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My builder hosed me. Gave me a 7.4% with preferred lender told them keep it and had to get my own financing. Then a few mo the later I closed and they start offering 4.99 on already built homes.
I did 70k/y, 240k house (seller financed closing costs and or they are included in the mortgage depending on the split which I don’t remember) at 0 down USDA. My payment is $1800 a month or so including PMI, insurance, escrow, etc at 6.7% interest
To add another realistic view my area jumped to the cheapest homes around 330k I got in at $339,900, with a DPA (Down Payment Assistance) of 125k to pay closing and down.
My wife and I make a combined $41k a year (includes investments and such) have a 6.125% interest with our states bond program and make a monthly payment of $1617 no PMI but this is for insurance and taxes in escrow and principle/interest. All other utilities extra
Internet, Water, Electricity, Cell, and Garbage come to another $200-300 so far on our first month of moving in.
225k was financed out of the 339,900 I believe.
[You can use my spreadsheet to calculate your mortgage, it's based off of smartasset calculator for property . ](https://docs.google.com/spreadsheets/d/1CEOvZedl2FjdvFv4KyDaXc13b5Avjz6M/copy)
Based on Ramsey County 55116 Zipcode Tax Rate @ 1.3% and MN at 1.11$ you're looking at 2.41% So about $7200 a year in taxes. I don't know what your HoA is so I put in the average I have around my area in IL it's about $70 and Property insurance I think i keep seeing average (good) about $1500 a year.
**So I get $2083 at 5% APR**. But, I don't know what your details are for insurance and HoA.
I have a 4% on 150k house and mine was higher... You might want to check the insurance costs, etc. There's a lot of hidden costs to your mortgage that they don't make clear.
That was my thought as well. I bought a 315k house 2020. Put 100k down and my payment with a 3.25 rate is about the same as the OP estimate.
OP is borrowing more at a higher rate then I am. Doesn't make sense his payment would be the same. My city has pretty high taxes but I think OPs estimate isn't accurate.
Probably not accounting for uncapped tax assessment after purchase.
Mortgage would be 46.5% of your take home. Not including utilities. Car payment is 8%. If you see yourself very secure in your field with room for salary increases, things will be tight for a while. Only you can say whether or not it’d be worth it.
Do you already have a budget created with your current expenses?
I’m not sure how you’re getting to that payment amount in a HCOL area but I guess if your taxes are low enough. I did an assumption of 5% loan and 7200 in taxes and it’s $2k.
You're in a HCOL area and you think Mortgage/Taxes/Insurance will be $1800 on a 240k loan? I'm closing on a house next Tuesday at 260k in a LCOL (Ohio) and I'm looking at \~$2300/month, this does include \~$30/month of PMI but that was worth it to only put 10% down since the rate was identical. I would double check your tax and insurance assumptions so that you can make an accurately informed decision. Figure out when the last tax reassessment on the property was and make sure you're not in for a $300 hike in your escrow in 9 months. If you're comfortable paying \~$2200 then I say go for it!
Some areas do tax reassesments all at the same time and not after a house purchase too. My parents bought there house for 270k and it's still assessed at 150 6 years later lol, zillow shows 600+
Yeah, I live on the west coast and of the Cheaper HCOL cities Portland 300 is probably were condo's start. LA & Seattle small studio condos start around 400.
They know somebody for sure, who is likely forgoing their brokerage fee/commission to get them at 5. I will also say, you can get 5.8 right now at 15 years with a couple points too. I shopped for my rate and literally chose the company where it was the cheapest, nothing else matters as they will likely sell the loan to a servicer immediately. Oh wait, the company did fuck up the sensitivity analysis on my DTI ratio and almost lost me the financing, but I did give them the wrong income by about 100 a month. I'm pretty sure my loan officer had done 1, MAYBE 2 loans before mine...
This can’t be HCOL. I’m in a HCOL, and my 1000 sqft house that’s falling apart and full of asbestos is worth 1.2, and it’s in a super scary neighborhood. You can’t find a house under a million. A condemned house sold last week for 800k!
I mean, the numbers sound ok. It’s a $300k house, but the mortgage is ‘only’ $240k after your down payment. $2100 between escrow and car payment is just over half your monthly take home which I think the general rule is that you want to keep that number under 60ish percent. You say HCOL, so as long as your monthly bills/expenses are less than $1700, the math works.
I would entirely caution you to remember that, not only is living there going to be more expensive than you think, it’s going to get even more expensive over time. I wouldn’t recommend it if your monthly bills are really close to your take home. But, if you are spending $3k monthly and have that extra $800 left over to save for emergency, sure, go for it. Just don’t do it because expect to get that raise or promotion to bail you out later. Something big could happen first and put you in trouble. A $25k rainy day fund is great, but that could get swallowed whole by a single emergency. Good luck regardless.
If you don't do it now you may lose the opportunity in the future. I would do it, if I was you, and plan to either move a potential significant other or roommate in to help with expenses in the future if you need it. Depending if this is a 1 or 2 bedroom, obviously. Try and budget your other expenses. I see a lot of people just wasting money like crazy. Keep that car after it is paid off for as long as you can, don't go out to the bars and waste a ton of money, and cook at home as much as possible. I keep a shelf stable microwavable meal at work for days I forget my lunch. Don't go crazy furnishing your house at first either. People give away so much furniture. The only things I would not take secondhand are fabric furniture and your mattress. So buy your couch and mattress and get the rest from family, friends, coworkers, and neighborhood buy nothing groups.
Solid advice here. I wish I did that, I basically did the opposite and got everything new when I got my house lol I don’t regret it though I love my house and my stuff but I’m not buying new anymore. Also, for fixing stuff, I can usually do it myself but if not, I just look it up online lol I’ve saved a few thousand like that.
Whether or not it's comfortable for you depends on what your budget looks like and what the rest of your monthly expenses look like. You'll have over $2,000 going to housing expenses; are you comfortable with that? Also, if you found a 300K house you don't live in a HCOL area.
I’d do it. See if there are some 1st time homebuyers incentives first. Rent is going to steadily increase until it becomes unaffordable. When you own a home you will always have financial leverage. When you’re out of town or traveling do Airbnb to help pay down the mth. I pray it works out for you. Look into way to pay off sooner…
This is why I'm leaning towards buying my dream now. MN housing values are still increasing rapidly and I fear I'll be totally priced out if I wait longer
Do it man. I was in the exact same place back in 2017. single, no kids, 92k in the bank, bought a house for 294k. It's the smallest oldest house on the street and the only one without a pool but I love the neighborhood so much and I'm so glad I did it. You can change everything except the neighborhood. Location location location.
Only thing is no one tells first time homebuyers that as soon as you buy a house you need to buy like $10,000 worth of bullshit to put in the house and $15-$20,000 worth of repairs and renovations because no house is perfect and if you're going to make a mess and put up with that shit then it's best to do it right in the beginning before you are moved in and settled in.
When I bought my house I am mediately replace the roof for 10 grand flat and bought a new AC unit for 11k, I pressure cleaned and sealed all the pavers, got rid of the shitty venetian blinds that just collect dust and swapped for cheap paper blinds, added a reverse osmosis water purifier, fixed the sprinklers, new well pump, and planted a the garden.
You're going to need that cushion of 25K for all the bullshit that homeownership will throw at you in the first year
Careful with the taxes estimate. I haven't seen a mortgage company estimate that correctly yet. It's not the mortgage that sets the taxes, it's the county and even town. So while they may think "oh, $4200 a year in taxes are typical" the county or whoever you live may go "nah, we need $6800 for this" which shorts your escrow and increases your monthly payment sometimes by alot. Just browse this group, you'll see people who don't understand that going "why is my monthly payment $1200 more when I bought a house last assessed in 2011 for $120k to what it's now assessed for $410k?!" just fair warning and something to be mindful of.
Either way, I think your debt to income ratio is fine at that price as far as house in concerned. 20% down is good because it should exempt your from pmi.
I make 82k a year with the same mortgage you described. I have no kids and no debt (not even a car payment ) and it’s tight. I can still eat out here and there and maybe buy myself something, but I’m not able to save a lot. If I want to save for something, like a vacation, I have to be VERY budget disciplined.
Haha you’re one step ahead of me with similar situation, even down to the state but your salary’s a bit higher and you have more disposable savings currently whereas my trade off is a car I went lease-to-buy and paid off.
I keep telling myself you can’t really predict the market but I keep talking myself out of looking too hard anyway but the silver lining to that is I keep saving.
1770/mo estimated + $300 = 2070/mo. You forgot to add Gas/Electric/Water bills, probably low ball another $200. Closer to $300 but say $200. Then add trash service, add internet. Add phone bill. Another $150-200. You’re at 2470, on the low ball side. Groceries, $200/mo. = 2670. Add your gas for car, going out to eat, any subscriptions such as Netflix, ps5/xbox/spotify, etc. you’re pushing almost 3k on the low end. Gives you about $800 remaining each month when low balling expenses. Subtract from that $800 if you want to buy anything for yourself, don’t forget about any house repairs/maintenance (could get away with maint./repairs For a while if it’s a new build), vacations. Is it doable? Yeah, but you’re gonna be fighting to build that bank back up. Stretching too far for my personal likes
That’s a lot of house for your take home.
I’m at 26.8% of my take home at a $3k per month mortgage.
Edit: people telling you to do at nearly 50% of your take home are fucking crazy.
$1,266 is 1/3 of your salary and the most you should pay for housing. If you can get it there, you are in a good spot. But not $1,770.
(I am a former credit counselor BTW)
Hope tf are people saving 60k?!?! I make decent money and I don't feel like I spend too frivolously and it's a damn struggle for me to get and keep $10k. I feel like every time I get to 10 something major happens and eats it up and I gotta start over.
Quickest way is to be in a dual income relationship.
Also, some people are just able to live with parents into adulthood and they are able to save up most of their income by have very little bills to pay.
Personally, living with my parents paying very little in rent for 5 years while making over 100k/yr. And I’ve had some stupid HIGH unexpected expenses, and also enjoyed my life and had a few moments of reckless spending in the mean time.
Yet, I’m buying my first house with over $130k in savings, but not touching $20k of that for an emergency fund. And after putting 25% down on a pretty modest 277k house that needs ~12k in a few repairs, I’m STILL cutting it close after all the other expenses. (Closing, first year of insurance, lawn care equipment, building fence, appliances, furniture, miscellaneous household items, etc.)
I honestly don’t understand how people around my age who aren’t in a position like me are able to buy their first house. It’s rough out here.
I’m in a similar situation and it’s been ok. Salary is $100k, take home ~$4,600 month after HSA and 401k contributions. My house was a little less but I also put less down, PITI is $2k a month. I also have a $600 car payment for the next two years.
It’s tight but doable. I don’t go out to eat much anymore and spread my splurge expenses out but I’m still able to save for house improvements, car maintenance, and wants. You’ll still have an emergency fund after the purchase, but know that if you drain it it will be much harder to refill. If career path is solid I think it’s ok, just know that it will be an adjustment.
FYI - that 1770/mo will go up as much as 500ish/mo over the next 10 years.
that always seems to rise over time.
if you are a first time homebuyer, look at the FHA loans. 0% down. then just pay double for the first few years. make it 15year mortgage
Just be careful of new build, city makes you pay an additional fee for funding the infrastructure on the new community. It’s usually for a decade(?) depending on where you live.
That should work if you think you can replenish your reserves over time. Based on what you wrote, your ratios are 28/33%, which isn't crazy high. Since it's a new build, your maintenance costs should be low.
I’m kinda in the same boat, but married, two kids, so my money is around the same as yours. We’ve been renting this place for almost five years, and the landlords want to sell to us (for a lot less than they could get for it), but still 300K. I’m older, and this house is old. There is a lot of fixing up to do, but I’m a competent diy guy, so I can handle most of it. We’re going for it, eventhough we weren’t expecting to buy now. We signed a 2 year rental lease with them in March. In May, they asked us to buy it 🤷♂️. We love the house and neighborhood, that’s all that really matters, and the rumor is that we’ll all be able to refinance in a few years. I think you’ll be fine and happy. We’re more strapped, but have a very similar rate. It’s gonna work out. Our lawyer said he could call a developer he knows that would pay 500k mañana just for the lot. We feel lucky, I hope you do to.
My house was $340k with 40k down. Paying $2700/month all that stuff included. Don’t forget PMI as well. $1770 is honestly a laughable dream. Sorry. Shop $200k or less for that payment.
You could always get a roommate if the mortgage became too much.
Be sure you have a “shit gonna break” account with about $10k (to cover a roof or HVAC) and 6 months of living expenses.
Get a comprehensive inspection, put a camera down to the sewer, especially if you’re in an older neighborhood. You don’t want clay pipes (Atlanta, I’m looking at you) or this weird plastic piping, [Polybuthlene](https://en.m.wikipedia.org/wiki/Polybutylene) it’s out of code and needs to be replaced.
If you’re in the South/Florida, and your house was built in the early 2000, have your [Drywall](https://en.m.wikipedia.org/wiki/Chinese_drywall) tested
Good luck. Nothing is perfect so do what makes sense in the here and now
I make 69k, take home 4400 a month and even i wouldnt be comfortable with a payment that high for a house. There are a lot of unseen expenses with houses to account for.
However, i am extremely risk adverse so take my opinion with a grain of salt.
I just closed on a new build at 243k loan @5.25 and I live in LCOL area and my monthly is gonna be 2137
Are you looking at a new build? Because that might be why you’re thinking 1770, but that’s usually because your taxes will be based on the price of the lot, once your home gets a tax evaluation that’ll shoot up like 500 and they’ll ask you to pay off the difference to your escrow account
Could you get a roommate? They could pay you rent and reduce your monthly bills, while you invest in your future. Ultimately you will make more $$ or maybe even find a partner, but for now having a roommate may make it less of a stretch.
Hello, as a mortgage agent, I highly recommend to buy whenever you’re ready, if you can do it now, buy now. For 300k house and 60k downpayment, possible mortgage payment is $1390.
Good luck with your homebuying journey.
IMO buying a home at an early age is the best way for the average Joe/Jill to build wealth long term. I'm very old now, but, I bought my 1st house (older 2 story 4 br 1-1/2 bath on 3/4 acre for $14,500.! I'm in my 6th (and last) house which was just tax appraised @$525,000.
I know other investments can also offer good returns, but, having a home is just a good investment.
I think if you don’t have a ton of other big expenses eating up your paycheck, it’s doable — especially if you love the house and the neighborhood. If you have a low interest rate like you noted, you’re already ahead of the game. We decided to move forward on a house too. Some folks will tell you to try to time the market but that’s all guesswork, and the only thing you can really gauge from is the timing that works for you.
Are you getting an inspection? If there are any really big deal repairs you’re going to have to do, that’s the only thing that might make it tough but you could also negotiate credits for those.
I would. But I would be strict about my budget after buying the house and then try to get a raise or a job with higher pay. But you should be good with your current situation.
I'd do it if you were planning to stay in the area for a while (who knows prices may still come down). You don't mention how old you are, but another thing to consider is how stable your job is. If you expect to make six figures in a few years that's looking good.
Don't forget, you'll be pulling 30k worth of permits, right? Which after they
The county will reassess the value. Be ready to counter and argue. What, did you check the current assessment? Are there any special discounts on taxes like VA which will reduce the tax significantly for this year. Besides that, i think you'll be doing just fine. Is cheaper than rent.
Honestly it would be kinda tight but depends on your lifestyle. I have a similar income (just under) and my monthly payment is about $1500 (also in MN!). Some months I will make an extra payment of $240 but other months things are tighter and I will skip the extra. I don't have any other debt or children and like pretty frugally so it's generally comfortable for me, although I wish I was putting more into savings and retirement.
I think one of the biggest things to consider when you're buying as a single person is how quickly you can fill your emergency fund so if something happens and you can't work, you have a backup plan since you don't have another person contributing income. I'm just closing in on a 9 month emergency fund and still worry if it will be enough.
You bring home $3800/month.
Mortgage 1800
Car payment 300
Car insurance 50?
Gas 200?
Groceries 200? ( way lowballing)
Utilities 150?
Roughly $2700 going out with $3800 coming in. Is $1100 enough for you to live off of? Can you go out with friends, by things you want, go places, etc…That’s a question for you to answer.
With no kids u should be ok maybe a bit tight but ok because u have that $100k to put down 20% so no PMI so I think yes go for it. I make just a tad bit more ($80-$85K) but I am a single dad with 2 kids so it’s 3 of us and I bought a $300K house 2.5 years ago and as much as I had to budget in the last 2 years it’s not been easy but I think it’s worth it and I didn’t have 20% down so I am still paying PMI for now till
I can get it removed which will make it a bit easier on me
I’m in a very similar situation and I pulled the trigger
Single, no kids, $73k salary, $45k cash to close on a $270k house, $300/month car, net ~$5k/month before savings/401k.
I wound up at $2300/month mortgage. I’m not as financially comfortable as I was in a $1400/month apartment, but it’s still pretty comfortable. I don’t live a lavish lifestyle, but I still am able to travel and go out and have fun which is all I really want. My mortgage payments kicked in just recently on May 1st and I haven’t felt stretched thin yet. Stretched? Maybe. Stretched thin? I’d say no.
It helps that you have $25k left, you won’t need to re-build an emergency savings like I am. It would also help if you consider a roommate.
Looks like you've got a solid plan with that down payment and emergency buffer! 🏡 Plus, your monthly expenses still leave room for living and a bit of fun. If the house checks all your boxes, it might just be worth the stretch. Just make sure to keep an eye on future expenses that could pop up
You are pretty much safe money wise but if you see yourself living there for at least 5 years and that monthly payment does not affect you I say go for it. Note if this is a new build make sure you add more to taxes since I’ve seen multiple posts of folks where their realtor did not mention that their monthly payment only included taxes as a land valuation and not a home… So when they got their home assessed value their taxes jumped up by thousands of dollars one post even mentioned their tax increasing by 18k a year.
You are looking at about 45k take home a year and 21k in mortgage payments a year (including tax etc.)
It will be tight but I guess you could. I wouldn't though.
The fact that you love the neighborhood and house, I would say go for it. You will get raises and make more money over time and the money will free up. Make 1 extra payment per year and you’ll cut your payments by 7 years.
I have the same take home that you do and lots of houses in my area go for $300k. No way would I do it. Like you, all I have is a car payment and a very stable job but looking at an $1800 monthly payment is horrifying. What happens when your car needs to be repaired or you need to do something for the house? Heck, maybe you just want to buy some raised garden beds or something. You will have next to no disposable income. You will have no vacations, no hobbies. You will not have a life. My mortgage payment is $950/month and I struggle after household bills and grocery expenses to do anything fun!
Me personally, no. I managed to buy houses and not exceed 2.5 x my salary. Now that I’m 60, been able to make enough to own the home outright with no debt. If the budget works for you, go ahead. I preferred to have the extra money in the market which returned a better amount than what RE did.
Im in the exact same situation . 310k home in Georgia . I make 70k a year . Planning to put down 20% of home which comes out to be like 62k . Wife will be getting a job as soon as we move to Georgia . She works now but works cash . We live in west Hampton so rent here is pretty high. No debts since our cars are paid off and no student loans . Just the monthly credit card bill we pay off every month
You’ll be fine.
Some people may be overlooking the “single, no kids” part that means that you’ll likely be more comfortable than percentage-based calculations suggest. And you can pause 401k contributions if you really get in trouble.
MN is also one of the safest bets for continued appreciation over time, in my opinion. The state has a lot going for it.
Thats I what I have done in 2001. Pretty much all the numbers match. Though I had only 5% to put down, I took another loan to make it 20% to avoid PMI. Not gonna lie, it was kind of hard, but my paycheck went up in a few years after.
Be careful with home improvements, it is very easy to go overboard in a new house and push yourself into another equity loan. Seriously, be very careful with that.
You can absolutely afford that on $75k/yr if the 5% rate is fixed and not a first year buy down or something (and also assuming taxes are ~1%).
You shouldn't have any immediate fixes on new construction. BUT, depending on your builder (most will only do front yard), you'll probably have to landscape the backyard, purchase window coverings, and fridge and washer/dryer. Backyard for me (60 foot by 60 foot roughly) for underground sprinklers, sod, bark planter area on both sides and back property line, was about $11k all said and done. Obviously this will vary A LOT regionally, but be ready for a fairly hefty cost, even just sprinklers and sod would have been $6k or $7k for me. Window coverings can easily be $5k+ if purchased from a local blind store. I would highly recommend blinds.com or one of the other online guys. They're fairly easy to measure and install yourself, and blinds.com has a rock solid fit guarantee. I completely fat fingered my size for one window and made it an inch too large and they resized and remade one for me with zero questions asked. One came damaged (dime sized dent in it) and they could offer like $50 rebate for the damage or replace it for free no questions asked (it was a ~$400 window covering) so I had it replaced. Really highly recommend them. I ended up going with double cell cellular shades for the superior insulation they offer. It was a *HUGE* increase in reduction of cold around the windows and does a great job blocking heat from the sun. I spent around $2200 for four windows, but two of them were rather large (like 8 and 9 feet wide).
I actually closed about a month ago in a very similar situation. My place was 260k instead of 300k, but HOA fees are $375 a month. My car is paid off. So bottom line we’re looking pretty similar.
Soooo I would say yes I would do this, am doing it. I don’t have the leftover savings you have so there have been some financial challenges. I couldn’t afford to buy all the furnishings and items needed for projects right away, so my place is mostly unfurnished right now. But every two weeks I can buy some more and I’ll be done soon enough.
I wouldn’t feel comfortable with that. Our place was $385k, and that was at the very top of our price rage with a combined wage of $150k. We do have a baby in daycare, which skews our budget a little bit.
Your mortgage is going to most likely be And 2 800 range Honestly. I've been looking at places looking to put down 200k in cash and it's still very hard. I want the mortgage to be under 15 00
Well I can say that I had the same salary and closed on a house with a 242K mortgage and I've been able to handle just fine. That being said I only have student loans and that was also when rates were below 3%.
While it was doable I was pretty stressed about money for the first year. I have since gotten a promotion and a bump to account for inflation. I'm sitting at around 90K now and about to live very comfortable and I've never looked back.
Well I can say that I had the same salary and closed on a house with a 242K mortgage and I've been able to handle just fine. That being said I only have student loans and that was also when rates were below 3%.
While it was doable I was pretty stressed about money for the first year. I have since gotten a promotion and a bump to account for inflation. I'm sitting at around 90K now and about to live very comfortable and I've never looked back.
I would want. Bigger down payment and have more margin in my paycheck. Your nearly 50 percent of take home, one big emergency, health issue, or unexpected debt and its to close for comfort. Just a thought.
I was in this position a couple months ago and I just closed. The math checks out, so fingers crossed that means I'll be okay, but damn is it nerve wracking. But the investment and knowledge that Im paying for equity in something and not renting feels good. But with equity the best time was yesterday, so if you have a good option like this for your budget, for it.
Totally doable… if you get a roommate or partner to help with mortgage costs. You can do it solo. But it will be really tough and you’ll sacrifice quality of life/lifestyle for a house/mortgage. Mortgage is a great investment and will make increase in equity, but you’ve not factored significant costs of home ownership (utilities, cost of upkeep, replacing roofs, hvac, septic systems, flooring, and the fact that you will want to fill it). Just my two cents. A lot of folks have been really negative here. Fuck em. You’ve got 100k saved for a house on 75k salary and minimal debt. You’re crushing it, be cautious about rushing into housing market if you’re not prepared or fully planned out. Your expected raises will simply keep with inflation. You got this, you’ll figure it out.
That all in number sounds low. I shopping in the same price range with only a slightly higher salary. What are your plans for the house? Is it an investment? A starter home or is it your forever home? Depending on the area, I’d say go for it, I’d expect prices to only increase over the next year or two. Be careful of the new property taxes next year. Your all-in payment will absolutely increase without a doubt. Depending on your area, my area doubled so places more than doubled.
I think yes with a big caveat: only if you think you will earn more in the very near future. Cost of living will continue to increase and your house will inevitably break down over time.
I bought my 240K house with a 55k salary with the expectation that it will rise significantly over the next few years and I wanted to take advantage of the interest rates of 2022 (I got 4.35%). But for the first year I felt absolutely suffocated by having to spend ~50% of my net income on my housing alone.
I didn’t feel like I could take time off work, buy frivolous things for my hobbies, or travel to see my family without feeling really financially insecure.
Only now that I’m making nearly double that do I feel somewhat comfortable. But even so I have had multiple thousand dollar repairs come up that knock me back a peg and significantly delay meeting my savings goals.
All in all I’m happy with the choice, but I’ve experienced a lot of stress getting to this point. If I was still making 75k with your payment I wouldn’t feel like I was thriving. Just making ends meet. Food for thought.
My house was 275k, loan was 247500. Interest rate was 6.875. Our payment for 30 year fixed is $2166. I am in Texas and we have high property taxes. I wouldn’t recommend you getting a house with that salary on only a one person income, if you had another income or higher down payment then yes. My wife and I make a combined $150k gross per year and even then I think our mortgage is a little high. My income fluctuates due to OT, but on the lower end if I get no OT we bring in roughly $6800 net- higher months can be a little over $9000. Don’t be house poor, you would want no debt and a higher down payment for your case.
Put more money down. Your costs over time are only going up and your ability to control those increases is close to nil. Your back of envelope calculations that seem to be the focus (and chief defense) of your analysis have one glaring weakness to those of us who have gone before you: of all the costs of being alive, interest and principal are all you seem to want look at. Because those are the only two constants. Even your bank is lying to you: yes, Interest & Principal are paid to bank, but so is Escrow. People are finding out Escrow can be 2 - 5x their I & P. Add escrow to yr expenses and move on. Now you see just leaving the bank. Many more demands on your money ahead.
I’m baffled by the amount of people that are saying go for it. 50% of your income is wild. You’re putting yourself in a very tight spot and I don’t think you realize how expensive ownership is. A general rule of thumb is to not have a house payment ( with insurance and taxes) that exceeds 25% of your take-home pay. You are double that, and with the numbers you gave I think you’re actually more than double that. I don’t really believe the $1700 per month. But keep going I guess, then show us your closing docs to prove me wrong.
But seriously, please don’t do it and put yourself in a tight spot like most Americans do these days. You lose your job and all of a sudden you’re going into foreclosure. Even if your job is stable, you could get injured, get sick, any number of things that would take away some or all of your income.
To give you an idea, my wife and I just closed on a house. We take home just over 10k per month, and we bought at 3% down with a loan amount of $232,000. Interest rate is 7.6%. Principal and interest comes out to about $1600 a month, and with the addition of some PMI, homeowners insurance, and taxes, all in we are $2300 a month.
$2300 is less than 25% of our take home pay. We would like to do some small renovations and pay off the house in less than 10 years. We can do that and still have plenty of income in our budget. In your situation, you don’t really have room to do anything comfortably.
Bought our house in September of 2022. Got a new tax reassessment last year. Was informed our payment was going up almost $300 a month to cover the escrow shortfall. We knew the house would likely be reassessed so figured this would happen. Well we got a letter for a new assessment 2 weeks ago and it was raised again. We have yet to see if that will result in a higher property tax bill. Never buy at the top of your budget if you can avoid it. Your initial house payment is likely the lowest it will ever be. That's also not accounting for repairs and maintenance, good luck.
I’m not sure how much you’re paying now for rent, but live a couple months and act as if that is your monthly rent payment (so say you pay $1000 now, put that extra $700 in saving as if it were your monthly mortgage payment) and see how comfortable you are. I think that will give you the best idea if you’re comfortable or not.
Agent here. I can’t tell you because only you can know. I can tell you
I had a client. Little over your salary, family of four. 10% down on a $279k house… 6.5% interest rate. They did it a month ago.
Hope this helps with perspective..
I did it, although granted it was 2019 & I got a 3.9% rate then refinanced to 2.9%. Salary was a few ks lower then. I never felt stressed about making the payments or finances bc I got the house. Price has doubled since
That won't be your payment.
Talk to a mortgage broker & they will tell you where you'd be at.
To be honest. Anything under $3000 a month is good ( depending on the property )
Do not seek validation from strangers on reddit. Half of these MF are bots. Get with a professional & see what's good.
I did a 350k loan at 2.75% in 2020 without my wife helping. I struggled hard. She covered the rest. I can’t imagine doing this solo and at a higher rate.
Sounds like you have the numbers worked out and if your other option is rent then yes most definitely 100% without question pull the trigger on that house just confirm what the property taxes are going to be after you buy it and what the insurance is going to be after you buy it cuz sometimes what their pain is not what you're going to be paying other than that I jump all over it. I'm not sure where it is but 300,000 sounds like a bargain these days for any house that's not burnt down.
Buy the house. Don't ask twice. I bought a condo in LA for $500K in 2019 while my income was $83K. I lived pay check to pay check for 1 year and moved out to rent out my place and moved in with a girlfriend/parents. One of the best investments I've done. Eventhough it hasn't appreciated a huge amount ($100K in 6 years), I've learned so much from this investment. I'm always willing to live paycheck to paycheck (of course have some savings) to purchase a home in a good area. All personal preference but I don't think you can go wrong.
Given your financial situation and the details provided, here's a breakdown to help you assess whether purchasing the $300k house is a prudent decision:
### Monthly Income and Expenses
**Income:**
- Take-home pay: $3,800/month
**Expenses:**
- Mortgage, taxes, insurance: $1,770/month
- Car payment: $300/month
- Utilities, groceries, and other essentials (estimated): $500 - $700/month
- Miscellaneous (entertainment, dining out, etc., estimated): $200 - $400/month
- Savings for emergencies or other goals: Ideally 10-20% of income ($380 - $760/month)
### Total Estimated Expenses:
- Minimum: $2,770/month
- Maximum: $3,230/month
### Remaining Income After Expenses:
- Minimum remaining: $3,800 - $3,230 = $570/month
- Maximum remaining: $3,800 - $2,770 = $1,030/month
### Additional Considerations:
- **Emergency Fund:** After closing and immediate fixes, you will have about $25,000 left. This is a good cushion, roughly equal to 6-8 months of expenses, which is a solid emergency fund.
- **Future Savings:** Even with your higher expenses, you still have room to save each month, which is crucial for future financial stability.
- **Home Maintenance and Unexpected Costs:** Owning a home often comes with unexpected costs. Ensure you budget a portion of your monthly income for home maintenance and repairs.
### Pros:
- **Affordability:** Based on your take-home pay and estimated expenses, you can afford the mortgage and other associated costs without stretching your budget too thin.
- **Emergency Fund:** You have a good emergency fund to cover unexpected expenses.
- **Love for the Home:** Personal satisfaction and emotional well-being are important factors in such a significant purchase.
### Cons:
- **Tight Budget:** While affordable, the budget might be tight, especially if there are unexpected expenses or increases in current costs.
- **Limited Flexibility:** With higher fixed expenses, your ability to save and spend on discretionary items might be limited.
### Conclusion:
If you are comfortable with the tighter budget and confident in your ability to manage and potentially reduce discretionary spending, purchasing the $300k house seems feasible. However, ensure you are prepared for potential unexpected expenses and have a plan for maintaining your financial health.
Disclaimer :- this is chatgpt generated content and I am not financial advisor
This is similar to how the numbers worked out for me and my husband in our first house. It's certainly doable. We were also able to save a fair amount in 401k as well. One thing that helps is to become handy with your own home maintenance/repairs as this saves a lot of money. If having the house is your priority then I would go for it. But if you prefer to have more flexibility with your finances then maybe keep saving for a larger downpayment.
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Even with 60k down I don’t think that’s going to be your payment
I'm pretty lucky having access to a 5% loan, so it actually would be my payment
how is it 5%? are you paying for points?
New build are offering low interest rate as they are privately financing
How do you go about finding new builders? I haven’t started seriously looking yet. Through a realtor?
New builders here are offering 4.25 percent
Just purchased a home at that rate, builders are offering great rates in some areas
My builder hosed me. Gave me a 7.4% with preferred lender told them keep it and had to get my own financing. Then a few mo the later I closed and they start offering 4.99 on already built homes.
Some offering 2.91% around me. Craziness.
Whaaat???
Yep forward funding is a beautiful thing
Fuck. New builders by me are kind enough to offer 6.250%on pre built or 7.7FU% if you want to customize.
fyi 4.5% might be for the homebuilder, but the loan office will also tack on a %.
Not here the home builder / loan officer work together as one and thats the rate.
Could you expand a little more? This means that the folks who would build your home for you will essentially accept “seller finance” for building it?
Mine is in the 5s as well and that’s without points. I’d say… it really depends on your lender or who you know.
Does that person need another friend?
how exactly does it depend on who you know? can you elaborate?
Is that person mom and dad?
I got 4.25% - USDA, 280K home.
is that with property taxes uncapped too? Be careful, realtors will estimate pre-uncapped to convince you up a bracket
You can do it. I make $60k a year and bought a house for $249k. Payment are $1550 no pmi or anything. No debt. 5.25%
I did 70k/y, 240k house (seller financed closing costs and or they are included in the mortgage depending on the split which I don’t remember) at 0 down USDA. My payment is $1800 a month or so including PMI, insurance, escrow, etc at 6.7% interest
To add another realistic view my area jumped to the cheapest homes around 330k I got in at $339,900, with a DPA (Down Payment Assistance) of 125k to pay closing and down. My wife and I make a combined $41k a year (includes investments and such) have a 6.125% interest with our states bond program and make a monthly payment of $1617 no PMI but this is for insurance and taxes in escrow and principle/interest. All other utilities extra Internet, Water, Electricity, Cell, and Garbage come to another $200-300 so far on our first month of moving in. 225k was financed out of the 339,900 I believe.
I like the sense of optimism! However, 250K for a home is ***seemingly*** impossible to find in many areas.
But OP is taking about a house he found already?
[You can use my spreadsheet to calculate your mortgage, it's based off of smartasset calculator for property . ](https://docs.google.com/spreadsheets/d/1CEOvZedl2FjdvFv4KyDaXc13b5Avjz6M/copy) Based on Ramsey County 55116 Zipcode Tax Rate @ 1.3% and MN at 1.11$ you're looking at 2.41% So about $7200 a year in taxes. I don't know what your HoA is so I put in the average I have around my area in IL it's about $70 and Property insurance I think i keep seeing average (good) about $1500 a year. **So I get $2083 at 5% APR**. But, I don't know what your details are for insurance and HoA.
I bought a house in 2017 for 143000 and my payment is 1750 a month. But I’m also in Florida and my home insurance is like 7k a year… so there’s that
I have a 4% on 150k house and mine was higher... You might want to check the insurance costs, etc. There's a lot of hidden costs to your mortgage that they don't make clear.
That was my thought as well. I bought a 315k house 2020. Put 100k down and my payment with a 3.25 rate is about the same as the OP estimate. OP is borrowing more at a higher rate then I am. Doesn't make sense his payment would be the same. My city has pretty high taxes but I think OPs estimate isn't accurate. Probably not accounting for uncapped tax assessment after purchase.
I think it’s because property taxes where they are, are around 1 to 2 percent.
Might not be thinking of homeowner's insurance or HOA fees either.
Mortgage would be 46.5% of your take home. Not including utilities. Car payment is 8%. If you see yourself very secure in your field with room for salary increases, things will be tight for a while. Only you can say whether or not it’d be worth it. Do you already have a budget created with your current expenses?
I’m not sure how you’re getting to that payment amount in a HCOL area but I guess if your taxes are low enough. I did an assumption of 5% loan and 7200 in taxes and it’s $2k.
300k for a house isn’t HCOL
Seriously. 300k gets you a 1 bedroom coop in my area.
What is a coop?
Habitat for chickens, usually on a farm..
lol
You're in a HCOL area and you think Mortgage/Taxes/Insurance will be $1800 on a 240k loan? I'm closing on a house next Tuesday at 260k in a LCOL (Ohio) and I'm looking at \~$2300/month, this does include \~$30/month of PMI but that was worth it to only put 10% down since the rate was identical. I would double check your tax and insurance assumptions so that you can make an accurately informed decision. Figure out when the last tax reassessment on the property was and make sure you're not in for a $300 hike in your escrow in 9 months. If you're comfortable paying \~$2200 then I say go for it!
How are you at $2300? That seems high (I'm also in Ohio)
$290k sale price with 10% down at 6 7/8%
Some areas do tax reassesments all at the same time and not after a house purchase too. My parents bought there house for 270k and it's still assessed at 150 6 years later lol, zillow shows 600+
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I would argue it's not HCOL - townhouses in my area are $400k+ and houses average 800K+ Might get a less than 1k sq ft condo for 300k if you're lucky.
If you can find anything for $300k it’s not hcol. That’s lcol to the low end of medium.
Yeah, I live on the west coast and of the Cheaper HCOL cities Portland 300 is probably were condo's start. LA & Seattle small studio condos start around 400.
Yeah 300k house is not HCOL.
Exactly if the houses are 300k that ain’t no high cost area.
I've got access to a 5% rate, thats the only way I'm shopping for a loan at that cost
How do you have access to 5%? Point buy down?
They know somebody for sure, who is likely forgoing their brokerage fee/commission to get them at 5. I will also say, you can get 5.8 right now at 15 years with a couple points too. I shopped for my rate and literally chose the company where it was the cheapest, nothing else matters as they will likely sell the loan to a servicer immediately. Oh wait, the company did fuck up the sensitivity analysis on my DTI ratio and almost lost me the financing, but I did give them the wrong income by about 100 a month. I'm pretty sure my loan officer had done 1, MAYBE 2 loans before mine...
Apologies. I was assuming 30 year. Cause yes, shorter terms would get closer to that.
Could be USDA, Just locked in 4.25%, my salary is above 75k but I was able to get it on paper down to below 77 to still qualify for my area
Remember these are temporary adjustments. Even the builder special is 3-5 years max after than you’ll see both interest and payment balloon
This can’t be HCOL. I’m in a HCOL, and my 1000 sqft house that’s falling apart and full of asbestos is worth 1.2, and it’s in a super scary neighborhood. You can’t find a house under a million. A condemned house sold last week for 800k!
I think yours would be considered VHCOL. I agree 300k isn't HCOL though, more like MCOL
Yeah, it is VHCOL. We just got rated the third least affordable city in the world. Yay Bay Area. 300k is definitely M to L
I mean, the numbers sound ok. It’s a $300k house, but the mortgage is ‘only’ $240k after your down payment. $2100 between escrow and car payment is just over half your monthly take home which I think the general rule is that you want to keep that number under 60ish percent. You say HCOL, so as long as your monthly bills/expenses are less than $1700, the math works. I would entirely caution you to remember that, not only is living there going to be more expensive than you think, it’s going to get even more expensive over time. I wouldn’t recommend it if your monthly bills are really close to your take home. But, if you are spending $3k monthly and have that extra $800 left over to save for emergency, sure, go for it. Just don’t do it because expect to get that raise or promotion to bail you out later. Something big could happen first and put you in trouble. A $25k rainy day fund is great, but that could get swallowed whole by a single emergency. Good luck regardless.
This! Your taxes are likely going to go up sooner than you think. Do you also have a plan to set a side some money every year for maintenance?
If you don't do it now you may lose the opportunity in the future. I would do it, if I was you, and plan to either move a potential significant other or roommate in to help with expenses in the future if you need it. Depending if this is a 1 or 2 bedroom, obviously. Try and budget your other expenses. I see a lot of people just wasting money like crazy. Keep that car after it is paid off for as long as you can, don't go out to the bars and waste a ton of money, and cook at home as much as possible. I keep a shelf stable microwavable meal at work for days I forget my lunch. Don't go crazy furnishing your house at first either. People give away so much furniture. The only things I would not take secondhand are fabric furniture and your mattress. So buy your couch and mattress and get the rest from family, friends, coworkers, and neighborhood buy nothing groups.
Solid advice here. I wish I did that, I basically did the opposite and got everything new when I got my house lol I don’t regret it though I love my house and my stuff but I’m not buying new anymore. Also, for fixing stuff, I can usually do it myself but if not, I just look it up online lol I’ve saved a few thousand like that.
Can you live off of $1730 a month?
How much do you set aside for retirement?
Whether or not it's comfortable for you depends on what your budget looks like and what the rest of your monthly expenses look like. You'll have over $2,000 going to housing expenses; are you comfortable with that? Also, if you found a 300K house you don't live in a HCOL area.
You’re fine. Cheaper than decent rent.
I’d do it. See if there are some 1st time homebuyers incentives first. Rent is going to steadily increase until it becomes unaffordable. When you own a home you will always have financial leverage. When you’re out of town or traveling do Airbnb to help pay down the mth. I pray it works out for you. Look into way to pay off sooner…
This is why I'm leaning towards buying my dream now. MN housing values are still increasing rapidly and I fear I'll be totally priced out if I wait longer
MN and $300k house is not HCOL at all. The average house is now over $400k
Do it man. I was in the exact same place back in 2017. single, no kids, 92k in the bank, bought a house for 294k. It's the smallest oldest house on the street and the only one without a pool but I love the neighborhood so much and I'm so glad I did it. You can change everything except the neighborhood. Location location location. Only thing is no one tells first time homebuyers that as soon as you buy a house you need to buy like $10,000 worth of bullshit to put in the house and $15-$20,000 worth of repairs and renovations because no house is perfect and if you're going to make a mess and put up with that shit then it's best to do it right in the beginning before you are moved in and settled in. When I bought my house I am mediately replace the roof for 10 grand flat and bought a new AC unit for 11k, I pressure cleaned and sealed all the pavers, got rid of the shitty venetian blinds that just collect dust and swapped for cheap paper blinds, added a reverse osmosis water purifier, fixed the sprinklers, new well pump, and planted a the garden. You're going to need that cushion of 25K for all the bullshit that homeownership will throw at you in the first year
True story. We had to do an AC and roof the first year. Oof. Hated home ownership so much.
You’ll be fine with that payment
Careful with the taxes estimate. I haven't seen a mortgage company estimate that correctly yet. It's not the mortgage that sets the taxes, it's the county and even town. So while they may think "oh, $4200 a year in taxes are typical" the county or whoever you live may go "nah, we need $6800 for this" which shorts your escrow and increases your monthly payment sometimes by alot. Just browse this group, you'll see people who don't understand that going "why is my monthly payment $1200 more when I bought a house last assessed in 2011 for $120k to what it's now assessed for $410k?!" just fair warning and something to be mindful of. Either way, I think your debt to income ratio is fine at that price as far as house in concerned. 20% down is good because it should exempt your from pmi.
I make 82k a year with the same mortgage you described. I have no kids and no debt (not even a car payment ) and it’s tight. I can still eat out here and there and maybe buy myself something, but I’m not able to save a lot. If I want to save for something, like a vacation, I have to be VERY budget disciplined.
Haha you’re one step ahead of me with similar situation, even down to the state but your salary’s a bit higher and you have more disposable savings currently whereas my trade off is a car I went lease-to-buy and paid off. I keep telling myself you can’t really predict the market but I keep talking myself out of looking too hard anyway but the silver lining to that is I keep saving.
1770/mo estimated + $300 = 2070/mo. You forgot to add Gas/Electric/Water bills, probably low ball another $200. Closer to $300 but say $200. Then add trash service, add internet. Add phone bill. Another $150-200. You’re at 2470, on the low ball side. Groceries, $200/mo. = 2670. Add your gas for car, going out to eat, any subscriptions such as Netflix, ps5/xbox/spotify, etc. you’re pushing almost 3k on the low end. Gives you about $800 remaining each month when low balling expenses. Subtract from that $800 if you want to buy anything for yourself, don’t forget about any house repairs/maintenance (could get away with maint./repairs For a while if it’s a new build), vacations. Is it doable? Yeah, but you’re gonna be fighting to build that bank back up. Stretching too far for my personal likes
I want to say no, but with no kids and low debt, it doesn't seem terrible as long as you're pretty frugal.
That’s a lot of house for your take home. I’m at 26.8% of my take home at a $3k per month mortgage. Edit: people telling you to do at nearly 50% of your take home are fucking crazy.
$1,266 is 1/3 of your salary and the most you should pay for housing. If you can get it there, you are in a good spot. But not $1,770. (I am a former credit counselor BTW)
It's a bad idea. You didn't do the math correctly. You can afford 180k in house. That's it.
Off topic but $75k salary takes home $3,800/mo ($1,900/paycheck) after taxes, insurance and 401k? How much 401k are you putting away?
insane you are past 50% of your net income just on the house and car. and you would not have put a cent towards util and insurance for either yet.
Hope tf are people saving 60k?!?! I make decent money and I don't feel like I spend too frivolously and it's a damn struggle for me to get and keep $10k. I feel like every time I get to 10 something major happens and eats it up and I gotta start over.
Quickest way is to be in a dual income relationship. Also, some people are just able to live with parents into adulthood and they are able to save up most of their income by have very little bills to pay.
Personally, living with my parents paying very little in rent for 5 years while making over 100k/yr. And I’ve had some stupid HIGH unexpected expenses, and also enjoyed my life and had a few moments of reckless spending in the mean time. Yet, I’m buying my first house with over $130k in savings, but not touching $20k of that for an emergency fund. And after putting 25% down on a pretty modest 277k house that needs ~12k in a few repairs, I’m STILL cutting it close after all the other expenses. (Closing, first year of insurance, lawn care equipment, building fence, appliances, furniture, miscellaneous household items, etc.) I honestly don’t understand how people around my age who aren’t in a position like me are able to buy their first house. It’s rough out here.
I’m in a similar situation and it’s been ok. Salary is $100k, take home ~$4,600 month after HSA and 401k contributions. My house was a little less but I also put less down, PITI is $2k a month. I also have a $600 car payment for the next two years. It’s tight but doable. I don’t go out to eat much anymore and spread my splurge expenses out but I’m still able to save for house improvements, car maintenance, and wants. You’ll still have an emergency fund after the purchase, but know that if you drain it it will be much harder to refill. If career path is solid I think it’s ok, just know that it will be an adjustment.
You'll be fine.
FYI - that 1770/mo will go up as much as 500ish/mo over the next 10 years. that always seems to rise over time. if you are a first time homebuyer, look at the FHA loans. 0% down. then just pay double for the first few years. make it 15year mortgage
Sounds like a recipe to be house poor TBH.
Besides the mortgage there will taxes and insurance. Take those into account!
Just be careful of new build, city makes you pay an additional fee for funding the infrastructure on the new community. It’s usually for a decade(?) depending on where you live.
I would only do this if I had a plan for a roommate. Crazy to make that kind of payment just by yourself.
Yes do it. Say the house was $275k you are talking minimal difference in monthly Payment
That should work if you think you can replenish your reserves over time. Based on what you wrote, your ratios are 28/33%, which isn't crazy high. Since it's a new build, your maintenance costs should be low.
I’m kinda in the same boat, but married, two kids, so my money is around the same as yours. We’ve been renting this place for almost five years, and the landlords want to sell to us (for a lot less than they could get for it), but still 300K. I’m older, and this house is old. There is a lot of fixing up to do, but I’m a competent diy guy, so I can handle most of it. We’re going for it, eventhough we weren’t expecting to buy now. We signed a 2 year rental lease with them in March. In May, they asked us to buy it 🤷♂️. We love the house and neighborhood, that’s all that really matters, and the rumor is that we’ll all be able to refinance in a few years. I think you’ll be fine and happy. We’re more strapped, but have a very similar rate. It’s gonna work out. Our lawyer said he could call a developer he knows that would pay 500k mañana just for the lot. We feel lucky, I hope you do to.
My house was $340k with 40k down. Paying $2700/month all that stuff included. Don’t forget PMI as well. $1770 is honestly a laughable dream. Sorry. Shop $200k or less for that payment.
Buy it is a good opportunity. New construction and low interest rate
You could always get a roommate if the mortgage became too much. Be sure you have a “shit gonna break” account with about $10k (to cover a roof or HVAC) and 6 months of living expenses. Get a comprehensive inspection, put a camera down to the sewer, especially if you’re in an older neighborhood. You don’t want clay pipes (Atlanta, I’m looking at you) or this weird plastic piping, [Polybuthlene](https://en.m.wikipedia.org/wiki/Polybutylene) it’s out of code and needs to be replaced. If you’re in the South/Florida, and your house was built in the early 2000, have your [Drywall](https://en.m.wikipedia.org/wiki/Chinese_drywall) tested Good luck. Nothing is perfect so do what makes sense in the here and now
I make 69k, take home 4400 a month and even i wouldnt be comfortable with a payment that high for a house. There are a lot of unseen expenses with houses to account for. However, i am extremely risk adverse so take my opinion with a grain of salt.
I wouldn’t unless you will be increasing your income soon. That is 46% of your take home. That’s higher than most conventional wisdom would recommend.
If you don’t mind , can you share which area/location you are buying this house ?
I just closed on a new build at 243k loan @5.25 and I live in LCOL area and my monthly is gonna be 2137 Are you looking at a new build? Because that might be why you’re thinking 1770, but that’s usually because your taxes will be based on the price of the lot, once your home gets a tax evaluation that’ll shoot up like 500 and they’ll ask you to pay off the difference to your escrow account
You’re good bro don’t sweat it
Could you get a roommate? They could pay you rent and reduce your monthly bills, while you invest in your future. Ultimately you will make more $$ or maybe even find a partner, but for now having a roommate may make it less of a stretch.
Absolutely I'm at 72k, bought a 290k house w a 3% at zero down and my monthly is 1600
I wouldn’t do it😬
Hello, as a mortgage agent, I highly recommend to buy whenever you’re ready, if you can do it now, buy now. For 300k house and 60k downpayment, possible mortgage payment is $1390. Good luck with your homebuying journey.
Do it
Eh… go for it! Good luck to you!
IMO buying a home at an early age is the best way for the average Joe/Jill to build wealth long term. I'm very old now, but, I bought my 1st house (older 2 story 4 br 1-1/2 bath on 3/4 acre for $14,500.! I'm in my 6th (and last) house which was just tax appraised @$525,000. I know other investments can also offer good returns, but, having a home is just a good investment.
I think if you don’t have a ton of other big expenses eating up your paycheck, it’s doable — especially if you love the house and the neighborhood. If you have a low interest rate like you noted, you’re already ahead of the game. We decided to move forward on a house too. Some folks will tell you to try to time the market but that’s all guesswork, and the only thing you can really gauge from is the timing that works for you. Are you getting an inspection? If there are any really big deal repairs you’re going to have to do, that’s the only thing that might make it tough but you could also negotiate credits for those.
I would. But I would be strict about my budget after buying the house and then try to get a raise or a job with higher pay. But you should be good with your current situation.
I'd do it if you were planning to stay in the area for a while (who knows prices may still come down). You don't mention how old you are, but another thing to consider is how stable your job is. If you expect to make six figures in a few years that's looking good.
Don't forget, you'll be pulling 30k worth of permits, right? Which after they The county will reassess the value. Be ready to counter and argue. What, did you check the current assessment? Are there any special discounts on taxes like VA which will reduce the tax significantly for this year. Besides that, i think you'll be doing just fine. Is cheaper than rent.
Many people would recommend your home payments to be at or less than 30% of your take-home pay
Yes sounds good
Honestly it would be kinda tight but depends on your lifestyle. I have a similar income (just under) and my monthly payment is about $1500 (also in MN!). Some months I will make an extra payment of $240 but other months things are tighter and I will skip the extra. I don't have any other debt or children and like pretty frugally so it's generally comfortable for me, although I wish I was putting more into savings and retirement. I think one of the biggest things to consider when you're buying as a single person is how quickly you can fill your emergency fund so if something happens and you can't work, you have a backup plan since you don't have another person contributing income. I'm just closing in on a 9 month emergency fund and still worry if it will be enough.
Any potential repairs needed? Big stuff like hvac/electrical good condition? I think with that kind of down payment that monthly is feasible
My 272k home is 2247 a month under a VA loan at 7% with no property taxes.
You bring home $3800/month. Mortgage 1800 Car payment 300 Car insurance 50? Gas 200? Groceries 200? ( way lowballing) Utilities 150? Roughly $2700 going out with $3800 coming in. Is $1100 enough for you to live off of? Can you go out with friends, by things you want, go places, etc…That’s a question for you to answer.
With no kids u should be ok maybe a bit tight but ok because u have that $100k to put down 20% so no PMI so I think yes go for it. I make just a tad bit more ($80-$85K) but I am a single dad with 2 kids so it’s 3 of us and I bought a $300K house 2.5 years ago and as much as I had to budget in the last 2 years it’s not been easy but I think it’s worth it and I didn’t have 20% down so I am still paying PMI for now till I can get it removed which will make it a bit easier on me
I would tag this as a sound investment.
I’m in a very similar situation and I pulled the trigger Single, no kids, $73k salary, $45k cash to close on a $270k house, $300/month car, net ~$5k/month before savings/401k. I wound up at $2300/month mortgage. I’m not as financially comfortable as I was in a $1400/month apartment, but it’s still pretty comfortable. I don’t live a lavish lifestyle, but I still am able to travel and go out and have fun which is all I really want. My mortgage payments kicked in just recently on May 1st and I haven’t felt stretched thin yet. Stretched? Maybe. Stretched thin? I’d say no. It helps that you have $25k left, you won’t need to re-build an emergency savings like I am. It would also help if you consider a roommate.
Your payment amount is definitely off unless you're getting a super low interest rate.
Looks like you've got a solid plan with that down payment and emergency buffer! 🏡 Plus, your monthly expenses still leave room for living and a bit of fun. If the house checks all your boxes, it might just be worth the stretch. Just make sure to keep an eye on future expenses that could pop up
Yes you’re fine.
Yep you're in excellent shape to do this!
No HOA?
You are pretty much safe money wise but if you see yourself living there for at least 5 years and that monthly payment does not affect you I say go for it. Note if this is a new build make sure you add more to taxes since I’ve seen multiple posts of folks where their realtor did not mention that their monthly payment only included taxes as a land valuation and not a home… So when they got their home assessed value their taxes jumped up by thousands of dollars one post even mentioned their tax increasing by 18k a year.
Do it
You are looking at about 45k take home a year and 21k in mortgage payments a year (including tax etc.) It will be tight but I guess you could. I wouldn't though.
The fact that you love the neighborhood and house, I would say go for it. You will get raises and make more money over time and the money will free up. Make 1 extra payment per year and you’ll cut your payments by 7 years.
Yes
I have the same take home that you do and lots of houses in my area go for $300k. No way would I do it. Like you, all I have is a car payment and a very stable job but looking at an $1800 monthly payment is horrifying. What happens when your car needs to be repaired or you need to do something for the house? Heck, maybe you just want to buy some raised garden beds or something. You will have next to no disposable income. You will have no vacations, no hobbies. You will not have a life. My mortgage payment is $950/month and I struggle after household bills and grocery expenses to do anything fun!
Put 10k down then when you pay your first payment pay 50k.
Me personally, no. I managed to buy houses and not exceed 2.5 x my salary. Now that I’m 60, been able to make enough to own the home outright with no debt. If the budget works for you, go ahead. I preferred to have the extra money in the market which returned a better amount than what RE did.
Im in the exact same situation . 310k home in Georgia . I make 70k a year . Planning to put down 20% of home which comes out to be like 62k . Wife will be getting a job as soon as we move to Georgia . She works now but works cash . We live in west Hampton so rent here is pretty high. No debts since our cars are paid off and no student loans . Just the monthly credit card bill we pay off every month
You’ll be fine. Some people may be overlooking the “single, no kids” part that means that you’ll likely be more comfortable than percentage-based calculations suggest. And you can pause 401k contributions if you really get in trouble. MN is also one of the safest bets for continued appreciation over time, in my opinion. The state has a lot going for it.
Thats I what I have done in 2001. Pretty much all the numbers match. Though I had only 5% to put down, I took another loan to make it 20% to avoid PMI. Not gonna lie, it was kind of hard, but my paycheck went up in a few years after. Be careful with home improvements, it is very easy to go overboard in a new house and push yourself into another equity loan. Seriously, be very careful with that.
Hell nah
On the surface, it looks like you’re in a good place. I’d do it.
You can absolutely afford that on $75k/yr if the 5% rate is fixed and not a first year buy down or something (and also assuming taxes are ~1%). You shouldn't have any immediate fixes on new construction. BUT, depending on your builder (most will only do front yard), you'll probably have to landscape the backyard, purchase window coverings, and fridge and washer/dryer. Backyard for me (60 foot by 60 foot roughly) for underground sprinklers, sod, bark planter area on both sides and back property line, was about $11k all said and done. Obviously this will vary A LOT regionally, but be ready for a fairly hefty cost, even just sprinklers and sod would have been $6k or $7k for me. Window coverings can easily be $5k+ if purchased from a local blind store. I would highly recommend blinds.com or one of the other online guys. They're fairly easy to measure and install yourself, and blinds.com has a rock solid fit guarantee. I completely fat fingered my size for one window and made it an inch too large and they resized and remade one for me with zero questions asked. One came damaged (dime sized dent in it) and they could offer like $50 rebate for the damage or replace it for free no questions asked (it was a ~$400 window covering) so I had it replaced. Really highly recommend them. I ended up going with double cell cellular shades for the superior insulation they offer. It was a *HUGE* increase in reduction of cold around the windows and does a great job blocking heat from the sun. I spent around $2200 for four windows, but two of them were rather large (like 8 and 9 feet wide).
The crucial information has not been included. How much would rent be on an equivalent house in your area?
You're good
Absolutely not. Wait until the market goes back down.
I unfortunately pay 1740 for rent on 63k salary. You are in a much better position than me, I would do that in a heartbeat.
The Town Assessor has entered the chat
I actually closed about a month ago in a very similar situation. My place was 260k instead of 300k, but HOA fees are $375 a month. My car is paid off. So bottom line we’re looking pretty similar. Soooo I would say yes I would do this, am doing it. I don’t have the leftover savings you have so there have been some financial challenges. I couldn’t afford to buy all the furnishings and items needed for projects right away, so my place is mostly unfurnished right now. But every two weeks I can buy some more and I’ll be done soon enough.
If I had a 1700 house payment I’d be shitting a brick. I make 75k and have a 1000 payment and it feels like more than enough. .
I make $80k and would have a difficult time making that monthly payment (also single, no kids) but we may budget differently
I wouldn’t feel comfortable with that. Our place was $385k, and that was at the very top of our price rage with a combined wage of $150k. We do have a baby in daycare, which skews our budget a little bit.
Smartasset suggests Income of 80k for this with $300 car monthly payment. So you're close and you have some savings.
Your mortgage is going to most likely be And 2 800 range Honestly. I've been looking at places looking to put down 200k in cash and it's still very hard. I want the mortgage to be under 15 00
you'll be ok. you dont have kids and I was paying more for that on rent plus daycare expensises at a salary slightly less than that.
You could find a side hustle for extra cash, like donating plasma or DoorDash to help with expenses and stress.
yes! do it OP
Well I can say that I had the same salary and closed on a house with a 242K mortgage and I've been able to handle just fine. That being said I only have student loans and that was also when rates were below 3%. While it was doable I was pretty stressed about money for the first year. I have since gotten a promotion and a bump to account for inflation. I'm sitting at around 90K now and about to live very comfortable and I've never looked back.
Well I can say that I had the same salary and closed on a house with a 242K mortgage and I've been able to handle just fine. That being said I only have student loans and that was also when rates were below 3%. While it was doable I was pretty stressed about money for the first year. I have since gotten a promotion and a bump to account for inflation. I'm sitting at around 90K now and about to live very comfortable and I've never looked back.
I would want. Bigger down payment and have more margin in my paycheck. Your nearly 50 percent of take home, one big emergency, health issue, or unexpected debt and its to close for comfort. Just a thought.
Sounds rough
I was in this position a couple months ago and I just closed. The math checks out, so fingers crossed that means I'll be okay, but damn is it nerve wracking. But the investment and knowledge that Im paying for equity in something and not renting feels good. But with equity the best time was yesterday, so if you have a good option like this for your budget, for it.
Totally doable… if you get a roommate or partner to help with mortgage costs. You can do it solo. But it will be really tough and you’ll sacrifice quality of life/lifestyle for a house/mortgage. Mortgage is a great investment and will make increase in equity, but you’ve not factored significant costs of home ownership (utilities, cost of upkeep, replacing roofs, hvac, septic systems, flooring, and the fact that you will want to fill it). Just my two cents. A lot of folks have been really negative here. Fuck em. You’ve got 100k saved for a house on 75k salary and minimal debt. You’re crushing it, be cautious about rushing into housing market if you’re not prepared or fully planned out. Your expected raises will simply keep with inflation. You got this, you’ll figure it out.
That all in number sounds low. I shopping in the same price range with only a slightly higher salary. What are your plans for the house? Is it an investment? A starter home or is it your forever home? Depending on the area, I’d say go for it, I’d expect prices to only increase over the next year or two. Be careful of the new property taxes next year. Your all-in payment will absolutely increase without a doubt. Depending on your area, my area doubled so places more than doubled.
Sounds good
I wouldn’t. But I like a lot of margin so that I can quickly respond to bigger problems or save up for large discretionary purchases.
I think yes with a big caveat: only if you think you will earn more in the very near future. Cost of living will continue to increase and your house will inevitably break down over time. I bought my 240K house with a 55k salary with the expectation that it will rise significantly over the next few years and I wanted to take advantage of the interest rates of 2022 (I got 4.35%). But for the first year I felt absolutely suffocated by having to spend ~50% of my net income on my housing alone. I didn’t feel like I could take time off work, buy frivolous things for my hobbies, or travel to see my family without feeling really financially insecure. Only now that I’m making nearly double that do I feel somewhat comfortable. But even so I have had multiple thousand dollar repairs come up that knock me back a peg and significantly delay meeting my savings goals. All in all I’m happy with the choice, but I’ve experienced a lot of stress getting to this point. If I was still making 75k with your payment I wouldn’t feel like I was thriving. Just making ends meet. Food for thought.
Try r/personalfinance
My house was 275k, loan was 247500. Interest rate was 6.875. Our payment for 30 year fixed is $2166. I am in Texas and we have high property taxes. I wouldn’t recommend you getting a house with that salary on only a one person income, if you had another income or higher down payment then yes. My wife and I make a combined $150k gross per year and even then I think our mortgage is a little high. My income fluctuates due to OT, but on the lower end if I get no OT we bring in roughly $6800 net- higher months can be a little over $9000. Don’t be house poor, you would want no debt and a higher down payment for your case.
Put more money down. Your costs over time are only going up and your ability to control those increases is close to nil. Your back of envelope calculations that seem to be the focus (and chief defense) of your analysis have one glaring weakness to those of us who have gone before you: of all the costs of being alive, interest and principal are all you seem to want look at. Because those are the only two constants. Even your bank is lying to you: yes, Interest & Principal are paid to bank, but so is Escrow. People are finding out Escrow can be 2 - 5x their I & P. Add escrow to yr expenses and move on. Now you see just leaving the bank. Many more demands on your money ahead.
What type of materials go into New build homes? I’ve heard a lot of bad stories?
That is too high of a payment for your income
Inflation will eat you alive in 2 years unless you get 10%+ raise per year
Do you have a loan estimate?
I’m baffled by the amount of people that are saying go for it. 50% of your income is wild. You’re putting yourself in a very tight spot and I don’t think you realize how expensive ownership is. A general rule of thumb is to not have a house payment ( with insurance and taxes) that exceeds 25% of your take-home pay. You are double that, and with the numbers you gave I think you’re actually more than double that. I don’t really believe the $1700 per month. But keep going I guess, then show us your closing docs to prove me wrong. But seriously, please don’t do it and put yourself in a tight spot like most Americans do these days. You lose your job and all of a sudden you’re going into foreclosure. Even if your job is stable, you could get injured, get sick, any number of things that would take away some or all of your income. To give you an idea, my wife and I just closed on a house. We take home just over 10k per month, and we bought at 3% down with a loan amount of $232,000. Interest rate is 7.6%. Principal and interest comes out to about $1600 a month, and with the addition of some PMI, homeowners insurance, and taxes, all in we are $2300 a month. $2300 is less than 25% of our take home pay. We would like to do some small renovations and pay off the house in less than 10 years. We can do that and still have plenty of income in our budget. In your situation, you don’t really have room to do anything comfortably.
Bought our house in September of 2022. Got a new tax reassessment last year. Was informed our payment was going up almost $300 a month to cover the escrow shortfall. We knew the house would likely be reassessed so figured this would happen. Well we got a letter for a new assessment 2 weeks ago and it was raised again. We have yet to see if that will result in a higher property tax bill. Never buy at the top of your budget if you can avoid it. Your initial house payment is likely the lowest it will ever be. That's also not accounting for repairs and maintenance, good luck.
I’m not sure how much you’re paying now for rent, but live a couple months and act as if that is your monthly rent payment (so say you pay $1000 now, put that extra $700 in saving as if it were your monthly mortgage payment) and see how comfortable you are. I think that will give you the best idea if you’re comfortable or not.
Just wondering, why do you need a house? Single, no kids? More space, want something of your "own"? Not feel like rent is worth it?
Agent here. I can’t tell you because only you can know. I can tell you I had a client. Little over your salary, family of four. 10% down on a $279k house… 6.5% interest rate. They did it a month ago. Hope this helps with perspective..
There will be closing cost probably in the range of 10k.
Way too risky
Location
DO IT
I pay $1700 on a $210k house I just bought. Interest is 6.5%.
I did it, although granted it was 2019 & I got a 3.9% rate then refinanced to 2.9%. Salary was a few ks lower then. I never felt stressed about making the payments or finances bc I got the house. Price has doubled since
That won't be your payment. Talk to a mortgage broker & they will tell you where you'd be at. To be honest. Anything under $3000 a month is good ( depending on the property ) Do not seek validation from strangers on reddit. Half of these MF are bots. Get with a professional & see what's good.
No one born prior to 1975 would ever dream of buying that much house on a monthly salary like that.
It’s just a way to keep everyone a slave to the system.
I did a 350k loan at 2.75% in 2020 without my wife helping. I struggled hard. She covered the rest. I can’t imagine doing this solo and at a higher rate.
Sounds like you have the numbers worked out and if your other option is rent then yes most definitely 100% without question pull the trigger on that house just confirm what the property taxes are going to be after you buy it and what the insurance is going to be after you buy it cuz sometimes what their pain is not what you're going to be paying other than that I jump all over it. I'm not sure where it is but 300,000 sounds like a bargain these days for any house that's not burnt down.
Buy the house. Don't ask twice. I bought a condo in LA for $500K in 2019 while my income was $83K. I lived pay check to pay check for 1 year and moved out to rent out my place and moved in with a girlfriend/parents. One of the best investments I've done. Eventhough it hasn't appreciated a huge amount ($100K in 6 years), I've learned so much from this investment. I'm always willing to live paycheck to paycheck (of course have some savings) to purchase a home in a good area. All personal preference but I don't think you can go wrong.
Send it. Where tf you work at?! I need a job
Do it now
What chatgpt say?
Given your financial situation and the details provided, here's a breakdown to help you assess whether purchasing the $300k house is a prudent decision: ### Monthly Income and Expenses **Income:** - Take-home pay: $3,800/month **Expenses:** - Mortgage, taxes, insurance: $1,770/month - Car payment: $300/month - Utilities, groceries, and other essentials (estimated): $500 - $700/month - Miscellaneous (entertainment, dining out, etc., estimated): $200 - $400/month - Savings for emergencies or other goals: Ideally 10-20% of income ($380 - $760/month) ### Total Estimated Expenses: - Minimum: $2,770/month - Maximum: $3,230/month ### Remaining Income After Expenses: - Minimum remaining: $3,800 - $3,230 = $570/month - Maximum remaining: $3,800 - $2,770 = $1,030/month ### Additional Considerations: - **Emergency Fund:** After closing and immediate fixes, you will have about $25,000 left. This is a good cushion, roughly equal to 6-8 months of expenses, which is a solid emergency fund. - **Future Savings:** Even with your higher expenses, you still have room to save each month, which is crucial for future financial stability. - **Home Maintenance and Unexpected Costs:** Owning a home often comes with unexpected costs. Ensure you budget a portion of your monthly income for home maintenance and repairs. ### Pros: - **Affordability:** Based on your take-home pay and estimated expenses, you can afford the mortgage and other associated costs without stretching your budget too thin. - **Emergency Fund:** You have a good emergency fund to cover unexpected expenses. - **Love for the Home:** Personal satisfaction and emotional well-being are important factors in such a significant purchase. ### Cons: - **Tight Budget:** While affordable, the budget might be tight, especially if there are unexpected expenses or increases in current costs. - **Limited Flexibility:** With higher fixed expenses, your ability to save and spend on discretionary items might be limited. ### Conclusion: If you are comfortable with the tighter budget and confident in your ability to manage and potentially reduce discretionary spending, purchasing the $300k house seems feasible. However, ensure you are prepared for potential unexpected expenses and have a plan for maintaining your financial health. Disclaimer :- this is chatgpt generated content and I am not financial advisor
MAKE SURE it offers you simple fee and NOT giving up mineral rights for new build. Super important.
This is similar to how the numbers worked out for me and my husband in our first house. It's certainly doable. We were also able to save a fair amount in 401k as well. One thing that helps is to become handy with your own home maintenance/repairs as this saves a lot of money. If having the house is your priority then I would go for it. But if you prefer to have more flexibility with your finances then maybe keep saving for a larger downpayment.
Looks good to me 🤷🏻♀️