Home buying question: how much annual salary should I aim for in order to purchase a home? Seeing that mortgage is around 5-6k a month, would a 140K salary be enough? (Net monthly pay would be ~7.5K) I currently make 113K (6k/month net) and I want to know what to shoot for in the next few years

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You would be ASTONISHINGLY house poor in that situation.

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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.

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A $5-6k/month mortgage is extremely high. Usually you want to aim for a house that's MAX 3-4x your salary.

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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..

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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.

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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.

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Rent, you don’t need to buy right now anyway

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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

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

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How much are you saving a month towards a house currently? What’s your current rent?

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.

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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.

Damn that’s discouraging. I don’t know if I’ll ever be able to take home over 200K after taxes 😭

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