(Closed) Home purchase price vs. your income

posted 3 years ago in Finances
Post # 46
Member
260 posts
Helper bee
  • Wedding: July 2008

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andielle :  At the time of purchase, the ratio of our home price to combined salary was 2.2, now it’s 1.2.  We put 35% down.  Our property taxes are pretty darn high, amounts to half a mortgage payment.

Post # 47
Member
13885 posts
Honey Beekeeper
  • Wedding: November 1999

Our house is twice our after-tax take home pay.  We live in a high cost of living area with expensive housing, but tried to minimize the cost as much as possible.

Post # 48
Member
426 posts
Helper bee

first home: income was 50 and house was 242k (i also put 20% down) had no student loans or car payment. 

 

next home: (will not buy until we have paid my grad school (paying out of pocket) and Darling Husband undergrad loans)  joint income will be  120k and home ~400k 

  

Post # 49
Member
913 posts
Busy bee
  • Wedding: November 2014 - Nazareth Hall

We are building and our home price under 3x our annual income and the mortgage will be for less than 2.5 times our income. We both have student loans but may be able to pay off DH’s with the sale of our current home leaving us with around 15k in debt other than the mortgage.

Post # 50
Member
1090 posts
Bumble bee
  • Wedding: June 2017

I don’t really think it matters how much your house is vs your anual income. I would go by how much you can put down and what your mortgage rate is in relation to your take home pay. Get a 15 year fixed mortgage with it being no more than a fourth of your take home pay.

Post # 51
Member
525 posts
Busy bee
  • Wedding: September 2014

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andielle :  Our home (a first/starter home in a rural area) was 1.5 times our gross income. No other debt. Our mortgage payment with insurance and taxes and everything is only $100 more than what we were paying for rent.

Post # 52
Member
426 posts
Helper bee

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anthonyswife :  oh yea I totally agree.  What matters isn’t even your take home… to me its your take home minus your expenses. Also what you want to be able to save should be factored in. 

Post # 53
Member
9717 posts
Buzzing Beekeeper
  • Wedding: August 2012

This is kind of pointless because everyone lives a different lifestyle and has other financial obligations.

Figure out how much you think you want to spend on a mortgage (INCLUDING taxes and insurance) and put that away every month starting now. If you struggle, then it’s too much.

Post # 54
Member
1090 posts
Bumble bee
  • Wedding: June 2017

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financegal87 :  Agreed! Too many people are house poor these days. No way to live. Fiance and I are sacrificing right now in a TINY apartment. At $350/month we’ll be able to have the rest of his student loans knocked out in a year and our wedding paid for in cash.

We hate debt. And buying a house with a bunch of other debt is not a blessing.

Post # 55
Member
308 posts
Helper bee
  • Wedding: May 2016

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jejangles :  Toronto is insane. I’d definitely rent there too. We just purchased a house and it’s almost 3x our combined salaries which honestly was on the cheaper side of things.

Post # 56
Member
901 posts
Busy bee
  • Wedding: August 2014

Our house cost us ~2.5x our gross annual income 4 years ago, it’s worth about 3.5x now.

To put it in another perspective, we bought a house worth half of what we had mortgage approval for and while it was a deal, we ended up spending more on it right away gutting the kitchen and replacing most of the flooring on the main level.

Post # 57
Member
943 posts
Busy bee
  • Wedding: September 2016

Our house is about double our income – we made about $205k last year when we bought our house for $385k. We live on Long Island. Taxes cost us $12k a year and homeowner’s insurance is about $1500 a year. 

Post # 58
Member
585 posts
Busy bee
  • Wedding: January 2017

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aussierhirhi :  Haha I did the same thing and was wondering if she missed a 0.

I don’t have a mortgage yet but we are starting to think about it. We live in a 2 bedroom apartment in the inner Melbourne suburbs and if we want to stay in this area it’s looking like about $600K for something similar to our rental. Or a modest unit/house way out in the burbs but I don’t want to leave the area I’m in! 🙁 

Post # 59
Member
597 posts
Busy bee

Our house cost about 2x our combined annual income. We went with a 35 year mortgage but since then we’ve been able to increase our payments and get it down to 27 years total. The plan is to keep increasing as our income rises so hopefully it’s more like 20 years to pay it off when all is said and done.

Post # 60
Member
243 posts
Helper bee

I purchased my house when I was single, and it cost 5.5x my annual income (I had a large down payment though, so the mortgage was only 2.5x my salary).  Once Darling Husband moved in we were able to pay off the remaining mortgage.  The house value is about 2.5x our combined incomes.

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