Can I afford this house?

[jIM_Ohio]

There will be tax benefits when you move into house- your take home pay would increase relative to now, or you would get a HUGE tax return the first few years in the house.

Factor that into calculations.

[maat55]

Haha, thanks!

Hmmm...that would be pretty amazing though.

It is all going to depend on what we can save.

My plan for the next few years is to save:

2008: $15,000
2009: $25,000
2010: $30,000
2011: $35,000

That will total: $105,000

This is not counting my husbands income. I am hoping he can contribute $600 a month. That would be in 2010 and 2011 which would add up to another $15,000 on top of my $105,000.

Plus I am a teacher...so this is not counting any summer job I can snag.

And where am I right now? Haha...


I have $4,300 saved up. But it isn't too shabby since I just opened up the ING account on March 1st!

Remmeber to be patient, you have the ingredients to build a fantastic future, don't mess it up on, instant gradification.

Read The Millionaire Next Door and Financial Peace. These books will give you perspective on the many decissions you will have to make, along the way.

[LuxLiving]

Also don't forget to shop in the market a little higher than what you think you can afford. Say you both want to buy a house and spend NO MORE THAN 300,000. Shop the 310-315 range and offer less than 300. See if you can't get yourself a bit more house for your dollars by negotiating a good deal. Who knows? They may take your first lowball offer.

Just stick to your financial plan when you get out shopping. I know this can be difficult to do if one of you fall in love with a house. Make a plan and keep each other to the original plan. Go away from the house and sleep on it a night or two. Go back over the financial plans BEFORE you make any offer. Pinky swear to make each other stand strong long before you get to the shopping or negotiating part! IOW, don't be the downfall to your own best plans.

There is always another house!!

Oh, and not to be indelicate, but what kind of health is your father in? Is there a likelihood that you will inherit the family home?

And, I'd also be making a Plan B if once you all move in together if the family harmony situation is not idillic for your new hubbie. You may need to make a faster move than you are now planning.

[ScrimpAndSave]

Thank you all so much.


So you think $300,000 does sound like a reasonable amount that we will be able to afford?

Also, When we move out...I will be making around $70,000 and my (future) husband will probably be around $60,000-$70,000 (we hope!). But..he has $140,000 in student loans (darn law school). He insists on taking care of the student loans himself.

We both of 2001 Hondas...I have an Accord and he has a Civic...we are hoping they will last a looooong time.

As for my father...he is 74 and in fabulous health (thank you God). He has a lot more energy than I do and can run circles around me. I know that he has $400,000 invested in different stocks and mutual finds and the house is worth about $325,000 right now. That will all be split up between 4 children. So yes - at sometime in the future, I will be getting a somehow sizable inheretance.

[noppenbd]

I would decide how much you want to borrow rather than how much house you want, since you do not yet have your down payment saved up. That way the amount you want to borrow (say $170K) is fixed in your head rather than the purchase cost. Then if you end up not being able to save as aggressively for the down payment you will not end up overborrowing.

[disneysteve]

he has $140,000 in student loans (darn law school). He insists on taking care of the student loans himself.

Have you discussed how the household finances will be handled? Will you be keeping your finances separate? I know many people do that though I honestly could never live that way. We put all the money into the same pot and pay all bills and savings from there. We don't have "my" money and "her" money. It is all "our" money. So when we got married and I had $102,000 in student loans, it became a joint debt as everything we do and have is joint.

[ScrimpAndSave]

Yes, we have talked about that.

He feels like I should not have to pay for any of it. This is another reason why I am trying to base this whole buying a house thing on my income alone...so he can focus on paying off his loans.

We are figuring that he can pay a good amount on his loans, max out 401k and roth ira and the rest can go into the savings account.

[ScrimpAndSave]

Okay and just a few more questions...when I figure out how much I can afford in a mortgage, do I multiply my monthly gross or net income by .36?

At $70,000 my gross monthly is about: $5,833

At $70,000 my net monthly is about: $4,083

(I assumed 30% for taxes and other stuff taken out of my pay to get my net income)

So, do I multiply .36 by $5,833 or $4,083.

Also, should this total that I get after I multiply by .36 include the mortgage, principal, interest and insurance as well?

Thanks so much...I have really been wondering about this one...

[ScrimpAndSave]

For a $220,000 loan...5.5% interest rate....30 year fixed...it looks like the mortgage, interest and insurance would be around $1,600 a month. I wonder if that will be doable.

Then if we are able to save for the $80,000 downpayment, we will be able to get the $300,000 house.

Oh I hope so!

[Snave]

Where in the heck do you teach? I ask that b/c my wife was teacher and never saw a salary like that. She stays at home now, but I am thinking we need to move to where you are and try the two-earner thing again. By the way, you sound like you are taking all the necessary steps to get yourself prepared, so congrats and good luck!

[ScrimpAndSave]

Thank you so much. We just got an amazing contract...I have been there three years and we are finally getting paid what we deserve.

I am in the Lehigh Valley Pa.