Related Posts
Finally, eligible to buy T$LA 😁
Pro
Bowl Leader
More Posts
Pro
Floyd modeling his business-professional wear.
Additional Posts in The Real Estate Bowl
Visual Storyteller
New to Fishbowl?
Download the Fishbowl app to
unlock all discussions on Fishbowl.
unlock all discussions on Fishbowl.
Lol no. For context, in NJ, we bought an $850k home with a 20% downpayment (total loan around $670k) at a 6.5% interest rate and our total monthly payment is $5700 per month. HHI is around $350k.
So, assuming you spent your entire brokerage account and had a similar total loan amount and you’re in Cali with now higher interest rates, your monthly payment will still be in excess of $6000.
Now, consider that almost any house (even move in ready) are going to cost you big time in set up costs, not to mention closing and property lawyers and maybe a mansion tax and whatnot. Also consider that it’s a bad idea to own an home with no emergency fund.
My recommendation is to slash the home price in half if possible and use leftover funds on bringing it up to speed.
As an ex-Californian with family still in Silicon Valley, you haven't even considered you property taxes (crazy high based on purchase pricing vs grandfathered Prop 13 owners), insurance rates plus earthquake insurance if you can get it but is considered a must by some lenders. Maintenance costs on a home if not new or fully renovated are going to catch up on you as labor costs in CA are some of the highest thanks to high workman's comp insurance rates.
I really feel like you've trolled this bowl with your question because all of this could have been found online.
Someone officially answering the question without AI. Nice post.
No
I would expect your combined household income to be $500,000+ for a $1.2-1.3 house.
Ok then OP can afford it
Subject Expert
How much of the $600k are you willing to put down? If all of it, you might be alright.
No
Def not. For reference, I bought my $655k house making $170k with $350k down. So $305k mortgage at 5.5%. Rates are higher now so even if you put down the whole $600k it’s still unrealistic.
I would be in heaven with a 305k mortgage! That’s a joke in today’s market.
I’m at 800k mortgage with 2 kids and 200k salary.
Was easy when rates were 2.1%
We locked in as they rose so we are ok but super tight right now…over the next 2 years as my salary moves a little, mortgage drops a little and hopefully rates level, it will be ok…but just lay off the fast food and the bmw and you can make it work :)
I would work backwards from what you’re willing to spend each month on mortgage payment, taxes, insurance, utilities and then see what that equates to in purchasing power.
Lending guidelines work off gross monthly income which doesn’t account for your lifestyle and expenses that don’t show up in your credit report. So what you can qualify for might be more than what you’re comfortable spending.
Also should account for repairs, furnishings, updates, etc. a lot of new homeowners underestimate the total cost of homeownership.
What is your current monthly expenses (not including rent)?
Is that your household income? Likely no with interest rates these days…
Just curious, why Cali? You could afford much better housing in other states.
Are you going to spend a good chunk of that $600k? If not, then absolutely no. At $160k gross/year, your housing payment should be (at most) like $5-6k a month.
Even that is too high imo when they live in California and only probably taking ~74% of that income divide it by 26 and that’s $9100 a month. $3k for all other bills, food and expenses is crazy imo
Coach
Use redfin or Zillow to calculate the monthly. That’ll tell you. We don’t know how much you’re able to pay every month
It depends on your monthly payments and down payment. You have some cash savings to fall back on if you put 20% down but I think you are putting too much pressure on your income and You are going to struggle financially with other costs that arise with kids , repairs, vacations etc. I have found it’s better to buy less home if you can stand it so you aren’t bitter about it later when your budget is too tight.
Whats your preference on down payment? oaymwnt.
Doing some simple math and assuming your net is about 68% of your gross you shouldn’t be spending more than about $2,500 per month on housing. At least according to the 28% rule. My 28% rule is actually of net not gross like the mortgage companies because let’s be honest. How can you tell someone they can spend a certain % of an amount they don’t actually see 30+% of?
Difficult with this salary.
Assuming you prefer to not be house rich, cash poor surviving on ramen noodles, I would agree that you cannot afford it. Alternatively Can you house hack? Might be a workable alternative.
House hack is where you buy a duplex and rent one side out, or otherwise have a similar
Setup where part of the mortgage is offset by rental income.
Based on your income with no debt, you would need to put estimated 30% down at Purchase price if $1.2 million. if you would like more details, please feel free to reach out at 510-299-7196
Will you explain rationale behind it? It will help everyone here.
Yes. I know plenty of ppl
In the 500-800k mortgage area with 150-200k salary and somewhere 2-3 kids. Might be tight at times but not impossible, especially with a heavier downpayment
But what interest rate did they get it in? Not comparing apples to apples if interest rates aren’t near to same