ihearyou2
Well-Known Member
I smell better then I look
Joined: Dec 20, 2010 13:05:34 GMT -5
Posts: 1,857
|
Post by ihearyou2 on Feb 27, 2013 11:54:58 GMT -5
Our mortage used to be 2,300 dollars with all the refinancing we've got it down to about 1,850 but most people in our area are renting for 2-3K a month so it sounds like a deal in my part of the world.
|
|
Tiny
Senior Associate
Joined: Dec 29, 2010 21:22:34 GMT -5
Posts: 13,369
|
Post by Tiny on Feb 27, 2013 11:59:29 GMT -5
Am I crazy for thinking $2000/month doesn't sound so bad for a dream home? Depends on how much taxes and insurance adds to that mortgage payment - can you afford the total bill? Can you still afford the total bill 2/5/7 years from now when it goes up 2 5% each year (taxes and insurance rarely go down in price)? If you can than it sounds like you get to go after your dream home! The absolute top $ I would be willing to go for a mortgage payment (PITI) would be 2K - and then I'd be sweating it... and I'd be looking at a mortgage on less than 300K... PITI would be a bit less than 2K so I'd have a couple years of wiggle room as property taxes/insurance go up...
|
|
phil5185
Junior Associate
Joined: Dec 26, 2010 15:45:49 GMT -5
Posts: 6,409
|
Post by phil5185 on Feb 27, 2013 12:19:09 GMT -5
Yes, that's a valad concern - and it will happen. Biut if you never need to sell, you won't be hurt when house values drop - altho it's disconcerting to watch the values around you fall.
But here's another concern - eg, here in AZ prior to the bubble, young couples were buying lot-line mcmansions with abandon - poorly built, 4000 ft, 2 story, 3 & 4 garages. But now there are few buyers for those - people want 1800 to 2400 ft houses with upscale features and great amenities, but green and efficient, both for energy & space utilization.
So make sure that you are looking at quality houses that you truly want - don't get caught up in a "giant houses are a bargain" frenzy unless you truly want/need an oversized house and plan to have the financial depth, 10 & 15 years out, to pay the maintainace and the big utility bills (the things that will cause value to fall). Landlords/investors (such as me) are avoiding them - but that category is different from buying a 'home'.
Maybe Bonny will comment?
|
|
workpublic
Junior Associate
Catch and release please
Joined: Dec 30, 2010 14:01:48 GMT -5
Posts: 5,551
Favorite Drink: Heineken
|
Post by workpublic on Feb 27, 2013 12:44:10 GMT -5
are school taxes included in the property tax?
|
|
gooddecisions
Senior Member
Joined: Dec 22, 2010 13:42:28 GMT -5
Posts: 2,418
|
Post by gooddecisions on Feb 27, 2013 13:01:16 GMT -5
I appreciate the thoughts- the green consideration was important to me as well, but only the age restricted neighborhoods have good floor plans on smaller square footage in my city, which is obviously not an option. Transitional floor plans are non-existent for under 3000 square feet. Everything else is ranches and colonials, which I hate. I love the floor plans in smaller homes in Arizona and Florida. I could see a big movement like that in the near future, but so far- the nicer new construction homes are >3000 sq ft in the "good" school districts. So, there is no inventory for new green homes with a low carbon footprint. The utilities will be about $200-$250/month, which is also more than on my current 1400 sq ft house.
There are no separate school taxes in my state. We have sales tax, state income taxes, real estate tax, property taxes, gasoline taxes, and tolls among the many other taxes. So, it all evens out.
|
|
Shooby
Senior Associate
Joined: Jan 17, 2013 0:32:36 GMT -5
Posts: 14,782
Mini-Profile Name Color: 1cf04f
|
Post by Shooby on Feb 27, 2013 13:05:07 GMT -5
It depends on your income whether that is a lot or a little. It also depends on what you want out of life, how far you wish to stretch (if it is a stretch) and all that. For me, i don't want to live to pay for a home. A plain, simple home is all i need. I would much rather be flush with cash, be able to eat out, buy what i want, travel and all of that. A "dream home" doesn't really appeal all that much to me. Yes, i want a nice home but it isn't that big of a deal in my book. For some people, that is their "thing". If it is yours, then it certainly may be worth it to you.
|
|
bean29
Junior Associate
Joined: Dec 19, 2010 22:26:57 GMT -5
Posts: 9,937
|
Post by bean29 on Feb 27, 2013 13:21:05 GMT -5
I know of 3 people who have Jumbo Mortgages. One keeps the house at about 60 degrees in the winter (waay too cold for me) and the other two have significant on going assistant from the 'rents to afford house + cars + everything else that goes with a house in an upscale neighborhood.
I think according to those ratios we could well afford a $4,000 mortgage payment but I would never want to have that large a $$ amount committed to the mortgage. We also have about $1,000/month going to college tuition - it would not be realistic if we had a larger mortgage. (I started at about $5,000 deducted $1,000 for cars and even if you take away another $1,000 for the tuition I would still be allowed $3,000 for the house. It is not happening. More for EF, Retirement and or investments. I have plenty of house.
Also 3,000 square feet is a lot of house. Shooby has a point. My Brother and sister in law live in a 2,000 square foot ranch with a finished basement. DSinl says she would rather not have 4 bathrooms to clean before a party. I also think my SinL would rather not get pushed into having more than her share of the family parties b/c she has a nice house for a large crowd.
|
|
Rocky Mtn Saver
Junior Associate
Joined: Dec 23, 2010 9:40:57 GMT -5
Posts: 7,461
|
Post by Rocky Mtn Saver on Feb 27, 2013 13:22:59 GMT -5
I have to agree with Shooby on this one. I try to avoid having expenses that add up to me just working to pay them.
|
|
Deleted
Joined: May 3, 2024 8:20:52 GMT -5
Posts: 0
|
Post by Deleted on Feb 27, 2013 13:34:49 GMT -5
I have to agree with Shooby on this one. I try to avoid having expenses that add up to me just working to pay them. At 11% of their income it doesn't really seem like the $2000 mortgage is a huge chunk of their money.
|
|
Rocky Mtn Saver
Junior Associate
Joined: Dec 23, 2010 9:40:57 GMT -5
Posts: 7,461
|
Post by Rocky Mtn Saver on Feb 27, 2013 13:38:09 GMT -5
I have to agree with Shooby on this one. I try to avoid having expenses that add up to me just working to pay them. At 11% of their income it doesn't really seem like the $2000 mortgage is a huge chunk of their money. No, I wasn't talking about the OP's case particularly. Just a general motto.
|
|
Deleted
Joined: May 3, 2024 8:20:52 GMT -5
Posts: 0
|
Post by Deleted on Feb 27, 2013 13:44:07 GMT -5
Am I crazy for thinking $2000/month doesn't sound so bad for a dream home?
First off I HATE the expression "Dream Home". The fact is that as your life changes so do your needs. A dream home when your 25 years old might be a nightmare when your 70. In life I think that a perfect house can change to not perfect even in a short period like five years.
Also I think too many first time buyers try for that "dream" home right off (instant gradification) & can get caught overspending.
As for the $2,000 per month, well it depends on where you live. That amount some places buys you a box, other places something wonderful. Our payment was $1,000 per month & that's a lot of house around here (now a little less than it used to be).
|
|
Deleted
Joined: May 3, 2024 8:20:53 GMT -5
Posts: 0
|
Post by Deleted on Feb 27, 2013 15:08:14 GMT -5
Our PITI is around 2k a month. I would definitely consider how much it would cost to run and maintain a much larger home, especially if it is an older one. Our house is 50 years old and there is always something that needs to be replaced. We also have help with the lawn and cleaning. I fantasize about living in a small home again.
|
|
bean29
Junior Associate
Joined: Dec 19, 2010 22:26:57 GMT -5
Posts: 9,937
|
Post by bean29 on Feb 27, 2013 15:33:59 GMT -5
We are on our 3rd personal residence. Every time we purchased we bought/financed based upone one income. Especially the current house I wonder where we would be if we had bought up to the max our income and the ratios would allow.
|
|
formerwaitress
Junior Member
Joined: Jul 22, 2012 17:30:57 GMT -5
Posts: 213
|
Post by formerwaitress on Feb 27, 2013 16:10:37 GMT -5
I'm not currently at the level where I can afford $2k/mo for a mortgage, but I'm not far off either. Considering that seems about normal for where I live, I don't think it's unreasonable. Of course, going from $690/mo to $2k/mo is a lot, but if you can legitimately afford it, why not? Of course, I have no idea where you live or what home values are like in your area, but it's common where I live.
|
|
gooddecisions
Senior Member
Joined: Dec 22, 2010 13:42:28 GMT -5
Posts: 2,418
|
Post by gooddecisions on Feb 27, 2013 16:13:59 GMT -5
Well, we put an official offer in, so I guess we'll see what happens.
|
|
Deleted
Joined: May 3, 2024 8:20:53 GMT -5
Posts: 0
|
Post by Deleted on Feb 27, 2013 17:25:55 GMT -5
Before the 2 refi's, our payment started out a bit above $2000.. Now at $1740. Doesn't seem that high to us.
Property taxes are $6000 on $550,000 and insurance is $900.
|
|
Deleted
Joined: May 3, 2024 8:20:53 GMT -5
Posts: 0
|
Post by Deleted on Feb 27, 2013 17:42:08 GMT -5
Man, where are you people getting these 8-900 insurance rates?? Mine just jumped...AGAIN and is now at $1900.
|
|
Deleted
Joined: May 3, 2024 8:20:53 GMT -5
Posts: 0
|
Post by Deleted on Feb 27, 2013 18:42:31 GMT -5
Man, where are you people getting these 8-900 insurance rates?? Mine just jumped...AGAIN and is now at $1900. The main things we have to worry about are wild fires and earthquakes. Earthquakes aren't covered under regular homeowners and is optional. We pay the $350/yr for it. Wild fires depend on location, but we aren't in a big danger zone, so our rates don't take much of a hit for that.
|
|
Nazgul Girl
Junior Associate
Babysitting our new grandbaby 3 days a week !
Joined: Dec 25, 2010 23:25:02 GMT -5
Posts: 5,913
Today's Mood: excellent
|
Post by Nazgul Girl on Feb 27, 2013 20:19:35 GMT -5
I wouldn't like to be trapped in a mortgage payment that high. Of course, our income is much less than yours, but our monthly mortgage payment is $ 904 including taxes and ins, and we can pay that out of part of my husband's S.S. check, so we do not have worries. It wouldn't make sense for us to get a big place a this point in our lives, anyway. I've learned that freedom is better than a dream house.
Sometimes people get sick, lose jobs, divorce, or get sued, and then all of a sudden that big bargain can turn into a big burden or a big barn. i just have had some really weird twists on my path which I had thought was well thought out, and extremely straight. It wasn't.
|
|
Deleted
Joined: May 3, 2024 8:20:53 GMT -5
Posts: 0
|
Post by Deleted on Feb 27, 2013 20:33:49 GMT -5
I dealt with a mortgage payment that high as a single mother in a HCOL area, with property taxes and insurance on top of that. You gotta do what you gotta do. In my case, I was trying to keep DS in a good school district after my divrce and ended up sending him to a private school when the public school didn't work out.
I did make a lot of money on it when I sold it, and still find it amazing that there's a way to make $200K tax-free. The down side was that it did tie up a heck of a lot of my income. It was all I could do to keep the place in good repair- upgrades were out of the question. It was scary when the consulting firm I was with fell on hard times and my income dropped. I was able to amx out my 401(k) but couldn't save much else.
DH and I are now in a place that costs a whole heck of a lot less than we could have afforded (LCOL area) and life is good.
BTW, don't forget to factor in increased utilities and upkeep, and maybe more furniture, curtains, etc.
Another thought: if you're loooking at a very large place, I'd be concerned about selling it in the future. DH and I (ages 60 and 74) are starting to think about downsizing. We love our 5 BR McMansion with the pool, but at some point it will be too much to maintain. I worry that all the other baby boomers will be putting their houses on the market at the same time for the same reasons, with not enough young families interested in buying. We'll be OK- we have only 5 years left on the mortgage and won't need to make a killing on the house in order to retire comfortably- but you may need to cinsider the marketability of large houses when you're likely to want to sell.
|
|
phil5185
Junior Associate
Joined: Dec 26, 2010 15:45:49 GMT -5
Posts: 6,409
|
Post by phil5185 on Feb 27, 2013 22:25:50 GMT -5
This mostly what I was trying to address in post 32 - not the $2000/m cost. IMO it's getting tougher to guess what the future will bring in 15 to 20 years. Houses will be thermally enclosed (similar to a thermosbottle) and largely passively heated/cooled by body heat, cooking, heat 'storage'. (Germany has a proto in Heidelberg). Today the US has several mile long coal trains crossing the nation daily, you won't see that in 20 yrs (hopefully). The grid will be mostly reactor powered. (Sorry, solar and the windmills are all the rage - but not 'keepers' - the physics just isn't there). So the giant non-green houses of 2013 will be white-elephants some day. The ones that cannot be re-sold will be razed. Maybe a bit too extreme? Or maybe not?
|
|
Deleted
Joined: May 3, 2024 8:20:53 GMT -5
Posts: 0
|
Post by Deleted on Feb 27, 2013 23:01:16 GMT -5
This mostly what I was trying to address in post 32 - not the $2000/m cost. IMO it's getting tougher to guess what the future will bring in 15 to 20 years. Houses will be thermally enclosed (similar to a thermosbottle) and largely passively heated/cooled by body heat, cooking, heat 'storage'. (Germany has a proto in Heidelberg). Today the US has several mile long coal trains crossing the nation daily, you won't see that in 20 yrs (hopefully). The grid will be mostly reactor powered. (Sorry, solar and the windmills are all the rage - but not 'keepers' - the physics just isn't there). So the giant non-green houses of 2013 will be white-elephants some day. The ones that cannot be re-sold will be razed. Maybe a bit too extreme? Or maybe not? Maybe Obama-claus will double down on home solar subsidies so those white-elephants can stay cheap to heat/cool in the future.
|
|
Sam_2.0
Senior Associate
Joined: Dec 19, 2010 15:42:45 GMT -5
Posts: 12,350
|
Post by Sam_2.0 on Feb 27, 2013 23:34:49 GMT -5
That's the monthly range we are looking at for our next house. Not a "dream house" necessarily, but we want a 4-5 br house that we can raise our family in. Right now our PITI is $890 (mortgage only $560 of that, rest taxes & ins). Ironically, the taxes & ins are less in the city we are looking at so it should come out close to what we are paying now. It definitely won't triple even though the value of the house we are looking at vs. what we have now will.
|
|
lurkyloo
Junior Associate
“Time means nothing now,” said Toad. “It is just the thing that happens between snacks.”
Joined: Jan 8, 2011 11:26:56 GMT -5
Posts: 5,585
|
Post by lurkyloo on Feb 28, 2013 0:18:36 GMT -5
Our P&I is $2500, we're working on refinancing to around $1800. So no, I don't think 2K/month is a stretch. One thing to keep in mind is that the mortgage interest deduction kicks in and is significant at higher income levels, especially if it's state-deductible as well. When we first moved to this area we were paying 2K a month in rent, after tax. So if we get to $2200/month PITI and a big chunk of that is fed (33%) and CA (9%) deductible, the carrying costs are actually cheaper. (Yes that's ignoring maintenance and upkeep costs, but it's also neutralizing things like having to move suddenly because the landlords put the place on the market without warning and hired a crazy bitch realtor who's calling all the time. )
|
|
Deleted
Joined: May 3, 2024 8:20:52 GMT -5
Posts: 0
|
Post by Deleted on Feb 28, 2013 8:00:11 GMT -5
a $2000 a month mortgage wouldn't faze me a bit, especially on your salaries. With taxes and insurance mine is probably close to that and I've got a single income. For those in a LCOLA you can't get a house for $100K (maybe an outhouse) in a HCOLA. However, the salaries in the HCOLA are significantly more than in a LCOLA. Also, why does everyone always assume that if you're paying more that $150K for a house, it's a McMansion?
|
|
skubikky
Senior Member
Joined: Dec 20, 2010 7:37:12 GMT -5
Posts: 3,044
|
Post by skubikky on Feb 28, 2013 8:17:06 GMT -5
Man, where are you people getting these 8-900 insurance rates?? Mine just jumped...AGAIN and is now at $1900. It might be the horses......what is referred to as an "attractive nuisance". Personally I find people more of a nuisance than my horse.
|
|
Deleted
Joined: May 3, 2024 8:20:53 GMT -5
Posts: 0
|
Post by Deleted on Feb 28, 2013 8:56:18 GMT -5
Man, where are you people getting these 8-900 insurance rates?? Mine just jumped...AGAIN and is now at $1900. It might be the horses......what is referred to as an "attractive nuisance". Personally I find people more of a nuisance than my horse. Yeah that, and part of my land is farmed so I guess the liability risk is a lot higher. But I asked about that once on here and the insurance people said that's not how homeowner's works...I dunno.
|
|
muttleynfelix
Junior Associate
Joined: Dec 20, 2010 15:32:52 GMT -5
Posts: 9,406
|
Post by muttleynfelix on Feb 28, 2013 9:32:12 GMT -5
It might be the horses......what is referred to as an "attractive nuisance". Personally I find people more of a nuisance than my horse. Yeah that, and part of my land is farmed so I guess the liability risk is a lot higher. But I asked about that once on here and the insurance people said that's not how homeowner's works...I dunno. Mine is $1200 a year or so and we don't have any livestock, but we do have 10 acres. The $800-$900 a year seems crazy to me for a house that is much more expensive than mine.
|
|
Deleted
Joined: May 3, 2024 8:20:53 GMT -5
Posts: 0
|
Post by Deleted on Feb 28, 2013 9:51:06 GMT -5
Only a couple of years ago I freaked out when a friend bought a house for $250,000. Last year I paid $223,000 for my house. I am amazed by how my views of acceptable expense have changed as my income increased. When I made less I didn't think I would spend this much even if I had the money. There must have been some denial going on in my head to say I didn't really want the nicer stuff anyway. Turns out that when I can afford it I DO want the nicer stuff.
|
|
bean29
Junior Associate
Joined: Dec 19, 2010 22:26:57 GMT -5
Posts: 9,937
|
Post by bean29 on Feb 28, 2013 9:57:27 GMT -5
Before the 2 refi's, our payment started out a bit above $2000.. Now at $1740. Doesn't seem that high to us. Property taxes are $6000 on $550,000 and insurance is $900. I am soo jealous. I wish my property taxes were less. I guess I will have to hold out for living in a lower tax area in retirement. (note to self: make sure it is also a warm climate).
|
|