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DiamondGirl
You are my I love you
Member since 7/09 18802 total posts
Name:
DiamondMama
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How much of a morgage can you afford...
I am curious.
Let's say a couple makes 150k. They want a house that has 10k taxes a year.
How much of a mortgage do you think they can afford?
I know this depends a lot on their debt..let's assume that they dont have ANY.
Just curious..TIA
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Posted 10/26/09 9:42 AM  |
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headoverheels
s'il vous plaît
Member since 6/07 42079 total posts
Name:
LB
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Re: How much of a morgage can you afford...
depends on the lifestyle they want.
DH and i have a large mortgage because we wanted a house where we would have to do very little work. we don't need "extras" (money for lots of shopping or vacations) and we would prefer to spend it on getting the house we wanted.
it also depends on other expenses - car payments, insurance, day care...
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| Posted 10/26/09 9:44 AM |
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MrsFlatbread
Skinny jeans are in my future
Member since 6/06 10258 total posts
Name:
Baby Momma
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Re: How much of a morgage can you afford...
Okay, that's $833 in taxes per month alone.
With that said...think about $600 per 100,000 you need to borrow...
If you put 100,000 down on a $400,000 house, that's $1800 for the mortgage, plus $833 for taxes every month...just to walk in the door...no heat, lights, food, etc...
Message edited 10/26/2009 9:52:44 AM.
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| Posted 10/26/09 9:49 AM |
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Nifheim
allo
Member since 1/09 5476 total posts
Name:
Jennifer
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Re: How much of a morgage can you afford...
i would use a mortgage calculator or get pre-approval. Then factor in lifestyle expenses.
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| Posted 10/26/09 9:50 AM |
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Erica
LIF Adult
Member since 5/05 11767 total posts
Name:
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Re: How much of a morgage can you afford...
A general rule is 28% of your gross salary = $3500/month for mortgage, taxes and insurance.
$100/month - insurance
$1000/month - taxes
$2400/month - mortgage (P&I) = $400K mortgage + down payment (substract 100-200 from mortgage a month if you don't have 20% to put down for PMI = 375K mortgage)
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| Posted 10/26/09 9:58 AM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: How much of a morgage can you afford...
I personally wouldn't go past 28% of your gross salary regardless of how much you make.
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| Posted 10/26/09 11:05 AM |
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headoverheels
s'il vous plaît
Member since 6/07 42079 total posts
Name:
LB
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Re: How much of a morgage can you afford...
Posted by ave1024
I personally wouldn't go past 28% of your gross salary regardless of how much you make.
it's funny that you and the PP mentioned 28% - is this a figure that banks use? i've never heard of it, but it's right on the nose for me and DH (not counting his overtime).
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| Posted 10/26/09 11:59 AM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: How much of a morgage can you afford...
Posted by headoverheels
Posted by ave1024
I personally wouldn't go past 28% of your gross salary regardless of how much you make.
it's funny that you and the PP mentioned 28% - is this a figure that banks use? i've never heard of it, but it's right on the nose for me and DH (not counting his overtime).
Yes it is pretty much the debt to ratio lending standard used.
No more than 28% of your gross salary should go towards "housing" - which includes P+I, Taxes, Insurance, etc.
They also say that no more than 38% (or something around there) should go towards total debt. So thats your housing, plus any car payments, student loans, CC debt, etc.
These are lending guidelines, nothing written in stone.
When I spoke to a BOA rep, they said they were willing to lend up to 50% DTI which I felt was a little crazy. But that's just my opinion.
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| Posted 10/26/09 12:27 PM |
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Sparkyandang
LIF Adolescent
Member since 5/08 766 total posts
Name:
Ang
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Re: How much of a morgage can you afford...
Definitely depends on other expenses, like commuting, car loan etc .
I'd guess about $400k mortgage.
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| Posted 10/26/09 1:32 PM |
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headoverheels
s'il vous plaît
Member since 6/07 42079 total posts
Name:
LB
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Re: How much of a morgage can you afford...
Posted by ave1024
Posted by headoverheels
Posted by ave1024
I personally wouldn't go past 28% of your gross salary regardless of how much you make.
it's funny that you and the PP mentioned 28% - is this a figure that banks use? i've never heard of it, but it's right on the nose for me and DH (not counting his overtime).
Yes it is pretty much the debt to ratio lending standard used.
No more than 28% of your gross salary should go towards "housing" - which includes P+I, Taxes, Insurance, etc.
They also say that no more than 38% (or something around there) should go towards total debt. So thats your housing, plus any car payments, student loans, CC debt, etc.
These are lending guidelines, nothing written in stone.
When I spoke to a BOA rep, they said they were willing to lend up to 50% DTI which I felt was a little crazy. But that's just my opinion.
okay, thanks for the info - it actually makes me feel better that we meet those guidelines!
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| Posted 10/26/09 2:31 PM |
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itsbabytime
LIF Adult
Member since 11/05 9644 total posts
Name:
Me
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Re: How much of a morgage can you afford...
I would say it depends alot on how much savings you have and how much you intend to put for a down payment.
For ex. even if your salary is $150,000 if you have enough savings to put down say $300,000 down payment then you can afford more than a $400,000 house.
Message edited 10/26/2009 2:41:48 PM.
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| Posted 10/26/09 2:39 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: How much of a morgage can you afford...
Posted by itsbabytime
I would say it depends alot on how much savings you have and how much you intend to put for a down payment.
For ex. even if your salary is $150,000 if you have enough savings to put down say $300,000 down payment then you can afford more than a $400,000 house.
That's why you use the debt to income ratios as a guideline. The DTI calculators don't look at how much the house "is worth". It looks at how much you are borrowing.
So if you make 150k, they don't want to see more than 3500 a month going towards housing payments.
Now if you have more to put down like you said, you can afford more house. But the ratios typically remain the same.
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| Posted 10/26/09 2:55 PM |
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MrsFlatbread
Skinny jeans are in my future
Member since 6/06 10258 total posts
Name:
Baby Momma
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Re: How much of a morgage can you afford...
Posted by ave1024
Posted by itsbabytime
So if you make 150k, they don't want to see more than 3500 a month going towards housing payments.
.
Honestly, i would think on this salary, you would want your mortgage and taxes to be much less...
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| Posted 10/26/09 3:19 PM |
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8ternity
<3
Member since 11/08 10586 total posts
Name:
Formally NYPD-Wife
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Re: How much of a morgage can you afford...
for us we can afford a $300,000 mortgage which will be approx $2,500 a month with prop tax...we also have a good down payement amount...
it also depends on the interest rate that you lock into.
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| Posted 10/26/09 4:43 PM |
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