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Teach723
Have faith. Believe. Dream.
Member since 8/10 2356 total posts
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Can someone help me figure out what kind of house I can afford?
We currently have $90,000 saved. I know closing costs will take away from this and I should probably keep some money in the bank as a cushion. DH recently lost his job and is making much less now which has changed things a bit for us. From our current spending and what we make we're only really making an extra $950/month. We're renting a condo for $1300/month right now. I know a house will bring oil bills, electric, etc. I'm thinking we can afford a $2,000/month mortgage which seems so low to me. There goes my dream house.
Realistically though what kind of house am I really looking at here with this type of payment and money to put down? Is 400,000 out of my league? We've been hoping for Holbrook area.
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Posted 12/28/13 6:11 PM  |
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Can someone help me figure out what kind of house I can afford?
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
Message edited 12/28/2013 6:19:24 PM.
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| Posted 12/28/13 6:17 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 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.
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| Posted 12/28/13 6:24 PM |
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Can someone help me figure out what kind of house I can afford?
Your best bet is probably going to be meeting with a mortgage specialist. they'll be able to look at everything, tell you what you can afford and what your payment will be
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| Posted 12/28/13 6:28 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?
Also I'm currently claiming single 0 on taxes. I'm wondering if I should change that so I make more in my pay checks.
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| Posted 12/28/13 6:34 PM |
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Re: Can someone help me figure out what kind of house I can afford?
Posted by mommywantsababy
Your best bet is probably going to be meeting with a mortgage specialist. they'll be able to look at everything, tell you what you can afford and what your payment will be
This - you definitely want to meet with a mortgage loan officer to figure out your options. Your mortgage payment will depend on the type of loan you qualify for and is most advantageous to you (because pmi may be factored in), as well as the interest rate you qualify for. How much you can be approved for will depend on your credit (not just FICO scores but credit history), and debt-to-income ratio.
Speaking to a loan officer at a mortgage lender doesn't cost you anything, and by consulting with someone knowledgeable, you can get a lot of helpful information. Even if you don't qualify now (or can only get less than what you hoped for in terms of a mortgage), a mortgage loan officer can help you come up with a strategy and a specific plan to perhaps get you qualified for more (or at all) in the future. They can advise you on things like credit repair, paying down certain loans and debts, etc. From what you are saying, your income may be an issue.
Also, even if you qualify for a certain amount, you probably don't want to spend that. So if you tell a loan officer you don't feel comfortable paying more than x per month, they should be able to back into a price point you need to stay within factoring in current interest rates, pmi (if you need to pay any), estimating property taxes, etc. Of course, if you have higher property taxes, you can afford less in mortgage payment and vice-versa. Same with homeowners' insurance. I usually tell buyers to estimate about $125-$150/month in insurance, but if you live in a flood zone, for example, it will be more. So there are a lot of factors at play.
Step one is definitely consulting with a mortgage loan officer. There's no downside to doing that, even if you are not ready to buy. Let me know if you need any recommendations!
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| Posted 12/28/13 9:21 PM |
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Re: Can someone help me figure out what kind of house I can afford?
You can also do some research using the calculators on Bankrate.com. I also echo the above comments about going to a mortgage specialist but personally i would do that after you run your own numbers as I have found that many of them may be very liberal with your budget and suggest you would pre-qualify for more than you should feel comfortable spending...not all specialists are like that but you want to be conservative with your estimates...JMHO..my DH was pre-qualified for $350k mortgage a few years ago but he opted to base his budget as if he was only qualified for $300K and it helped because he ended up blowing $25K for unexpected costs like gas boiler repair, appliances breaking, garage organization, et
For ex- it is wise to use 1 spouse's income for the mortgage..your DH currently not employed will be easy since now both of you are forced to budget for housing as if you already had the house...Also, taxes are the big unknown..especially if village taxes are a factor...general rule of thumb is 2.5-3x gross income (HHI : $200K means max house price should be no more than $550K). Look at big picture because interest rates will affect monthly payment anyway (and you will NOT know exactly what the interest rate will be on your loan until 3-30 days prior to closing).
(Sorry for any typos, posting from phone)
Message edited 12/28/2013 11:58:44 PM.
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| Posted 12/28/13 11:51 PM |
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Re: Can someone help me figure out what kind of house I can afford?
We live in an unpopular neighborhood by LIF standards, in a tiny 1950's starter home, put much less down than that and with taxes, our mortgage is a lot higher than $2K a month.
We ALWAYS have something unexpected come up, whether it's with the house or just life expenses......December is the worst between Christmas, bills that come due only this month, visiting and DS birthday.
DH is self-employed and about a year or two after we bought, he had a bad year in business.
We drained our entire joint savings so we could pay our mortgage/taxes.
Only now are we just "starting" to recover from that.
I often feel we should have waited much longer to buy a house.
I know I am not answering your question, but just wanted to give you some food for thought.
P.S. When we were approved for our mortgage, we never would have qualified on just one of our incomes. Too bad because I think it would've been the wake-up call we needed to wait it out a bit.
It is what it is though, and fortunately, the business is back and thriving thanks to Sandy.
Message edited 12/29/2013 8:28:25 AM.
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| Posted 12/29/13 8:26 AM |
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Nifheim
allo
Member since 1/09 5476 total posts
Name:
Jennifer
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Can someone help me figure out what kind of house I can afford?
ita with above. we were approved for a mortgage that seemed low at first, it has RISEN significantly since owning the house due to freaking taxes and we are behind. I work two jobs, can't afford to fix the house. DH lost all of his OT which was normal up until we got the house so it devastated our income. I wish we waited - i wish mortgage companies were more conservative when dishing out mortgages.
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| Posted 12/29/13 10:45 AM |
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MrsG823
Just call me Mommy.
Member since 1/11 5570 total posts
Name:
S
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Can someone help me figure out what kind of house I can afford?
The best thing you can do is consult a mortgage broker. The formula the bank uses to calculate your debt to credit ratio can be different then what the online calculators predict.It sounds like you are not in position to buy right now but it cannot hurt to talk to someone and have them assist you with a plan for the future. Keep in mind that property taxes and homeowner's insurance generally increase each year along with the cost of utilities.
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| Posted 12/29/13 11:05 AM |
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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 MrsG823
The best thing you can do is consult a mortgage broker. The formula the bank uses to calculate your debt to credit ratio can be different then what the online calculators predict.It sounds like you are not in position to buy right now but it cannot hurt to talk to someone and have them assist you with a plan for the future. Keep in mind that property taxes and homeowner's insurance generally increase each year along with the cost of utilities.
The sick thing is between DH and I we make about $140,000 a year pre taxes. And I can't afford a house. It's really ridiculous.
We did see a mortgage broker about 2 years ago. DH was making about $25,000 more and I do feel like they high balled it. They said we could go as high as $425,000. We had $60,000 saved back then. I just wanted to get an idea of some real life situations.
Message edited 12/29/2013 11:23:15 AM.
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| Posted 12/29/13 11:11 AM |
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Re: Can someone help me figure out what kind of house I can afford?
Unfortunately this is Long Island.
And I feel like SO MANY people beat themselves up because they think they are doing something wrong, where in reality, it costs so much to live here, and for the average family, the salaries do not measure up.
It does go up every year too.
I also do side work to have $$$ to put into savings and pay bills that come out of nowhere.
We want to do upgrades and now owe even more to the town because of what the stupid architect submitted on his drawings to the TofB without waiting for us to review everything.
Be prepared for that, too.
You let anyone into your house, you will owe.
No one can convince me otherwise.
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| Posted 12/29/13 12:01 PM |
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Teach723
Have faith. Believe. Dream.
Member since 8/10 2356 total posts
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Re: Can someone help me figure out what kind of house I can afford?
Posted by MorningCuppaCoffee
Unfortunately this is Long Island.
And I feel like SO MANY people beat themselves up because they think they are doing something wrong, where in reality, it costs so much to live here, and for the average family, the salaries do not measure up.
It does go up every year too.
I also do side work to have $$$ to put into savings and pay bills that come out of nowhere.
We want to do upgrades and now owe even more to the town because of what the stupid architect submitted on his drawings to the TofB without waiting for us to review everything.
Be prepared for that, too.
You let anyone into your house, you will owe.
No one can convince me otherwise.
Yeah it really stinks! You think you're doing good for yourself and nope. Things have certainly changed. I thought for sure I'd have a house in my 30's. 
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| Posted 12/29/13 12:08 PM |
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MayBbaby21
Baby no. 3 coming soon!
Member since 6/09 5738 total posts
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Re: Can someone help me figure out what kind of house I can afford?
I agree about sitting down with a mortgage broker. We did that with a family friend. He told us exactly what we could afford and would likely get approved for. DH and I are both self-employed (and my business was less than 2 years old at the time) so the banks were a little annoying to deal with. He kind of streamlined the process.
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| Posted 12/29/13 1:44 PM |
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JandJ1224
Member since 6/06 5911 total posts
Name:
Jannette
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Re: Can someone help me figure out what kind of house I can afford?
I would also suggest talking to a mortgage person who can go over your detailed information with you. It would seem at $140K a year you could afford more than $2000/mo for mortgage payment, that is without knowing your other debts. Your mortgage interest and real estate taxes will be write offs so that's why they use your gross income when qualifying. I highly recommend Pat Marabella with Continental Home Loans. 631-390-6368
[email protected]
Good luck!
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| Posted 12/29/13 1:59 PM |
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olive98
LIF Adolescent
Member since 11/12 791 total posts
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Re: Can someone help me figure out what kind of house I can afford?
Talk to a mortgage broker. Not sure why you think you can't afford a house on your income. Unless you have a ton of debt you definitly can.
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| Posted 12/29/13 3:01 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 olive98
Talk to a mortgage broker. Not sure why you think you can't afford a house on your income. Unless you have a ton of debt you definitly can.
Not a lot of debt. Student loans and a car payment. I do all my bills on an excel file and usually have about the same amount going out every month so I'm just figuring in those typical bills plus the added house utilities and really feel like we're left with $2,000 for a mortgage. Seems so low. Maybe my calculations are off. I guess we'll talk to the bank again. TFCU quoted about $25,000 for closing costs when we met with them 2 years ago. I was floored!
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| Posted 12/29/13 3:05 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 JandJ1224
I would also suggest talking to a mortgage person who can go over your detailed information with you. It would seem at $140K a year you could afford more than $2000/mo for mortgage payment, that is without knowing your other debts. Your mortgage interest and real estate taxes will be write offs so that's why they use your gross income when qualifying. I highly recommend Pat Marabella with Continental Home Loans. 631-390-6368
[email protected]
Good luck!
These write offs could be why I'm low balling it. Maybe we would be able to afford more.
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| Posted 12/29/13 3:07 PM |
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MrsM84
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Member since 2/13 2352 total posts
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Re: Can someone help me figure out what kind of house I can afford?
Posted by Teach723
Posted by olive98
Talk to a mortgage broker. Not sure why you think you can't afford a house on your income. Unless you have a ton of debt you definitly can.
Not a lot of debt. Student loans and a car payment. I do all my bills on an excel file and usually have about the same amount going out every month so I'm just figuring in those typical bills plus the added house utilities and really feel like we're left with $2,000 for a mortgage. Seems so low. Maybe my calculations are off. I guess we'll talk to the bank again. TFCU quoted about $25,000 for closing costs when we met with them 2 years ago. I was floored!
Yes, closing costs are quite expensive. I believe you will need anywhere from 3% - 6% of your total loan amount in cash for closing. Will depend on your lender, the type of loan you are getting, etc. You have a considerable amount in cash already saved, but you don't want to use all $90K as you said in a previous post. If you used $50K for a down payment on a $400K house, you would take a loan out for around $350K. Given the closing cost percentages, you will be spending anywhere from 10,500 (3%) to 21,000 (6%) in closing costs. In a 6% scenario, you would have around $20K left in savings. I have a FANTASTIC mortgage guy if you are interested, FM me!
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| Posted 12/29/13 4:20 PM |
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ElizaRags35
My 2 Girls
Member since 2/09 20494 total posts
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Me
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Can someone help me figure out what kind of house I can afford?
We had a lot less in savings (A LOT), make a significant amount less combined and were approved for $350k. We didn't want to go that high. We did a seller's concession. Our mortgage is under $2500 but has been slowly increasing b/c of taxes. It's not easy but we manage perfectly fine.
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| Posted 12/29/13 10:59 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 ElizaRags35
We had a lot less in savings (A LOT), make a significant amount less combined and were approved for $350k. We didn't want to go that high. We did a seller's concession. Our mortgage is under $2500 but has been slowly increasing b/c of taxes. It's not easy but we manage perfectly fine.
We were in a similar situation. We went in asking to be approved for only$350k even though we knew we would get approved for a whole lot more than that (and our mortgage broker told us that) but $350k mortgage was all we wanted to spends. As it turned out we found an amazing place in Massapequa for an outrageous bargain. Needs work which we are slowly doing, but it's been worth it. The neighborhood is outstanding, Massapequa schools are fantastic, and our taxes are super low compared to the neigboring towns because of the mall and other stores - even though they are way across town. If I were you, I would take a VERY hard look at where your money is going if you think you can only afford $2k per month for the mortgage. I'd say that when all is said and done, after mortgage, taxes, and utilities, we pay about $3k every month... Granted, we put a little extra down on our mortgage every month, but only by $100-200, and for a very long time our combined pretax income was only $110k, $30k less than yours.
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| Posted 12/29/13 11:13 PM |
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Re: Can someone help me figure out what kind of house I can afford?
I do agree with the above poster too about looking at where your $$$ is going.
I also recently set up an account where I figured out exactly how much we owe every month for bills (as well as the amount we want in savings) and have that money directly deposited in there.
The rest goes into a separate account for spending money only.
I have not gone over budget at all since setting up our finances this way.
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| Posted 12/30/13 5:19 AM |
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jessnbrian
Only God knows His plan for us
Member since 4/13 7238 total posts
Name:
Jessica
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Re: Can someone help me figure out what kind of house I can afford?
Posted by MorningCuppaCoffee
I do agree with the above poster too about looking at where your $$$ is going.
I also recently set up an account where I figured out exactly how much we owe every month for bills (as well as the amount we want in savings) and have that money directly deposited in there.
The rest goes into a separate account for spending money only.
I have not gone over budget at all since setting up our finances this way.
This is exactly what we did when we got engaged... We use the joint account for our monthly bills, the rest of my $$ goes to my student loans and savings, DH puts a lot into savings (he makes a butt-load more than me). This has been perfect for us, and this way I always have my own $$ to use and save so I don't have to go into the "joint account" if I want to go out with my friends. Lately, with DH new job, he makes so much more than me that I only put in for the utilities and he takes care of the mortgage, so that I can pay off all of my student loans - which if I calculated correctly, I'll have paid off in a year.
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| Posted 12/30/13 10:09 AM |
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JandJ1224
Member since 6/06 5911 total posts
Name:
Jannette
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Re: Can someone help me figure out what kind of house I can afford?
A large portion of your closing costs is used for escrow of real estate taxes and homeowners. If you are able to put down 20% can you request to pay directly. You wouldn't need as much upfront at closing. As long as you are disciplined you can set up your own monthly escrow account and pay taxes and homeowners directly.
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| Posted 12/30/13 11:20 AM |
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alli3131
Peanut is here!!!!!!
Member since 5/09 18388 total posts
Name:
Allison
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Can someone help me figure out what kind of house I can afford?
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.
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| Posted 12/30/13 12:02 PM |
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