If they have 20% down and meet the basic requirements they should have no problem getting a loan.
That is what I guessed. Thank you for confirming it.
You are hearing stories and don’t know the particulars. Those two points pretty much sum it up.
I would not buy a $250,000 house on $60,000 a year.
Do you have a preferred minimum ratio? I bought less than I could have afforded and am fine with it.
I agree. Many people buy the most house the mortgage company approved them for and find there’s not much left at the end of the month.
I had to look it up.
Chase says 28%
and that includes insurance and taxes.
The bank ratio is usually at the high end. I’ve heard 2 and a half to 3 times one years gross should be the most house you buy.
Some of the best advice we got when we were young is to cut at least a third off of what the lender approves you for.
We put $225,000 down on our current home that cost $325,000 17 years ago, the bank approved us for a $600,000 house. We looked at each other and laughed, but I’m sure many people would be buying a $600,000 house.
That would be $1,400 a month on a $60,000 yearly gross salary.
These are the numbers from my post above.
**At 6% your required annual income is $57,819
Maximum monthly payment (PITI) $1,349.10
Purchase price:* $250,000
Down payment:* $50,000
Loan amount:$200,000.00
Loan term: 30 year fixed**
Still sounds like a lot of house on $60k a year.
I don’t think the calculator is taking into account insurance and taxes.
Edit to add.
And, how long would it take to save $50,000 for a down payment on $60,000 a year?
The numbers for a $250,000 house I used above included PITI.
I looked at just the loan, that is $1200 per month.
My taxes are over $350 per month.
I don’t have easy access to insurance, so I can’t see that, but those numbers have to be off.
No idea, but people do it all the time. The 2008 real estate implosion was because people weren’t qualified and had no skin in the game so they didn’t think twice about walking away. We need that to not happen again.
$60k a year is probably around $3,800 a month after taxes. Living with mom and dad for a year, living very frugally and getting a second job it could be done in a couple years or a year for a young engaged couple. Also in my homeownership survey from a week or two ago several people got help with their down payment from relatives. We plan to help our kid with a down payment when he’s ready to buy.
Here’s a home from your Realtor dot com link above. Very affordable on $60k a year.
Here are the numbers.
Home price
$95,000
Monthly payment
$481
Loan
30-Year Fixed loan at 5.179%
Principal & Interest $416
Property tax $25
Home Insurance $40
Total due at close $22,800
Down payment (20%)
$19,000
Estimated closing cost (4%)
$3,800
Well…I jsut got my 2022 appraisal in the mail. The value of my house in one year went up 65,000. I bought my house in 2010 for $185,000. Today they say it’s value is $344,200. The only improvement in 12 years was a new roof. I did tear out a wood deck and replace it with a concrete patio. Yeah…that’s affordable.
It’s crazy. The house before this one was 2500 square feet with 4 bedrooms, 2 of them were master bedrooms. 3.5 baths and 2 of those were master baths. It was assessed for $10,000 more than my current house, which is 3 bedrooms and 2 1950’s size (very small) bathrooms and is 1400 square feet.
I guess that’s the price I pay to live in a desirable area. I just passed a house today that sold for $430,000 and the bulldozers are there to tear it down. It will be replaced with a house that will be valued over a million dollars, which should push the “value” of mine up even more…
So to compare…I’ll use the rates I see today, which are about 4.3%. That’s close to what I paid in 2010. So I paid 185,000 with 37,000 down and that would be a payment of of around $800 (P&I only) So if my kid wanted to buy my house today, she would have to put down $69,000 and her payments would be about 1400 per month. So she would have to save twice what I did and her payments would be almost double what I paid. And this is for a 60 year old, 1400 square foot house.
That sounds about right.
I just cant wrap my head around a $250,000 house at $60,000 a year income.
Median family income in the US is $67,521, meaning half of families are below that. Owning a home is out of reach for many.
Move to Kansas City Missouri, you can buy this house making $21,000 a year or $10 an hour.
Get 2 roommates and charge them $400 each and that’ll pay your PITI and most of your utilities.
Bears know more about KC than even me and parrot. I’d pay bears $95k to live in the house he found for a month. I don’t think he’d take it.
Im not sure how you stop this from occurring? There is actually a big group of Chinese investors buying up property near where I used to live. Again, don’t know how you stop it…but can you image if the Chinese owned all of our residential real estate??? That would be a disaster…