How much house should I buy?

[CogSciGuy]

CogSciGuy, if you could get a loan for $1 million at a PTI of $2500, would you take it?

Sure, probably. Wouldn’t you? If I’m purchasing a property with a PITI of $2500/month, I bet I could rent it out for many multiples of $2500/month.

Or was there a different point you were trying to make?

[CogSciGuy]

20% down is a nice ideal, but life is not always ideal. I would say at todays prices 5% should be a minimum.

Thanks, paramount. I hadn’t explicitly ‘fessed up to my inclination to not hold off until I have the good old fashioned 20% ready. That comment makes me feel less guilty about it.

You make a 120k? I always seem to notice that people on this board state these incredible incomes, and yet in my own life I know very few people who make anywhere near 100k.

Yep. And it’s amazing how little it is, in the face of attempting to purchase a home that doesn’t suck. If you’re expressing skepticism, I guess I can share that. I’ve seen a lot of people glibly dropping big numbers for income that makes me wonder what they do for a living (and why I’m not doing that!)–or whether they’re lying.

[CogSciGuy]

20% down is a nice ideal, but life is not always ideal. I would say at todays prices 5% should be a minimum.

Thanks, paramount. I hadn’t explicitly ‘fessed up to my inclination to not hold off until I have the good old fashioned 20% ready. That comment makes me feel less guilty about it.

You make a 120k? I always seem to notice that people on this board state these incredible incomes, and yet in my own life I know very few people who make anywhere near 100k.

Yep. And it’s amazing how little it is, in the face of attempting to purchase a home that doesn’t suck. If you’re expressing skepticism, I guess I can share that. I’ve seen a lot of people glibly dropping big numbers for income that makes me wonder what they do for a living (and why I’m not doing that!)–or whether they’re lying.

[CogSciGuy]

20% down is a nice ideal, but life is not always ideal. I would say at todays prices 5% should be a minimum.

Thanks, paramount. I hadn’t explicitly ‘fessed up to my inclination to not hold off until I have the good old fashioned 20% ready. That comment makes me feel less guilty about it.

You make a 120k? I always seem to notice that people on this board state these incredible incomes, and yet in my own life I know very few people who make anywhere near 100k.

Yep. And it’s amazing how little it is, in the face of attempting to purchase a home that doesn’t suck. If you’re expressing skepticism, I guess I can share that. I’ve seen a lot of people glibly dropping big numbers for income that makes me wonder what they do for a living (and why I’m not doing that!)–or whether they’re lying.

[CogSciGuy]

20% down is a nice ideal, but life is not always ideal. I would say at todays prices 5% should be a minimum.

Thanks, paramount. I hadn’t explicitly ‘fessed up to my inclination to not hold off until I have the good old fashioned 20% ready. That comment makes me feel less guilty about it.

You make a 120k? I always seem to notice that people on this board state these incredible incomes, and yet in my own life I know very few people who make anywhere near 100k.

Yep. And it’s amazing how little it is, in the face of attempting to purchase a home that doesn’t suck. If you’re expressing skepticism, I guess I can share that. I’ve seen a lot of people glibly dropping big numbers for income that makes me wonder what they do for a living (and why I’m not doing that!)–or whether they’re lying.

[CogSciGuy]

20% down is a nice ideal, but life is not always ideal. I would say at todays prices 5% should be a minimum.

Thanks, paramount. I hadn’t explicitly ‘fessed up to my inclination to not hold off until I have the good old fashioned 20% ready. That comment makes me feel less guilty about it.

You make a 120k? I always seem to notice that people on this board state these incredible incomes, and yet in my own life I know very few people who make anywhere near 100k.

Yep. And it’s amazing how little it is, in the face of attempting to purchase a home that doesn’t suck. If you’re expressing skepticism, I guess I can share that. I’ve seen a lot of people glibly dropping big numbers for income that makes me wonder what they do for a living (and why I’m not doing that!)–or whether they’re lying.

[CogSciGuy]

Man! I went through the bother to try to figure out how to italicize on here and then I blew it with a typo!

[CogSciGuy]

Man! I went through the bother to try to figure out how to italicize on here and then I blew it with a typo!

[CogSciGuy]

Man! I went through the bother to try to figure out how to italicize on here and then I blew it with a typo!

[CogSciGuy]

Man! I went through the bother to try to figure out how to italicize on here and then I blew it with a typo!

[CogSciGuy]

Man! I went through the bother to try to figure out how to italicize on here and then I blew it with a typo!

[temeculaguy]

CogSciGuy, you are wise to avoid borrowing to the limit, 28/33 or 28/36 ratios have been around for a long time and most people can make it using those guidelines. The other thing is your life situation. A family of four or more has a harder time making it on those ratios, a person starting out in their career whose income will increase faster than inflation has an easier time. So the guidelines are relative. What are you paying in rent and how much extra money do you have each month? That is a better question as to what you can afford, ignore what the bank says. If you are paying 2k in rent and you have money to spare, then a $2500 PITI should feel the same (subtract the income tax benefit but add maintenance). If you don’t have an extra grand laying around at the end of every month then be prepared to feel the pinch if you bite off a 3K mortgage and you pay less than 2k in rent. You gross 120 and only have 10k saved, so that’s not very encouraging and you will likely be house poor if you exceed rent very much. Perhaps change your lifestyle now and see how it works. Pay your rent and at the same time pay the difference equal to 2500 or 3000 into savings at the same time and see how your houshold economy holds up.

A long time ago I borrowed 28% of my gross for a house and I was broke for years, today I have a different theory. All house expenses (piti and utilities) with the net from one paycheck and not with a high witholding ratio but something like m-0 or s-1. At 120k you probably take home about 2500-3000 a paycheck so your theory on that being your limit is a good one.

[temeculaguy]

CogSciGuy, you are wise to avoid borrowing to the limit, 28/33 or 28/36 ratios have been around for a long time and most people can make it using those guidelines. The other thing is your life situation. A family of four or more has a harder time making it on those ratios, a person starting out in their career whose income will increase faster than inflation has an easier time. So the guidelines are relative. What are you paying in rent and how much extra money do you have each month? That is a better question as to what you can afford, ignore what the bank says. If you are paying 2k in rent and you have money to spare, then a $2500 PITI should feel the same (subtract the income tax benefit but add maintenance). If you don’t have an extra grand laying around at the end of every month then be prepared to feel the pinch if you bite off a 3K mortgage and you pay less than 2k in rent. You gross 120 and only have 10k saved, so that’s not very encouraging and you will likely be house poor if you exceed rent very much. Perhaps change your lifestyle now and see how it works. Pay your rent and at the same time pay the difference equal to 2500 or 3000 into savings at the same time and see how your houshold economy holds up.

A long time ago I borrowed 28% of my gross for a house and I was broke for years, today I have a different theory. All house expenses (piti and utilities) with the net from one paycheck and not with a high witholding ratio but something like m-0 or s-1. At 120k you probably take home about 2500-3000 a paycheck so your theory on that being your limit is a good one.

[temeculaguy]

CogSciGuy, you are wise to avoid borrowing to the limit, 28/33 or 28/36 ratios have been around for a long time and most people can make it using those guidelines. The other thing is your life situation. A family of four or more has a harder time making it on those ratios, a person starting out in their career whose income will increase faster than inflation has an easier time. So the guidelines are relative. What are you paying in rent and how much extra money do you have each month? That is a better question as to what you can afford, ignore what the bank says. If you are paying 2k in rent and you have money to spare, then a $2500 PITI should feel the same (subtract the income tax benefit but add maintenance). If you don’t have an extra grand laying around at the end of every month then be prepared to feel the pinch if you bite off a 3K mortgage and you pay less than 2k in rent. You gross 120 and only have 10k saved, so that’s not very encouraging and you will likely be house poor if you exceed rent very much. Perhaps change your lifestyle now and see how it works. Pay your rent and at the same time pay the difference equal to 2500 or 3000 into savings at the same time and see how your houshold economy holds up.

A long time ago I borrowed 28% of my gross for a house and I was broke for years, today I have a different theory. All house expenses (piti and utilities) with the net from one paycheck and not with a high witholding ratio but something like m-0 or s-1. At 120k you probably take home about 2500-3000 a paycheck so your theory on that being your limit is a good one.

[temeculaguy]

CogSciGuy, you are wise to avoid borrowing to the limit, 28/33 or 28/36 ratios have been around for a long time and most people can make it using those guidelines. The other thing is your life situation. A family of four or more has a harder time making it on those ratios, a person starting out in their career whose income will increase faster than inflation has an easier time. So the guidelines are relative. What are you paying in rent and how much extra money do you have each month? That is a better question as to what you can afford, ignore what the bank says. If you are paying 2k in rent and you have money to spare, then a $2500 PITI should feel the same (subtract the income tax benefit but add maintenance). If you don’t have an extra grand laying around at the end of every month then be prepared to feel the pinch if you bite off a 3K mortgage and you pay less than 2k in rent. You gross 120 and only have 10k saved, so that’s not very encouraging and you will likely be house poor if you exceed rent very much. Perhaps change your lifestyle now and see how it works. Pay your rent and at the same time pay the difference equal to 2500 or 3000 into savings at the same time and see how your houshold economy holds up.

A long time ago I borrowed 28% of my gross for a house and I was broke for years, today I have a different theory. All house expenses (piti and utilities) with the net from one paycheck and not with a high witholding ratio but something like m-0 or s-1. At 120k you probably take home about 2500-3000 a paycheck so your theory on that being your limit is a good one.

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