if I can swing buying a house

Re: Trying to figure out if I can swing buying a house

A $400,000 loan at 6.875% over 30 years is $2655 a month. If property taxes are $8K, add $666 per month. and insurance, say $1200 a year, is $100 a month.

That results in a payment of $3,421.

Monthly income would have to be $11,403 (30% would be the $3,421), annually that is about $136K.

Re: Trying to figure out if I can swing buying a house

Like said its really what you are comfortable with.

DH and I financed 103% of our mortgage, put the bare minimum down since we wanted money for renovations.

Our combined income without me working is less than 100,000.

I won't be working for a few months since I am due in 5 weeks.

However, we are renting out the upstairs to his brother since we won't need it right away and are getting $900 a month.

Still with that income we are under 100,000 and will be able to swing it. It may be tight at times, but honestly it isn't worth paying 2,000 a month rent with a baby on the way and two big dogs.

Message edited 7/20/2006 3:00:00 PM.

Re: Trying to figure out if I can swing buying a house

Re: Trying to figure out if I can swing buying a house

Re: Trying to figure out if I can swing buying a house

you really have to sit downa and figure everything out. remember gross income is not what you are taking home each week - so I don't really consider that a good way of figuring out things.
We were in the same situation as you and sat down with a mortgage broker to see what actual payments would be. The number he came up with - the bank would be willing to give us the mortgage - but we knew that it would not be a realistic number for us with the other expenses we have each month. It was very disappointing for us, but now we know what we have to do in order to be able to buy a house in (hopefully) the near future.
We were told on a $300,000 house and financing everything (including closing costs) and including the ins. payments, taxes, etc, our monthly payment would be about $2500.

Re: Trying to figure out if I can swing buying a house

Message edited 7/20/2006 3:30:15 PM.

Re: Trying to figure out if I can swing buying a house

Oh god, this is a lot of work. LOL. Im just an elementary teacher and so not used to all this financial talk. I think my best bet is to sit with a mortage broker and get it all settled. Thank you all so much for you thoughts, I truly appreciate it all.

Re: Trying to figure out if I can swing buying a house

I can tell you what our payments will be - we are in contract now.

Price $390,000
Downpayment - $50,000
Taxes - $8,200
Insurance - $85
Closing Closts - $13,000
Interest rate - 6.75

Our payment with mortgage, taxes and insurance will be $3,100 a month. Good luck!

ETA: Combined gross income is $124,000.

Message edited 7/20/2006 3:42:25 PM.