Post # 61
I purchased my two-bedroom, 850sq foot, downtown condo for $192k. I was approved for around $270k and I’m so happy I didn’t max that out. Prior to purchasing my rent was $850 (with two roommates), my monthly outgoings now (mortgage, property tax, utilities, condo fees) are $1,785. It’s been a huge adjustment. If I had maxed out what I was allowed to borrow I would be eating ramen noodles every day and not having a social life (and I would have kept renting rather than do that).
Post # 62
Oh, in my case, the calculator shows the number pretty close to the reality
Post # 63
Haven’t read all the responses, but I do believe it is always best to live below your means. Leads to a lot more financial security, and financial security is very important. And also IMO those calculations always say you can afford more than you really can.
Post # 64
We spent more than planned because we decided that it would be better if we pay more money, but we will immediately live in comfortable conditions. Of course, the registration of insurance and security is the most important thing. I believe that not many people think about it seriously. However, in the future, such people begin to cry about lost things and stolen property. It’s sad, but it’s better than being killed in your own house because you didn’t install some inexpensive ajax, right? I think that everyone should think about it carefully. So, good luck to everyone and be careful!
Post # 65
I know this is an old thread but wondering how people answered the “monthly debts” question on the calculator? We have no debt and our monthly cc minimum is like $30, but of course our monthly expenses are much higher than that and we always pay off our credit card every month. If I put $30 like the calculator appears to advise, it says I can afford a ridiculously $$ house lol, while if I put our actual monthly expenses it is a much smaller amount (and more in line with what I imagined we could afford).
Post # 66
That calculator is really basic IMO. I’d put all your monthly expenses in that spot.
Those calculators told us we could afford literally double what we want to spend. You also have to add in insurance and taxes into the monthly payment.
Post # 67
this likely goes off a debt to income ratio which would leave room for utilities etc. Debts would be any recurring monthly payment that you owe. So a car payment, student loans, if you have any personal loans, etc. Your monthly credit card won’t count, unless you carry a large balance. But what might count is like a credit card from a furniture store if you’re making fixed monthly payments.
We just bought a new house, so I know what we were pre-approved for. I ran the numbers and this calculator wasn’t too far off of what we were approved for (we didn’t spend that much).
ETA: There’s also a huge difference between what you can theoretically afford, and what you actually want to spend. Especially with kids, daycare costs etc, you’re likely going to want to spend less than the top of what you’re approved for. Those calculators don’t often leave enough room for “fun money”. We could have deifnitely afforded to spend more, but had to ask ourselves how that would impact our quality of life in other areas….
Post # 68
That calculator is completely fucked! LOL!
It says we could afford an $886,000 home, and we most certainly can not. It would eat up half of our monthly take-home, even with a 20% DP.
We would be stretching to spend $200k in my opinion. We paused the house hunt for now because with the market explosion last year, the decent homes in the $180-200k range 2 years ago are now going for $260-300k.
I’ve watched a few episodes of marriage or mortgage and I’ve been so astonished that these 22-year-olds are looking for $400k homes, and now I understand. Apparently you only need a combined income of about $65k to afford that (!?!)
Post # 69
I actually thought the calculator was pretty spot on, but I’m in a HCOL city, so there’s no such thing as a 200k house or even studio apartment here (just as an example, one of my friends bought a small one bedroom condo recently and it was over 500k). In my city, we’re all used to have a higher % of our income go to rent or mortgage than is typically recommended and we all manage; we just cut back our other expenses to make it work. I do agree that what you *can* spend and what you *should* spend are often very different.
ETA: When DH and I were first looking to buy (we recently sold our first house and purchased a larger home) I was really discouraged by what financial folks advised to spend. It was much lower than you could get property of any kind for in our city and made me think that maybe we couldn’t afford to be homeowners at all. For us, it was much better to put a budget spreadsheet in and determine what the max mortgage (including PMI if applicable, taxes, insurance, etc) we’d be comfortable with month to month was and set our budget that way.
Post # 70
The calculator was highly inflated when I just popped in our numbers. We bought our house this past fall for $775k; the calculator estimated $1.8M. We spent less than what we had agreed upon as our max budget and were happy about that – living below our means has always been important to us and our mortgage is our only debt. We also have an investment property in a HCOL area that may be skewing some of the numbers, though I didn’t include the monthly profits from that property into our annual income for the calc.
I’d say to just always make sure it’s a number you can comfortably afford, can still save/invest, have room for travel/hobbies/etc, and some wiggle room if one of your household earners looses their job.
Edit: similar situation as a previous poster; the area we live in doesn’t have properties for $100k – $200k; a one bedroom condo is ~$400k.
Post # 71
This market is crazy right now. My husband and I bought a home for about half of what we can realistically afford. It really depends on your area and the market. Our home appreciated 20% in a year, and I’m sure most people’s salaries don’t increase that fast.
Post # 72
It literally was exactly right. Bank was going to loan us up to 180,000 and the calculator says 180,000. We bought our house for $135 and we are making over double payments each and on track to pay it off within 7 years. It sucks to be housepoor so I was adamant to stay under budget and not have a house payment my entire life. I’ve seen several family members lose their houses in their 60s and 70s. I would rather sacrifice now and not have to worry about money so much in our older age.
Post # 74
- Wedding: April 2007 - City, State
Members wanted thread reopened, so reopened.
Post # 75
- Wedding: July 2021 - Mackinac Island, MI
My fiancé and I have agreed from early on in our relationship to only live off of 1 income. Our house was $138,000. If we tried to get as much house as we could, we’re approved up to like $490,000.