Mortgage payment.

Okay so this is a personal question but for all of you who dont mind I will really appreciate it.

My fiance and I have credit card payments, student loans ($1500 a month), car loans ($895 and $475) and all our other personal expenses (gas, food, ect.) So my question is, if you are like me (a regular person with plenty of bills) how the heck can you afford to live on L.I. and have a $3000-$4000 housing payment (mortgage,taxes, insurance). I just dont get it. And my FH makes GREAT money...by far better than most our age. But I just dont get it. I know that to some owning a house is more important that having nice cars, going on vacation, ect. and to a point I agree. I mean a house appreciates in value while a car depreciates in value. But at the same time you only have one life to live an I just cant see myself driving a old car and not taking vacations just to afford a house. How do you do it? If your house payment is $3000 do you have money left over to enjoy life?

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Our mortgage payment is around that but our car and credit card payments are not nearly that high. You have amost $1500 in car payments on top of $1500 in credit card/student loans. On top of that, with owning a house you have to factor in the other household expenses which can run another $500+. I drive a Lexus SUV which we bought before the house. But now I realize we dont need another car like that and dont want another car payment like that ever. When you own a house sometimes you have to give up on some of the "material" things.

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It can be done. Both my husband and I make good money, he makes more than I do and makes almost double of what the majority of his friends make. We have 2 cars--1 which we lease ($361) and the other car my husband bought outright and he paid off before we got engaged. I have student loans that amount to $1000 each month. We have credit card bills to an dwe make it work. There are some months that are harder then others but we have learned to sacrifice to have a home-which we love. we still go on vacation and drive one nice car--it is an '07 nissan altima. My husband really wants a bmw 530 and we have decided that it might be our next car when this lease is up but if we want something else we will get a different car. You can drive a new car that doesn't cost almost 900 a month--that could be your taxes & insurance every month. You can afford to live here you just have to evaluate your expenses and determine if they are really necessary or if you would rather have htem then a house. My feeling is that one day I might have the bmw that we want but if we don't at least we have our house :)

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We did it by saving up a lot for our down payment to keep our mortgage payment down. We also do not use credit cards, only American Express. We have 2 cars but one of them is paid off and the other is less than $400. It's possible!

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Our mortgage is not quite that high but we have one child in college and another going in a few years so we put signifigant funds toward that. We are also big savers & we would rather save than spend. We bought a very moderatly priced house so our mortgage could be lower.
Our combined income is on the higher end for our area, but my DH still does side work in his slow season, I work at a craft store on my days off to make a little mad money & I have a consulting business. We don't NEED to do these things but we do, we hustle now while we're young so we can have a very comfortable life later.
I drive an eight year old car we've had since it was new, DH drives a 6 year old truck we also bought new. We don't lease & we keep our vehicles long term to maximize what we invested when we bought them. I'm buying a new car in the new year but I'm buying a hybrid. No offense but I would NEVER spend $800+ a month for a car. I grew up in the car business & to me there just isnt any vehicle out there that is worth that much for the working class person.
We do love traveling but have not taken signifigant trips in a couple of years mostly because of work related issues & vacation time not lining up. We've use our vacation money for improvements to the house instead-so worth it. We entertain very often & have house guests so we don't feel like we are sacrificing when it comes to having fun, its awesome to have our house known as the party/holiday house.
I don't need tons of fashionable clothes, I'd prefer a smaller wardrobe of high quality stuff. I still buy $$$ pocketbooks if there is one I really love.
You & your DH need to be in a place where you are ready to go to the next chapter & re-prioritize. I've seen it happen to gals around here over the years. Plenty of people said they would never sacrifice, but I've "seen" the change in them or they didn't know HOW they sacrifice & they do.

Good luck to you!!!

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Our mortgage bill is under $3K for our colonial and it includes our taxes and homeowner's insurance policy.

It's possible, you have to make some sacrifices.

Speak to a mortgage person - bank or broker, and they can break everything down for you!

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Our mortgage payments are also under $3000 - and that includes mortgage, taxes, HELOC and insurance.

I would suggest that you seriously look at your car payments and your student loan payments. Can you consolidate the student loans? That seems like a huge amount of money to be paying every single month.

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We drive a Honda and a Ford (don't really have a desire for a luxury car until we can *really* afford it) and we haven't taken a real vacation in a while. Not that we couldn't, it's just we've put the money into our home instead.

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Posted by PotofLuck06

Our mortgage bill is under $3K for our colonial and it includes our taxes and homeowner's insurance policy.

It's possible, you have to make some sacrifices.

Speak to a mortgage person - bank or broker, and they can break everything down for you!

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You afford things on LI by living beneath your means. My DH and I make very good money. We don't live like we do, though. That's the key. You need to live BENEATH your means to be financially independent. We drive one car that is paid for and one car with car payments under $500 a month. We bought a house we can MORE than afford easily and put a good downpayment down. Our mortgage payments are under $2,000 per month (excluding taxes which we pay separately). Our taxes (if broken out separately) would be under $700/mo. We also have my student loans (over $700/mo). We paid off all our credit card debt BEFORE buying a house and don't use them anymore. Honestly, if your credit card payments are that high, it's time to pay off those cards and live off what you are bringing in, not credit. Regardless, we have put things on our credit cards, but we always are able to pay the balances in full each month if we so choose. We also have two horses that we pay monthly board and expenses on, as well as periodic vet vills, supplements, lessons, etc. We save several thousand each month on top of this, too.

It sounds harsh, but you need to decide what is important to you and make drastic changes if you want to be able to afford a house. You also need to be realistic about how much house you can REALLY afford. And afford to me means COMFORTABLY afford - this means you can cover your bills, extras, emergencies, and put away money into savings. In this housing market, I think people are crazy to buy with less than 10% down. Really, you should put 20% down. And you REALLY need to realistic about the price of a home you can afford. I'd have loved a $650,000 and could have purchased one if REALLY wanted it - but I like being able to comfortably afford my bills, having plenty of money left over for savings or emergencies, and not having to worry about what would happen if one of us lost our job and were out of work for a little while.

If you want honest opinions, I think you need to substantially pay down your debt before even thinking about buying a house. Likely, your CC payments and your car payments are carrying the highest interest rates. I'd pay those down as much as possible - eliminating the CC debt and paying down some of the car debt (or consider getting a more affordable car). That's a trade off you may need to make if you want to purchase a home. If you have private student loans, I'd consider paying those down. I'd leave any consolidated loans alone b/c the interest rate is probably below 5%.

Start tracking your expenses every month. You don't need fancy software - you can just use excel. Track EVERY SINGLE thing you spend money on for at least 2 - 3 months. You'll quickly see areas where you can cut back.

Ultimately, most of us have a finite amount of money. If having a house means that much to you, you will have to make adjustments in other areas of your life to get a house in the near future. Otherwise, you may want to continue renting for now and purchase in a few years, when you've paid down your debt, earn a little more, and have saved for a larger downpayment.

Owning a house in this area isn't easy. Perhaps starting out with a condo or co-op would be a better idea if you really want to buy, but don't want such high mortgage payments.

Good luck.

ETA - and to answer your question, yes, we do have money left over to have a life. We own two horses (the loves of my life, but certainly a luxury by most standards) We paid for our wedding in cash this year, took a VERY nice 2-week honeymoon in Italy on which we splurged (paid cash), and put tons of money into our new home. We are planning at least one or two vacations next year. One of our cars is brand new. It may not be a Mercedes, but it's top of the line for what it is and we like driving it. We go out with friends, go shopping, and live normal lives. We just don't do anything to excess. Keeping your major expenses low (house, cars, etc.) helps tremendously. We WOULDN'T have a "life" so much if we bought a house outside of a realistic price range and bought luxury cars and tons of "toys" all the time.

On top of this, we SAVE approximately 50% of our take home pretty much every month. (That's more than my husband's entire take home.)

Message edited 11/15/2007 10:00:28 AM.

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is it possible that you can consolidate your credit card payments into the mortgage. Spread out over 30 years it won't amount to much more per month.

Also, consider paying down your credit cards before buying a house. This way, you can afford everythin you want.

We did that first. We paid all of our revolving debt off. When we moved into the house we bought some things and ran up some bills again. We refinanced for a lower rate, consolidated that debt and lowered our mortgage payment.

It sounds like your expenses are high. Consider reducing at least some of them if you want to stay on LI. With expenses like that though, moving out of state won't do any good since your salary most likely will be somewhat less and you would still have the high expenses albeit a lower mortgage.

You don't indicate if you have any savings. If you have a larger downpayment that will significantly drop your monthly nut.

If you are not planning on staying in the house long term, consider a 5 year lock..etc..which will save you money on the interest.

Either way, expenses have to go down. Talk to a financial person and get yourself on track. Good luck.

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I agree with Kara - the key is to live BENEATH your means.

Our mortgage, with taxes and insurance, comes to about $2700 per month (granted, we live in the Philly 'burbs, not LI). We could certainly afford more, but we didn't want any unnecessary stress, so we followed the guidelines, which means our mortgage payments are about 20% of our take home pay so we have enough money every month to pay for everything else, and save.

We also bought a house through an estate sale - the house had GREAT bones, but aesthetically, it was trapped in the 1950's - we paid below market for the house, and made all of the aesthetic renovations ourselves, which saved a LOT of money. We also put down 20% on our house, which cut back on our interest and our monthly payments.

We definitely live below our means as well - we never lease cars, but instead, buy used cars. I have a 2001 Toyota Seqouia that we bought 2 years ago. Dh has a 2001 Subaru outback that we bought 3 years ago. There's just no sense in buying a brand new car considering all the depreciation. We also purchased the cars on 0% interest cards - we paid no interest, and took our time paying the cars off.

We do go on one or two nice vacations, but at the same time, we don't spend a lot of money on material things. Our expenses each month are fairly low - the highest expense being food, but we cut corners by buying in bulk.

Good luck!

Message edited 11/15/2007 9:24:02 AM.

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I agree with alot of the OPs. Your expenses sound a bit high (but I don't know your current income and things are definitely relative). Are you close to paying off the cars or loans? My friend is buying a house and decided to pay off her car (only $6K left) rather than put that money towards a down payment and freed up $300/month. That could significantly reduce your monthly payments. Also, you should probably pay off your credit cards as much as possible b/c that will be harder to pay off when you own a home and have even more expenses.

I am currently house hunting and we are looking below our means as well. This way we have $ left over to have a life, a savings and be able to do any upgrades to the house that we want. It's hard, and I have to constantly remind DH that it would be nice having that $100K more house, but we would rather have nice cars, vacations and a savings account. It's all a personal decision.

And as other posters said, put down as much $ as you can. If you want to buy a house, you need to sit down with your finances and develop a plan. DH and I did this right after our wedding and it's taken us over a year to get to this point but it was worth the wait.

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I couldn't afford a $3k-$4k mortgage payment (including taxes and insurance) each month and still be able to live as comfortably as I would like to.

Because of this, we found a less expensive house that we could afford. It needed some work and we'd like to expand it someday but, it is perfect for now and has the potential to be perfect in the long run.

We currently drive 10 and 11 year old cars that have been paid off. We don't carry a balance on our credit cards (unless they are 0% interest). We are able to go on vacation each year and go out when we want to.

The key is to prioritize. Yes, it would be great to drive a new car but, I really don't drive that far since I take the train into the city so I can't justify that expense. We would like new furniture for our house but, we're prioritizing what we need more and waiting.

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Prioritize.

If a nice car and vacations are your priority, then unless your income can afford it it will be very difficult to include a house in those plans.

In order to see if we could afford a house, we made sure we paid down our CC to a manageable amount each month. We also paid off one of our cars as well as made sure that we had money left over to go into savings.

Vacations are not a priority to us. Cars are not either as long as they are in good condition.

Good luck. It's not easy at all but it's worth it.

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Message edited 1/30/2009 10:05:37 PM.

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where are you guys living now?

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Our mortgage payment is less than the numbers you mentioned. We bought a smaller house further east that we could afford.
We only have one car. We limit our spending. We don't go on vacations, but we eat out once a week. (used to be a lot more)
Yes we have made sacrifices to own a house, but it will be worth it in the long run. IN the future we will make more money and the mortgage payment won't be so much of our income.
You have to decide what your priorities are. If have fancy cars, eating out, shopping a lot, and taking vacations is a lifestyle you enjoy and cannot afford it while paying a mortgage, then maybe owning a home right now is not the right thing for you to do.

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I find the "you only live once" spending philosophy to be very flawed. You may only live once, but don't you want to live a life where you're not constantly worrying about money? Where you can retire when you want to? Where you can pay for an emergency if it pops up? Where you aren't burried under CC bills every month?

I don't think that if I died tomorrow, I'd be thinking, "Damn, should have bought that 700 series BMW when I was 25" or "Why didn't I buy that $500 pocketbook?" But if I live to be 100, I think I'll be glad I sacrified a little bit (not even that much) for financial security in the long run.

It's not about depriving yourself of everything -- it's about determining what is important to you and making that work within your budget. If it's ALL important to you, then prioritize. Cut out those low on the priority list. Priority lists are different for everyone. Not everyone feels the need to own a home, and that's fine, especially in the NY-Metopolitan area where taxes are sky high. Just know that chances are you can't have it ALL -- so decide what you want most and go from there.

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I agree with the living beneath your means theory. DH and I are just about to move into our first house and here is what we did.

We saved aggressively for our wedding (over 50% per month of our combined income) and were able to save the money fairly quickly for it. Once we accumulated the money needed for the wedding, we continued to save as agressively but only for the house. (we were used to living without that money being accessible by then) Think of that as gone money. I put it into an ING account because it takes a few days to get it out so it's not immediately available. We cleared all our debt as well. Luckily neither of us had school loans.

We've been together a long time (8 years) and went from making no money to good money together. Our income went up at a mugh higher rate then our life style. I drove a used hyundai until 2 years ago, DH had a used Saturn.

The car loans sound a bit high...we have two BMW's, an X5 and a 325xi and combined the payments are a little over $800 per month. We put a lot down, and bought certified pre-owned. Those cars are immaculate and guaranteed, and vastly cheaper than a brand new car. It's funny because I went to my brothers bday party last weekend at a bar in the city. DH and I each ordered a drink and it was $22!! I can't remember the last time I spent that much on a drink, I would say it costs him more to "live" than it does us almost but there isn't much of a return on that.

I think at the end of the day, you want to have a few months of living expenses in the bank (just in case), and you want your income to exceed your expenses so you are constantly putting money away.

HTH!!

Message edited 11/15/2007 3:49:02 PM.

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Well, our mortgage is around $3000 a month, but we currently own one car (though we have city commuting costs). We have no student loans or credit card debt. Before we bought the house, we each went through our monthly expenses, and we agreed to save around 15% of our take home pay each month towards a house (plus we kept all our wedding money for the same). I would say our salaries are good, but nothing exceptional for this area.

We also just don't spend that much on clothing, furniture (though now that we have a house, that may change), jewelry, meals out, or electronics. We don't deprive ourselves, but I don't have lots of designer shoes and bags, and DH doesn't have all the latest state of the art electronic equipment. I'm not saying you guys do these things, but it's something to look at.

I would say to focus paying off your credit cards first, then work on your student loans. Once you have less of these payments to make each month, you can probably put more $$$ towards a house.

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My husband works hard, very hard, otherwise we would be starving. Seriously, he is in sales which allows for our financial situation.

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We bought a nice house in a nice neighborhood and great school district.
Our mortgage pymt is under 3k (tax and home owners included)
We also made sure that after closing, we still had a nice savings (emergency fund). I wouldn't be able to live paycheck to paycheck and worry about making ends meet at the end of each month. Even thought I could, I dont spoil myself the way I did before this house. We have a one year and a 2nd baby due in June. We are more concious on how and what we spend our money on. We dont deprive ourselves, but some things become less important. You'll find a way to make it work. Dont worry