Spring Buying Season

[patientlywaiting]

I’m not surprised at all with the down-payments. People are flexible and will come up with ways to buy if they want to qualify.

In other countries (such as Italy or Greece) where it’s common to pay cash for houses, people find ways to buy houses. But that doesn’t mean they saved up the whole amount and that they don’t owe money to someone.

Often times, debt owed to hard-money lenders who will beat you up if you don’t pay up, or to relatives is less risky that mortgage debt. The same is true for immigrant communities in America.

[Eugene]

And I am still shocked about the perception that an $80k/year income is inadequate to save up a down payment. Assuming you live reasonably, that is still more then enough to save up quite a big chunk of money after a few years.

Let’s do some math. A young couple with one child, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (2br apartment in a decent area) $1500*12 = $18000
– Utilities $200*12 = $2400
– Daycare $800*12 = $9600 (could be worse)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200
– Car insurance $300*12 = $3600
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and a child, say $500*12 = $6000

That leaves $13800/year from which they are to save $80k down payment on a median house in Mira Mesa, $120k down payment on a median house in RB/RP, or $180k down payment on a median house in Carmel Valley.

Note that I didn’t include any spending on entertainment, clothes, vacations, toys for the child, etc. etc. I’m assuming that nobody ever gets sick, cars don’t break, there are no five-digit credit card balances or student loans in the picture.

And a dual income couple making that much money (is most likely) either very young – or probably shouldn’t be buying in CV, PQ, MM, etc but somewhere a bit more in-line with their salary ranges.

In your mind, what area would be in line with their salary ranges?

[Eugene]

And I am still shocked about the perception that an $80k/year income is inadequate to save up a down payment. Assuming you live reasonably, that is still more then enough to save up quite a big chunk of money after a few years.

Let’s do some math. A young couple with one child, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (2br apartment in a decent area) $1500*12 = $18000
– Utilities $200*12 = $2400
– Daycare $800*12 = $9600 (could be worse)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200
– Car insurance $300*12 = $3600
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and a child, say $500*12 = $6000

That leaves $13800/year from which they are to save $80k down payment on a median house in Mira Mesa, $120k down payment on a median house in RB/RP, or $180k down payment on a median house in Carmel Valley.

Note that I didn’t include any spending on entertainment, clothes, vacations, toys for the child, etc. etc. I’m assuming that nobody ever gets sick, cars don’t break, there are no five-digit credit card balances or student loans in the picture.

And a dual income couple making that much money (is most likely) either very young – or probably shouldn’t be buying in CV, PQ, MM, etc but somewhere a bit more in-line with their salary ranges.

In your mind, what area would be in line with their salary ranges?

[Eugene]

And I am still shocked about the perception that an $80k/year income is inadequate to save up a down payment. Assuming you live reasonably, that is still more then enough to save up quite a big chunk of money after a few years.

Let’s do some math. A young couple with one child, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (2br apartment in a decent area) $1500*12 = $18000
– Utilities $200*12 = $2400
– Daycare $800*12 = $9600 (could be worse)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200
– Car insurance $300*12 = $3600
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and a child, say $500*12 = $6000

That leaves $13800/year from which they are to save $80k down payment on a median house in Mira Mesa, $120k down payment on a median house in RB/RP, or $180k down payment on a median house in Carmel Valley.

Note that I didn’t include any spending on entertainment, clothes, vacations, toys for the child, etc. etc. I’m assuming that nobody ever gets sick, cars don’t break, there are no five-digit credit card balances or student loans in the picture.

And a dual income couple making that much money (is most likely) either very young – or probably shouldn’t be buying in CV, PQ, MM, etc but somewhere a bit more in-line with their salary ranges.

In your mind, what area would be in line with their salary ranges?

[Eugene]

And I am still shocked about the perception that an $80k/year income is inadequate to save up a down payment. Assuming you live reasonably, that is still more then enough to save up quite a big chunk of money after a few years.

Let’s do some math. A young couple with one child, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (2br apartment in a decent area) $1500*12 = $18000
– Utilities $200*12 = $2400
– Daycare $800*12 = $9600 (could be worse)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200
– Car insurance $300*12 = $3600
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and a child, say $500*12 = $6000

That leaves $13800/year from which they are to save $80k down payment on a median house in Mira Mesa, $120k down payment on a median house in RB/RP, or $180k down payment on a median house in Carmel Valley.

Note that I didn’t include any spending on entertainment, clothes, vacations, toys for the child, etc. etc. I’m assuming that nobody ever gets sick, cars don’t break, there are no five-digit credit card balances or student loans in the picture.

And a dual income couple making that much money (is most likely) either very young – or probably shouldn’t be buying in CV, PQ, MM, etc but somewhere a bit more in-line with their salary ranges.

In your mind, what area would be in line with their salary ranges?

[Eugene]

And I am still shocked about the perception that an $80k/year income is inadequate to save up a down payment. Assuming you live reasonably, that is still more then enough to save up quite a big chunk of money after a few years.

Let’s do some math. A young couple with one child, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (2br apartment in a decent area) $1500*12 = $18000
– Utilities $200*12 = $2400
– Daycare $800*12 = $9600 (could be worse)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200
– Car insurance $300*12 = $3600
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and a child, say $500*12 = $6000

That leaves $13800/year from which they are to save $80k down payment on a median house in Mira Mesa, $120k down payment on a median house in RB/RP, or $180k down payment on a median house in Carmel Valley.

Note that I didn’t include any spending on entertainment, clothes, vacations, toys for the child, etc. etc. I’m assuming that nobody ever gets sick, cars don’t break, there are no five-digit credit card balances or student loans in the picture.

And a dual income couple making that much money (is most likely) either very young – or probably shouldn’t be buying in CV, PQ, MM, etc but somewhere a bit more in-line with their salary ranges.

In your mind, what area would be in line with their salary ranges?

[sdnerd]

Let’s remove the kid from your equation, and let’s have the couple actually put in a little tough love on their lifestyle. After all – home ownership should take a little sacrafice to start off.

(modifying your numbers)

Let’s do some math. A young couple with no child because they waited until they were financially stable before expanding their family, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (1br apartment in a decent area) $1100*12 = $13200
– Utilities $100*12 = $1200 (SDGE, High Cable)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200 (We’ll leave this, although they could get something cheaper or older used)
– Car insurance for both cars = $2,000 (Your number was incredibly high)
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and no child, say $500*12 = $6000

There you go – that couple now has a whole lot more money to save each year for a down payment, with plenty extra money for a vacation or two and a decent social life. There’s even room left in there for student loans, etc.

Let’s say they saved $20k/year and spent the rest having fun. That’s only 3 years to save up for a 20% in MM. Sure, add some unexpected expenses and let’s ay it takes them 5 years.

How is that unreasonable?

[sdnerd]

Let’s remove the kid from your equation, and let’s have the couple actually put in a little tough love on their lifestyle. After all – home ownership should take a little sacrafice to start off.

(modifying your numbers)

Let’s do some math. A young couple with no child because they waited until they were financially stable before expanding their family, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (1br apartment in a decent area) $1100*12 = $13200
– Utilities $100*12 = $1200 (SDGE, High Cable)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200 (We’ll leave this, although they could get something cheaper or older used)
– Car insurance for both cars = $2,000 (Your number was incredibly high)
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and no child, say $500*12 = $6000

There you go – that couple now has a whole lot more money to save each year for a down payment, with plenty extra money for a vacation or two and a decent social life. There’s even room left in there for student loans, etc.

Let’s say they saved $20k/year and spent the rest having fun. That’s only 3 years to save up for a 20% in MM. Sure, add some unexpected expenses and let’s ay it takes them 5 years.

How is that unreasonable?

[sdnerd]

Let’s remove the kid from your equation, and let’s have the couple actually put in a little tough love on their lifestyle. After all – home ownership should take a little sacrafice to start off.

(modifying your numbers)

Let’s do some math. A young couple with no child because they waited until they were financially stable before expanding their family, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (1br apartment in a decent area) $1100*12 = $13200
– Utilities $100*12 = $1200 (SDGE, High Cable)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200 (We’ll leave this, although they could get something cheaper or older used)
– Car insurance for both cars = $2,000 (Your number was incredibly high)
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and no child, say $500*12 = $6000

There you go – that couple now has a whole lot more money to save each year for a down payment, with plenty extra money for a vacation or two and a decent social life. There’s even room left in there for student loans, etc.

Let’s say they saved $20k/year and spent the rest having fun. That’s only 3 years to save up for a 20% in MM. Sure, add some unexpected expenses and let’s ay it takes them 5 years.

How is that unreasonable?

[sdnerd]

Let’s remove the kid from your equation, and let’s have the couple actually put in a little tough love on their lifestyle. After all – home ownership should take a little sacrafice to start off.

(modifying your numbers)

Let’s do some math. A young couple with no child because they waited until they were financially stable before expanding their family, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (1br apartment in a decent area) $1100*12 = $13200
– Utilities $100*12 = $1200 (SDGE, High Cable)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200 (We’ll leave this, although they could get something cheaper or older used)
– Car insurance for both cars = $2,000 (Your number was incredibly high)
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and no child, say $500*12 = $6000

There you go – that couple now has a whole lot more money to save each year for a down payment, with plenty extra money for a vacation or two and a decent social life. There’s even room left in there for student loans, etc.

Let’s say they saved $20k/year and spent the rest having fun. That’s only 3 years to save up for a 20% in MM. Sure, add some unexpected expenses and let’s ay it takes them 5 years.

How is that unreasonable?

[sdnerd]

Let’s remove the kid from your equation, and let’s have the couple actually put in a little tough love on their lifestyle. After all – home ownership should take a little sacrafice to start off.

(modifying your numbers)

Let’s do some math. A young couple with no child because they waited until they were financially stable before expanding their family, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (1br apartment in a decent area) $1100*12 = $13200
– Utilities $100*12 = $1200 (SDGE, High Cable)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200 (We’ll leave this, although they could get something cheaper or older used)
– Car insurance for both cars = $2,000 (Your number was incredibly high)
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and no child, say $500*12 = $6000

There you go – that couple now has a whole lot more money to save each year for a down payment, with plenty extra money for a vacation or two and a decent social life. There’s even room left in there for student loans, etc.

Let’s say they saved $20k/year and spent the rest having fun. That’s only 3 years to save up for a 20% in MM. Sure, add some unexpected expenses and let’s ay it takes them 5 years.

How is that unreasonable?

[JC]

Where is the 401k?

[JC]

Where is the 401k?

[JC]

Where is the 401k?

[JC]

Where is the 401k?

[Author]

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