To max out your purchasing ability or not?

[kev374]

maxing out your purchasing power is a horrible idea. You are taking into account the IDEAL scenario, that is really bad planning. Whoever told you this is a novice.

You should always account for stuff like job loss, emergency maintainence on the property, unanticipated expenses etc. that can eat into your budget. If you spend everything on the mortgage you will end up using credit cards and you know where that leads! Not a good road.

People have stretched to the max and now are losing their homes because of it.

[kev374]

maxing out your purchasing power is a horrible idea. You are taking into account the IDEAL scenario, that is really bad planning. Whoever told you this is a novice.

You should always account for stuff like job loss, emergency maintainence on the property, unanticipated expenses etc. that can eat into your budget. If you spend everything on the mortgage you will end up using credit cards and you know where that leads! Not a good road.

People have stretched to the max and now are losing their homes because of it.

[nostradamus]

I agree with kev374. Get what you can comfortably afford now. If your salary goes up then upgrade to a new house. If your salary goes down or you lose a job you have a safety margin.

[nostradamus]

I agree with kev374. Get what you can comfortably afford now. If your salary goes up then upgrade to a new house. If your salary goes down or you lose a job you have a safety margin.

[nostradamus]

I agree with kev374. Get what you can comfortably afford now. If your salary goes up then upgrade to a new house. If your salary goes down or you lose a job you have a safety margin.

[nostradamus]

I agree with kev374. Get what you can comfortably afford now. If your salary goes up then upgrade to a new house. If your salary goes down or you lose a job you have a safety margin.

[an]

How often does one get a pay cut in comparison to a pay raise? Wouldn’t each upgrade cost you 6% anyways? That’s a lot of $ to throw away. If you have sufficient rainy day fund, wouldn’t it offset the risk of job loss in your risk calculation? Also, no one know your job security better than you. But if a mass market meltdown and widespread job loss occur, then it doesn’t really matter if you stretch or not, you’ll have no income to even pay for a mobile home, so calculate your own risk tolerance accordingly. No one know that better than you do.

[an]

How often does one get a pay cut in comparison to a pay raise? Wouldn’t each upgrade cost you 6% anyways? That’s a lot of $ to throw away. If you have sufficient rainy day fund, wouldn’t it offset the risk of job loss in your risk calculation? Also, no one know your job security better than you. But if a mass market meltdown and widespread job loss occur, then it doesn’t really matter if you stretch or not, you’ll have no income to even pay for a mobile home, so calculate your own risk tolerance accordingly. No one know that better than you do.

[an]

How often does one get a pay cut in comparison to a pay raise? Wouldn’t each upgrade cost you 6% anyways? That’s a lot of $ to throw away. If you have sufficient rainy day fund, wouldn’t it offset the risk of job loss in your risk calculation? Also, no one know your job security better than you. But if a mass market meltdown and widespread job loss occur, then it doesn’t really matter if you stretch or not, you’ll have no income to even pay for a mobile home, so calculate your own risk tolerance accordingly. No one know that better than you do.

[an]

How often does one get a pay cut in comparison to a pay raise? Wouldn’t each upgrade cost you 6% anyways? That’s a lot of $ to throw away. If you have sufficient rainy day fund, wouldn’t it offset the risk of job loss in your risk calculation? Also, no one know your job security better than you. But if a mass market meltdown and widespread job loss occur, then it doesn’t really matter if you stretch or not, you’ll have no income to even pay for a mobile home, so calculate your own risk tolerance accordingly. No one know that better than you do.

[nostradamus]

Wouldn't each upgrade cost you 6% anyways?

Only if you feel that a realtor is necessary.

If you have sufficient rainy day fund,

then you're not really stretching yourself are ya?

 

[nostradamus]

Wouldn't each upgrade cost you 6% anyways?

Only if you feel that a realtor is necessary.

If you have sufficient rainy day fund,

then you're not really stretching yourself are ya?

 

[nostradamus]

Wouldn't each upgrade cost you 6% anyways?

Only if you feel that a realtor is necessary.

If you have sufficient rainy day fund,

then you're not really stretching yourself are ya?

 

[nostradamus]

Wouldn't each upgrade cost you 6% anyways?

Only if you feel that a realtor is necessary.

If you have sufficient rainy day fund,

then you're not really stretching yourself are ya?

 

[SD Realtor]

Jimmy –

As you guys are first time homebuyers my advice is that you should definitely NOT max out your purchasing power. As a first time buyer you will most likely be buying another home down the line. Take a long view of the purchase, buy a home you love but that you can also afford. Your home purchase should not stress you out. You should have AT LEAST 6 months cash on the sidelines in case of an emergency. As plentiful as things may be it is blinding how fast large companies implement cost cutting measures when they need to. When that happens layoffs occur. I am not trying to be overly pessimistic but I am just advising you to play it safe and keep an eye on the big picture. By a home you love, by a home that is affordable and will not eat up every penny you have. Buy something that will allow you to continue to fund 401ks, enjoy life and continue to save money and get to work on building or adding to your cash pile. Who knows you may be able to save enough such that in many years down the road, you will not need to sell your home, you can convert it to a rental and buy the next one.

I just would not try to shoot the moon on the first purchase. Also as you know there is no rush right now and Mira Mesa will continue to decline. (assuming MM is where you want to buy at)

SD Realtor

[Author]

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