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Chief
You would be ASTONISHINGLY house poor in that situation.
I would agree with MC1. You’re putting 20% down in your screenshot so I can’t imagine you have much left in savings. Plus you have to pay utilities, repairs and to furnish it (although not AS important).
Honestly I don’t think you’d get a loan. I can remember but I think your home expenses can only be 40% gross monthly pay.
Pro
A $5-6k/month mortgage is extremely high. Usually you want to aim for a house that's MAX 3-4x your salary.
Rising Star
Well looks like I’m going to have to magically get a 250K salary then 🤦🏻♂️
This is just for a cheap-ish tiny condo too
Trust me, you do not sound financially ready for this yet. If your heart is set on it, take couple yrs and really work on getting a higher paying job first..
I pushed up my payment about as high as they would allow it with near perfect credit and 20% down. I’m looking at a monthly payment (mortgage, tax, insurance) of about 38% of my gross pay. If you have good credit and 20% down, I think 38% is probably the high water mark for what most lenders will allow. Of course, many will suggest that you go lower than 38% for reasonableness of payments but sharing as it seems like you’re curious about what’s possible, while hopefully recognizing the risks.
Talk to a mortgage broker that you get along well with whenever you’re ready and they’ll explain the options. Generally 28% is the rule of thumb, so obviously 38% is taking on some risk. I had been averaging 15% raises for multiple years and didn’t see that changing, so I pushed it more than what most would consider advisable. Thankfully, even within a year or two, it’s comfortable again and you’re happy you got as much house as possible so that you’re not tempted to move too soon.
Pro
Rent, you don’t need to buy right now anyway
Rising Star
Yeah but isn’t the interest on mortgages tax deductable at least? Rent isn’t deductable at all
Does that 5-6 mortgage number include property tax, insurance, money for repairs and maintenance, etc? Not that it really matters
Rising Star
If I want to go any cheaper, I’ll probably get mugged at the grocery store and I do not want that.
There are cheaper cities outside of where I live, where it’s around 900K for a pretty big home, but that’s a 2-3 hour drive depending on traffic. I’d rather pay 900K for a small condo and be closer to home
Rising Star
How much are you saving a month towards a house currently? What’s your current rent?
Rising Star
Being so new to the job/career and just getting started with the savings I’d just sit back and stockpile money for at least a few years. See where your raises go. Hopefully rates continue to drop too. Maybe you will change jobs or move cities and end up in a better place for buying. The level of house poor with your current numbers will be dangerous.
Chief
I don’t base it off gross. Base it off your take home pay. Normally a good rule of thumb is the monthly payment shouldn’t be more than 1/3 of your monthly take home pay. That’s subjective though since some people have kids, some have student loans, etc. It should be tailored to you.
Rising Star
Damn that’s discouraging. I don’t know if I’ll ever be able to take home over 200K after taxes 😭