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HHN2472 HHN2472 (New Member) New Member

What kind of house can you afford

Lounge   (11,008 Views 14 Comments)
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I have been saving a while and know nothing about the reality of home ownership. Those of you making around $25/hr working a 40ish hour a week job... what can you afford comfortably? I know that areas of the country matter and I am down South. Just curious. I really don't have any home owning friends and the ones who do are not in my pay scale.

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You can go to your bank and ask to talk with a mortgage officer; that person can plug your income, savings, and debt into a computer algorithm, and talk with you about how much you could afford to spend on a house, how good a position you're currently in to qualify for a mortgage, and any other questions you may have.

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I live in a modest townhome myself. We love the area and are quite happy here. DH has friends who make far less money than we (we're both nurses, the friend is a paramedic and his wife doesn't work) who own a four bedroom home WAYYYY out in the suburbs. They're constantly on the verge of foreclosure. He has a colleague (also in a McMansion) with a two hour commute and who is dependent upon overtime to keep up with his mortgage.

I think the key is to live within your means and make up your mind to be happy where you live. But elkpark is right about the bank and the mortgage officer. Do that BEFORE you talk to a realtor. Then if you see the house of your dreams at your first open house, you'll be ready to make an offer.

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That is truly scary that, "He has a colleague (also in a McMansion) with a two hour commute and who is dependent upon overtime to keep up with his mortgage" and "Constantly on the verge of foreclosure." Wow... is all I can say.

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That is truly scary that, "He has a colleague (also in a McMansion) with a two hour commute and who is dependent upon overtime to keep up with his mortgage" and "Constantly on the verge of foreclosure." Wow... is all I can say.

Yeah. It gets worse. He got fired from his job and had another opportunity in New Mexico -- but they couldn't sell the danged house!

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If you are on you own and renting an apartment, then determine if you are content with that amount each month. Bankrate.com has a mortgage calculator to determine your monthly payment for the amount you want to borrow. Keep in mind that when you buy a house that you also have pay property taxes and homeowner's insurance which will increase your monthly housing payment.

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And don't forget to add in the costs of taxes, insurance and those unexpected maintenance bills.

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I advise you to look into Dave Ramsey. He has good, solid, financial advise. I know he recommends at least 20% down and that your mortgage not be more than 1/4 of your take home pay.

Good luck!

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In 2003, I was a 22-year-old factory worker with an income of about $39k yearly. That year I purchased a $146k house in central California. I put $14,600 (10 percent) down, and with an interest rate of 5.75 over 30 years, ended up with a monthly payment of $867. I did not include the property taxes or homeowner's insurance into my mortgage. If so, my payment would have been in the neighborhood of $1100 monthly.

The property surged in value due to the speculative real estate bubble of 2005, so I sold the house that year for $260k, cashed out and moved to Texas where I began my nursing career.

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Lucky Duck :) I was one of the dumb ones that bought in 2007. In Florida.

Wah wah

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It really depends on whether you want a 15 or 30 year loan.

I prefer the smaller, cheaper house for 15 years. A bigger monthly payment, but at least you can see the light at the end of the tunnel.

I like the idea of the small fixer upper to pay off and move up. It also has the added bonus of being just plain fun. That's if you're handy with a saw, are married to somebody who's handy with a saw, or have a large family who just likes to get dirty.

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I would also advise to go with a smaller house than the bank will say you can afford. Live within your means, and then you won't have the stress of feeling like you're one paycheck away from foreclosure. There will be unforeseen expenses, so make sure you still have enough money to put some away every month, and don't neglect retirement savings. You can also learn to do a lot of the routine maintenance stuff yourself.

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