Do you think we can afford this?

posted 3 months ago in Home
Post # 2
Member
104 posts
Blushing bee
  • Wedding: September 2018

It’s going to be hard for any one on here to tell you if you can afford it or not without knowing all your other current expenses and debt.  If you’re debt free and have 0$ expenses, then sure, you could afford it..

Post # 3
Member
175 posts
Blushing bee
  • Wedding: September 2020 - New Hampshire

Use a debt to income ratio to determine if you’ll fall into the acceptable affordability. Lenders will often approve you for more because they do. Never go house poor. 

Post # 6
Member
796 posts
Busy bee
  • Wedding: January 2016

It really depends on the speed and standards to which you want to fill your home, how expensive taxes are where you live, and how much of your salaries you’re currently spending to maintain your lifestyle.

We bought a house for about the same amount you’re looking to spend. Property taxes are crazy expensive where we live – they’re almost the same as the mortgage. It’s a good chunk of change to spend every month, but we are home bodies and love the area. It works for us.

In terms of doing up the house and furnishing it, we did it pretty much all through facebook buy/sell groups. It’s a bit of an eclectic look, but we like it and it works for us. Definitely not shiny and new. If you want to furnish a house all at once with nice stuff, it can really really run you a lot of money. Doing it piecemeal is probably smarter. Get the essentials in and slowly fill out the house with stuff you really like. Set a monthly budget for what you can afford to put into the house. Some things are just expensive. We got a dog and it was several several thousand to fence a decent chunk of the yard and it’s not even a fancy looking fence.

We contribute well to retirement, but aren’t accumulating that much otherwise and probably wont for at least a few more years. A home is certainly an investment.

Post # 8
Member
912 posts
Busy bee
  • Wedding: August 2019 - City, State

I don’t buy that a $400k loan could have a $1500/mo payment. Our house loan was for $135k and we pay $1000/mo. with a (low) 3.1% rate over 30 years.

Post # 10
Member
912 posts
Busy bee
  • Wedding: August 2019 - City, State

kittemae1990 :  Definitely. My Fiance for the loan for our house on his own, while we were dating, and we agreed to only use his income alone to figure out what to pay, in case our relationship ende and he DID have to pay for it all.

With his normal, working-class income, he was approved for $250k!!!! TOGETHER we would not be able to comfortably afford a doubled mortagage payment right now. It was insane! I’d do some Pinterest-ing to see if you can find some objective graphs or blogs that give you more insight into the ticket price vs monthly payment calculations. Some Bees may be able to help you out with an Excel formula, but I don’t want to give you any wrong info. Best of luck!!! 

Post # 11
Member
3085 posts
Sugar bee
  • Wedding: March 2006

With no debt from either of you, I’d say yes. But is that escrowed? Or are your taxes and insurance separate from that number? Property taxes are under $1,000 a year where I live but other places it’s a huge expense. Our last house was $220k and the ESCROWED payment was around $1500, but we didn’t put hardly anything down. 

Also, my husband and I decided after that house that we wouldn’t ever do it again. We would rather live inexpensively, not push the budget, and have more fun instead of worrying about a mortgage and yard work and taxes etc. We’re also a few years from being empty nesters so a bigger house (for us anyway) is just more to clean, more to maintain and more to heat and cool. I’ve never understood the draw of a 5 bedroom house for 2 or 3 people 🤷🏻‍♀️ Cleaning that many square feet is a full time job! 

Post # 12
Member
10695 posts
Sugar Beekeeper
  • Wedding: City, State

throughthelookingglass87 :  

Doing it piecemeal is probably smarter. Get the essentials in and slowly fill out the house with stuff you really like.

This is such good advice.  

Am I the only one who wants to go crazy after closing and buy all new everything?  Last time, I spent $1000 buying light fixtures online from Lamps Plus.

In my defense, the old ones were hideous, I paid cash, and they were freakin awesome.

Post # 13
Member
125 posts
Blushing bee
  • Wedding: November 2015

Do you have a realtor you trust? We were recently trying to determine what we could afford if we wanted to sell and get a bigger home, and our realtor was able to give an extremely detailed spreadsheet assuming 20% down payment, current standard interest rate, and property taxes/insurance etc etc what our expected monthly mortgage would be at each price point from 300-400k. I am surprised by their estimate though bc she had our mortgage around 2300 a month for a 375 home (with 20% down payment) for 30 year loan. We don’t live in an area with high taxes either. Also, your combined income is around 150, but what is your actual take home each month? I would focus more on that number.    I sympathize bc it’s such a stressful decision. If it helps – our combined is a bit higher that yalls, but we do have a one year old (and another on the way) so we will be spending about 1800 a month on daycare. We ultimately decided to wait another year or two when we will likely be making more money. Do you plan to grow your family anytime soon? I think if the entire mortgage (including taxes and insurance) stays around 20% of your actual Take home, I would feel comfortable with that. Good luck!!! 

Post # 15
Member
9811 posts
Buzzing Beekeeper
  • Wedding: September 2013

kittemae1990 :  try some calculators online.  I would expect your payment to be closer to $2k (maybe over depending on the interest rate) if you have $8-$9k taxes on a house at that price. 

You said no other debt so that is good.  Do you both contribute to retirement?  How much?  Do you want any kids?   Do you have a line item budget?  If not, I would make one and plug in the numbers. Then do hypotheticals for future goals like travel, kids, etc.   FWIW I pay $2k a month for daycare for a 5 and 2.5 year old in a lower COL area.  I would try to get a mortgage 20% or less of your income.

I would imagine you could make it work on your salaries but doing a detailed line item budget will let you see the impact elsewhere (leftover money for daycare, kids, travel, fun, etc.).  Of course, I would generally expect salary levels to go up over time so it depends on how soon you want kids, etc.

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