Hey just a heads up for next time. People who get paid bi-weekly have about 2 maybe 3 months where they get paid 3 times. When you were calculating you were just adding 1800+1800 and getting 3600. That's not accurate. You need to multiply her bi-weekly take home (1800) by 26. Which would be 46,800. Then you would divide 46,800 by 12. So her monthly net would be around $3900.
Same I make about 70-80k a year (overtime) and am currently buying a house for 301k I live in a rural community so its a pretty nice house not amazing but a good home none the less. My monthly payment is supposed to be 2,232 with insurance and taxes. I make anywhere from 4400-5,400 take home a month. According to his charts Im beyond really tight by about $500 but I still have 2,200- 3,200 for bills, food, etc. (currently $0 debt and own my car) I feel like that is more than enough that I should be able to get by fine I just won't be able to go out and buy a 40k+ car. I've always had a problem with DTI% numbers because 30% of 1,000 would leave you with a take home of $667 and 30% of 10,000 would leave you with a take home of $6,667. The leftover money is extremely different in these circumstances. Last time I checked the price at the grocery store and amazon is the same for all customers no matter what your take home is.
As someone who lives in Thornton, CO. Javier was spot on with this video. Market is horrible for buyers here. For example, the townhome right next to me is being sold at 410. She bought at 285 a year and a half ago.
This is insane. 300k only gets you an average house in Denver, yet she still can't afford that despite having great credit, good income, and a good savings. So disheartening.
Does 300k get you an above average house in any suburb? I live in Ohio and even in small suburbs it’s like 200-250k for a 3 bed 1500-1800 sqft. It’s wild. 10 years ago the average 28 year old could buy one of these houses for half of that money. Do you think the average 28 year old is making double the money now? Nope. It’s so unfortunate.
I live in a suburb in Alabama, my fiancé and I are buying a 2400 new built house for 340,000. We are 23 making 170,000. Just depends what career choices and spending habits people make. But have to agree that 440,000 house looked awful lol
@@chazzz98 I make 150-185k single income 3 person family with a new baby. Having trouble finding a house in our small semi rural suburb that is able to grow with our family without paying over 300k. Anything decent gets bid up fast and is gone quick. Which is stretching out budget because of the amount of student debt I have. It’s very aggravating to be as successful as I’ve been in my career but unable to safely purchase a decent family home in a quaint suburb. New construction for a 2600 house is 400+ easily here. Just saw a posting for a 1600 sqft built in 04 house in a newer development. Finished basement. Siding on the front. Good street. 3 bed. Listed at 355k. Very frustrating.
It’s pretty insane that you need a 140k household income just to afford a 400k dilapidated house here in Denver. I don’t know how anyone can own a house.
I'm in California and I'm seeing the trends become the same way in Denver, Dallas, other major cities. It's frustrating because people are being pushed out if the cities they want to be in.
@@ashleykbarks it’s getting harder everywhere, you have to rent and get by with less. That’s the scarier part. The American standard is rapidly declining and our country is regressing rather than improving.
True, despite having no prior investing knowledge, I got fully invested just before the pandemic and pulled $150k in profits that same year. In reality, all I was doing was following professional guidance, and as of today, I'm only 10% shy of a million dollar portfolio.
@@mette-lo real estate prices exploded, interest rates exploded, but my wage the same, i'm screwed! who is your advisor please, if you dont mind me asking? i'm 56 and need to catch up with investing
She goes by ‘’Katherine Nance Dietz’’ I suggest you look her up. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
excellent share, just copied and pasted Katherine Nance Dietz on the web, spotted her consulting page ranked top and was able to schedule a call session. Ive seen commentaries about advisors but not one looks this phenomenal
When you are questioning her net income, don’t forget she probably has a 401K, insurance, and other things coming out of that amount. If she told you her net is 3,700 its probably accurate based on her other expenses. Great videos by the way very helpful so is your worksheet
This. I make about $73k and my take-home pay is about $3400 after taxes, retirement, benefits, etc which equates to a total of 37% deduction from my pay.
Even still, he put her in a better scenario and she still falls short! As he said, she needs to look at a 300k home at best and she still will be on rice and beans paying that mortgage!
In my opinion the crazy housing affordability problem in this country is our local, state and fed government is not doing their job. There are all kinds of reasons why only luxury homes are being built, and many of those reasons could be addressed by laws that… - somehow provide equivalent or better income tax deductions to renters as are received already by homeowners to enable renters to save for a home, - greatly decrease power of NIMBY lawsuits, - revise building codes by simplifying so that new homes are not required to address every possible risk in the world, - require US citizens to get first chance (one month?) to buy a home new or existing before opening up to foreign buyers, - require home insurance companies to offer reasonable rates and not require homes to include protection features that greatly increase cost to build new homes, - require developers to include much more significant # of affordable houses with each tract of luxury McMansions, - determine and resolve why in SoCalif a developer recently revealed that one affordable housing unit cost $800k, - greatly limit or eliminate wall st investment companies from buying homes as ‘investments’ so that they can rent them for corporate profits, etc. Bottom line is our govt is not doing their job. I have very little hope that our govt can rise to challenge the current housing debacle.
I liked her idea about getting a room mate. If rents are going up too , may that not be a good option ? Like Air B and B or place an add at the local hospital lunch room post it board. Rents are so high , 2000 for a shabby appt some places, why not rent a room in a nice house for less ? Of course she would need to screen screen screen. But it seems to like that could a good bit of income
Hey Javier, these videos are super helpful! Also, as a UX designer I'd say you could reduce the number of access requests you get if you move that big disclaimer below "Thanks for checking out..." into an area where people will be reading to learn how to use it. At the top, separate from the meat of the page, it's easy to get lost. Just a thought. I hate unnecessary emails too. :)
Similarly, I'm shopping for up to $450k on around $85k, with no other debt or even a balance on a credit card, with a reliable room mate and a career that very typically increases in salary steadily from here. It's not easy, but it's amazing how little $300k buys in Minneapolis, where I am, despite not being well-known as an expensive city.
@@ashleykbarks Exactly. I've always done more with less, and by "less" I mean I am used to making about half what I do now in my comment, and I made it work. I started a new and better career just last year. It's not what you make, it's what you save.
@@ashleykbarks idk. I feel like that’s eating up too much of your monthly income. I don’t mean you personally. My fiancé and I currently make 120 together. I finish my RN in May and have several jobs lined up and my income is going to increase substantially. We’ll be around 160k and we think 400k might be risky. But we also live in CT where property taxes on a 400k house are 8k minimum.
Idiots who can't do basic math. I don't know why even after the last crash people don't understand housing should not exceed 3x your income. Sure there's going to be a few people who randomly say they just inherited 400k from thier mom or dad or won the lottery but that is not the norm and counting your retirement savings against you home is like doubling down on a bad debt.
@@FastAligator1234 historical % is 1/3 because 1/3 went to house, 1/3 went to food/clothing/transpo, 1/3 went to saving which today would mean things like a 401k/retirement and or "health" bc we live almost a good 20 years longer than previous generations around turn of the century.
I bought a house exactly 2 years ago in Thornton. the prices then were 100k less. It sucks so much how much the market has exploded. This part of the American dream is so close to dead.
Those homes that are listed for that price will end up selling for at least $50k more in the Denver Metro area. We just closed on a townhome that listed for $365k and our final purchase price was $425k. Market here is literally insane right now.
You are absolutely right and the same thing is happening in Texas. Basically a starter home is at about 300k right now. By the time it sells, it’s $350 to $375!
@@serenahenry5834 2008 crises was a different scenario. Right now, prices will dip slightly due to recession and then go right back up. It is what it is!
5:38 I think your monthly calculation is still off. She said she got ~$1800 biweekly and we know there are x26 “biweekly” payments in a given year. So actual “monthly take home” is $1800*26/12. She won’t see it that way because she gets payed biweekly but technically that is what it is if we were to split her yearly income into nice 12 sections.
It’s so weird… I just came to the same conclusion last night! I’m about in the same situation she’s in. So, I’m just gonna scale back and look at something in the 280k-360k range. Just will have to not be in my desired area 😢
Smart way to deliver the bad news that buyers need to hear. Better to avoid getting in over your head and regretting it for the rest of your life. Start small! Consider a townhouse if you’re single.
Literally no diference. Any money "saved" on a lower price is consumed by a vicious HOA that will forever hound you over petty shit and has legal authority to fucking forclose your home if you don't comply.
If 75K is her annual income, then you would simply divide that number by 12 to get the monthly income that underwriting will use. If the borrower only gave you her gross income every paycheck and said they get paid bi-weekly then you would times that number by 26 to get the annual income but in this case she already gave you the annual income. So $1,800 x 26 paychecks = $46,800 for her net income.
My friend and I bought together! We are at the top of our budget and we need to move again but can't afford the area we need to move to. Welcome to expensive Utah. House prices are insane is Salt Lake County.
Almost my exact scenario, only I was lucky enough to find a FSBO house for 350k from a friend of the family that would of easily sold for 380K. I had been getting outbid by 20-30k for months in WA state. MATAME
My situation (on one income) -gross 8.5k , net 5k -790 credit -1 credit card ($60) -300-350k house -30k savings I can’t get a loan because my taxes were whack my first two years of business 😑😑😑 definitely crushed my housing dreams 😂
It also could be because they are self employed. Most lenders will want 2 years of tax returns for self employed and with all the write offs us business owners use it makes our income look bad on paper. There are other options like bank statement loans for self employed borrowers.
@@Isaac.Sinsun you’s right. I made peanuts 🥜 My first two years of business. Unfortunately, lenders want two years of taxes. So, I don’t qualify for 300k loan 😑 which is whack as hell. I’ve been making better money for 6 months and my gross/net continues to increase every month.
It would be helpful if you used her actual earnings, she said $3,600 is what she averages as her take home so use that. It's better to over budget and end up with a surplus at the end of the month than a deficit. I think it would be helpful if you would show a cheaper home in the scenario of affordable housing. It would also be helpful if people shared the full picture of their living expenses for this exercise. People who don't budget tend to forget about things they spend their money on, so it's not just what the house payment will be, but also how that payment effects your monthly expenses. What's her current rent payment? It's probably not 72% of her net income. I'd say her mortgage shouldn't exceed $2,000 a month so she can still live comfortably on $1,600 towards her living expenses. The bigger the house the more expensive it is to heat and cool. With a smaller mortgage payment on a less asthetically pleasing home she can make upgrades to cut down on utility costs and add value to the house for possible future resale. Great video, thanks!
Technically, that $2600 included the 1) mortgage payment (most of it goes towards the principal on the loan tho), 2) property taxes and 3) the mortgage insurance. It's f'n insane.
That's why I decided to move up north to Greeley. It's cheaper and you get more bang for your money . last year my net was 3400 my house was listed at 300k and brought it for 338k. My mortgage is 1600 ,my rent was 1300 for a 1 bed apt in Thornton with bad ac . I just realized if you want to live in the city you have to work yourself to death to be able to afford something crappy. That's not living.
Not to mention that more than half of homes here in Denver are going over asking. Most offers have appraisal gaps here on those offers, which is additional money needed up front beyond the down payment. It's rough.
I purchased my 397k home last month in Casa Grande and so far so good. Fortunately i can use one entire check to pay the mortgage of 2400 and another check for home stuff and food and some fun
So your home is 50 percent of your take home? That’s typically not the greatest situation, but it can work. Do you have kids yet? Will you ever want a new car? One or the other or both would put you in a very tight situation unless you plan to make much more in the future.
@@Aggie4life77 I sure did plan to make much more. If interested read on to see how I am pulling this off. After the transfer from Cali to AZ I got a pay raise and I now make around 4800 biweekly. Of that amount i take home around 3300 biweekly after taxes and all other deductions such as health insurance. Do I have kids? Yes a 3 and a 9 year old and honestly my kids have never been a financial burden to my wife and I.... Not yet at least. When they hit the teenage years that may change lol. And yes we are planning on buying a new electric car that will basically cost as little to nothing additional per month. How so? Our house has solar panels (46 panels) that are producing a lot more electricity than what we use. Even in these hot 100+ temperatures we use around 800 kwh per month and our solar system produces around 3000 to 3200 kwh per month. Ever since we moved to AZ in March we haven't paid the electric company a penny and they have been paying us every month. Right now i spend around 700 to 800 per month on gas for my car. So basically if I buy a electric car the car payment for it will probably be around 700 to 800. Instead of paying the gas price for my current car I will put that money towards a auto loan payment hence why I mentioned earlier that it may be possible for me to buy a car that will cost me little to nothin additional monthly. Since my solar system is over producing by a long shot I will basically be able to charge my electric vehicle for free thus resulting in no car gas cost and no increased electric bills thanks to solar. Family and I are so happy we made the move to AZ from Cali. Everything has been going good and things have been falling into place. Our home even got appraised for nearly 20k more than what we paid for it and it has also gone up a little since March. Buying this home was intimidating at first because of the world of unknown that lies ahead of us but we just stay positive and tell ourselves that we will take on whatever challenges this world throws at us. Anyways good luck if you are planning on buying a home yourself or have done so already. And if you haven't got solar do it. It's great!
as of now i claim zero for tax withholdings. how much if any does this change my take home once i buy a house or start to claim 1 or more? i dont think i have seen any videos about this on youtube. thanks
I'm buying a home for 410k in FL. So we are putting 83k down so our payments will be 2638 a month. After paying this for 30 years plus the 83k down that puts our overall at 1 million. Is that normal/ right? WTF
What are the options? Keep paying $1700/month for an apartment or a maybe $800 for a room in someone elses house? Screwed either way with rent increases.
My combined annual income is higher than hers, and I couldn’t imagine how much I’d be struggling if my mortgage payment was that high. I currently pay $1,500 and still struggle sometimes with bills, especially with inflation. She should probably look into property further East where she may be able to find a house just below 400k and endure a longer commute.
Maybe for baby boomers. Who has that much money to throw down? Houses cost quadruple what they did when that was the standard and the average income certainly hasn’t quadrupled with it
I put down 5% with good credit. If you can get conventional, you can choose what you want to put down, 3% is minimum, but you have to remember PMI until you hit 20%
If there is no set payment for student loans then the lender will either use .5% or 1% of the loan balance. The percentage is determined based on whether your loan officer goes with Fannie Mae or Freddie Mac.
I mean it depends on how much you make once you get close to 6 figures a year the % falls out the window because 50% off $2,000 is only $1,000 while 50% of $8,000 is $4,000. Sure the person with only 1k left over every month will have some trouble but the person with 4k a month is more than good. Unless clothing, grocery stores, and amazon start charging prices based off your income.
I was in the same boat as her. I'm single making 85k a year with an 815 credit score. Just recently closed on a house 2 weeks ago. Got it for 430k. Paid 30k over the asking price. Even though my morgage payment is around 42% of my take home pay, i can still live my life and have fun because I dont have any other debt. The housing market will not crash anytime soon.
Curious how you are holding up with your house payments. No debt a year ago when you bought your home but eventually you may have a new car or unexpected bills. I ask because I’m wanted to buy a house but am scared to make that jump. I can easily afford a 300k house too but worry about the unexpected down the road.
I'm holding up pretty well on my house payment. It's been a year now and I'm bless that I made that jump because I got it at 3.275% interest rate. You also get tax benefits when you have your own home. I got around 2500 just on my property tax last year. No unexpecting bill as of right now as long as you know how to manage your bills. I thought about getting a roommate but I love my space. You need to have an emergency fund. I have around 8k just in case something happens. And Im gonna be honest with you, If I were to get a house today in todays rate which is in the high 6's with good credit, I wouldn't be able to afford it. I mean I can, but I'll be living paycheck to paycheck. So you gotta have a huge down payment. Right now it's ridiculous to buy a house, unless your ready 100 percent. The interest rate is just too high. Unless you can get a house under 300k.
@@G_Money_confused what you mean by tax benefits... you PAY property taxes for the right to simply own the home. The only "tax benefit" is your interest payments are tax deductible. Tax deductable does not mean free money. Also you should prob get a roommate for a few months at least and put that money into your emergency fund. As a home owner you need a lot more than 8k for emergencies. For example, what are you going to do when your roof starts leaking and you need a new one.
Question: Should I wave the appraisal in order to complete with the California market? Back story: Ready to buy, i think. I keep getting out bidded by cash offers and more money and i see some people getting the homes by nullifyin the appraisal of the home. WTH!... Shoud i do the same? what are the risks? Why is it good or bad? please help...
Well it would depend on what type of loan you're getting any goverment (FHA, USDA) loan is going to force you to get an appraisal. I'm sure other conventional loans are the same unless you're bringing a huge down payment with 800+ credit. Let's say your lender is okay with waiving it then the main factor as to it being "good or bad" is just simply that you over paid for it so if there ever comes a time you want to sell it and move out you're not going to get what you paid for it. Possibly making moving out not a possibility until the house is fully paid off. The other main concern would be insurance, let's say your house is 100k and you paid 200k. The insurance will only cover what the house is worth so if its 100k and a fire happens and it all burns to the ground you only get 100k from the insurance not the 200k you paid. If you're 10 years into owning a home and it catches fire your only option at that point would be to use 100k to build a home again on that property unless you want to continue making your mortgage payment while also paying for somewhere else to live because 100k wouldn't even pay your loan off fully if the fire happened at the 10 year mark.
420k for a home in the Denver metro area???? That's called a condo. I've actually got a hold on a new home about 34 miles north of Denver. The new homes 558900.00 but luckily I've got a home I bought in 2008 for 170k. It's estimated to be worth 485k but I've put a lot of work into it so I'll probably get 500k+ but even with all of the equity I've got I can't afford to move within the metro area. This is why I'll move away from the city, and if I sell my house at market value I'll be able to put 44% down on it and keep my mortgage manageable. If I stayed in the metro area I'd hate to over pay for anything and get into bidding wars so basically I'll be happy to move outside of the city in a lower demand area and keep my mortgage manageable.
Why did he divide by 13? there are 12 months in a year and that is what you divide the annual income by. Maybe I missed the part where he explained why.
Great video, but disagree on not mentioning additional savings. A good lender will have a conversation and understand the clients needs and goal. Having additional assets even if not being used the lender could that as reserves. Specially when buying conventional or when buying multi families. Also with fha you can buy a house with a little as 500 per hud, and most lender will allow 580. Keep up the good work. Keep the mind the cost of waiting
When you say she can qualify but not afford, are you saying that she will get approved for that amount but you don't advise it? Or will the bank deny her? Just asking for clarity. Thanks!
She would be approved for that much, but it wouldn’t be wise to spend that much. Lenders only look at monthly debts compared to gross income. You have to do your own due diligence to determine whether that amount actually makes sense based on your net income and lifestyle.
I live in Denver and bought a 400k home as a single woman in 2018 but it would be impossible for me to afford buying now! Lots of single people in Denver but homes and rent out rooms in their home so they can afford the mortgage. I only have one renter but it's another $1k per month that I can put toward my mortgage.
What's crazy to me is it seems like people are totally OK with being house poor. Paying $2500 a month, every single month, to simply exist in a box is outrageous. Do these people not realize that they are tied to this payment for ~30 years come hell or high water? Maybe it's just my lack of being romantic with drywall and some lumber but it seems crazy to me for these young people (myself included) to be signing their life away on hundreds of thousands of dollars that relys on everything going right in order to be able to afford the mortgage.
Yeah thats unfortunately the world we now live in. We should be a little greatful though atleast we can still buy houses. Im sure in 30-40 years buying a house wont even be an option unless you're stupid rich and everyone will just have to pay for rent and live in apartments or old homes that were turned into duplexes and triplexes.
You have a very twisted view lol. Unless you don’t ever plan on earning more, your mortgage payment becomes more and more manageable as your income grows. If you don’t ever by then homes will continue to increase in price and you’ll be in the same situation complaining that you can’t afford a house 10 years later. I bought a house 7 years ago. At the time the mortgage was more than double what I was paying for rent at an apartment. Now apartments rent for my that my mortgage.
I’m at 12g a month 799 fico 35g down. My loan officer said qualify 450g but I’m afraid because I’m not sure if I can afford it a 370g home my payment is 2700 at 5.35% I have no debt
At 12k a month you could afford much more than that if you wanted to, especially with no other debt. I would just pay the home off in 4 years at that rate. Save yourself a year of working in interest only.
Just keep waiting the market will take 2 - 4 years to unwind. Already seeing a real slow down at the over 1M market in Colorado can rebuy a better home in our neighborhood for 250k less than what we sold our home in late 2021 / early 2022. This will trickle down to the lower markets as less an less buyers don't show up.
Hi Javier, I'm a loan officer. You calculated the monthly income incorrectly. If you have the annual salary, just divide that number by 12. This is because we have 12 month in that year and we want to get their monthly gross amount. You do not use the # 13 in this scenario. Now if you dont have their annual salary and they give you a different unit, like their gross biweekly pay amount we use a different formula. (That formula would be multiplying the gross bi-weekly income amount by 26, because there are 26 bi-weekly pay periods in one year. Then we divide that number by 12 to get the gross monthly income amount). In the example for this video, 75k per the year would give me a monthly gross income of 6250. I got that by taking $75,000 and dividing by 12 months. Your original calculation was correct. The second calculation was wrong. Hope this helps!
@@TH-jd8ft he is incorrect. Thus, the reason for my comment. I'm a loan officer who works with these formulas daily. Thanks for you input but I noticed his reasoning already.
No, she cannot afford it, could have said that before watching the video (after checking her income). I make 95K a year and mortgage and taxes are 1630 a month (mortgaged 255K), that's about what I would be comfortable with!! As DR says, if you home becomes a burden and a financial nightmare, its no longer a blessing or a dream, better to be without a house then in a house you cannot afford!! Hopefully at some point she can get her dream house!! 🏡
How do I get a $500k whith 3,000 a month salary but I would live with my wifes parent so they would pay half of the mortgage. How can I go about acquiring a house for this amount
Yall forgetting she knows she may need a roommate. If she gets one and can 1/2 or even get a 1/3 of her rent taken care of by them then she can def get herself situated.
I was going to say, it’s possible to do this, assuming you make about $120k/yr. The reason I say that is that I make about $40k and bought a $100k house. Assuming the person in question is good with budgeting, it’s possible on just 1 income, assuming the mortgage provider okays it, because the amount possible to save over necessities grows the larger the income gets,
What if you don't have any money saved , but are gifted half the down payment 🤔 an save the other half of the down payment by closing? 350k house closing is around 21k
Depends theres things like sellers assistance where they pay most of it. I just bought a 300k house and only paid 7k to move in while using sellers assistance. I live in PA and had an FHA loan.
In 1960, 65.2% homeownership in the USA. In 2021, 65.5% homeownership in the USA. Homeownership percentage in the USA has remained stable for the last 61 or so years. The percentage of homeownership hasn't changed much in 61 yrs but I think the percentage of American's expectation of obtaining homeownership has changed. Is homeownership less affordable/obtainable than it was in 1960? The statistics indicate there has been little change in homeownership. I think the expectation of homeownership has changed.
I’m getting denied because of paper trail my dad was gona give me the money as a “gift” he is actually illegal and currently waiting for the last step in his immigration status.. Anyway he does not have a bank account so I’m being denied just two days before closing even though #1 he told me that on the “gift “ letter no account number was needed an second he turned papers over to underwriting just 2 days before closing I had no chance to explain or asked if I new anybody with money in there account and was able to show how mucH she has and what she is taking out.. please can I be saved? HELP!! Money for closing is only…$ 3,700
That's insane. She brings home $3,600 and a $2,600 mortgage leaves her with $1,000 for her minimum credit card payment, utilities, food, transportation costs, toiletries, household cleaning, savings towards home maintenance, entertainment, clothing, and anything else she currently needs as a necessity. Even tightening the budget and eliminating the entertainment and clothing budget still leaves her with all the other costs. She has to eat, use the toilet, and take a shower. It gets cold in Colorado so she can't bike to work in the winter. She needs to look at cheaper, more affordable houses.
@@1Letter23Numbers. I mean yes if she really wanted to sure she COULD do it but I just bought a house for 301k (1k taxes, 1.3k insurance) and my monthly is $2232 so on a 440k house with higher taxes and insurance then I pay, I don't even think the 2,600 number is real. It would be Ill advised to only leave yourself with $1000 a month especially when you havent factored bills and groceries into that. One uncontrolabale emergency happens and you're fucked.
Some times you have to live with a tight budget not everyone has huge amount of money in savings accounts. If your bank approves it go for it and manage your cashflow as it goes.
Consider the house hacking strategy. Maybe you and another person can buy a duplex/triplex together, live in it, and eventually rent it out to others after a year or more.
So for most northern states you need to make over $85k when the average income for a millennial in the U.S is 35k. This is dangerous, as it forces people to live with or even marry people for financial support like back in the old days when families would marry off their daughters. But at the same time there are people paying over 2k for apartments! So for most the choice is either be poor in an apartment or be poor in a home that you can use in the future to rent/sell. Like don't tell people that they are better flushing that same amount for an apartment they'll never own.
Watching this video today is disheartening. I am not sure how on Earth the taxes are that low, but even then a $2600 monthly estimated payment on a $400k+ home would be a dream in today's market. Also, how are closing costs only 2%? Where I live in PA, I am seeing 4% or slightly above for average closing costs.
Main was crushed. I make $3,000 a month.and $3,000 in cash. (Been taking care of my nephews for 5yrs my sister has a bussniss. $1,500) and I have a client for 3 yrs her family gives $1,500 cash ) so none of this counts. NO debt. 771 credit score. I have $100,000 saved ( took me 3 yrs) and bcuz I only makke $3,000 I qualified for less then $300,000. At this point I would have to get a payroll job and be there for 2 yrs.
Great info as always. Great video. Just a note - to calculate biweekly income you multiple by 2.167 to get per month income . To get the yearly net income using you method of 13 . You take the biweekly income multiple by 2 then multiple by 13 to get the yearly- the easiest is to multiple by 26 to get yearly, the better method is multiple by 2.167 to get the monthly, to get yearly then multiple by 12. Cheers
Without even watching, a $2600/mo mortgage with a $3600/mo gross income is too damned tight.
Yup, I think 40% of take-home pay should be close to an upper limit
Yep! One car payment and it’s rice and beans!
@@Aggie4life77 and top Ramen to mix it up
Hey just a heads up for next time. People who get paid bi-weekly have about 2 maybe 3 months where they get paid 3 times. When you were calculating you were just adding 1800+1800 and getting 3600. That's not accurate. You need to multiply her
bi-weekly take home (1800) by 26. Which would be 46,800. Then you would divide 46,800 by 12. So her monthly net would be around $3900.
This video is perfect. I make the same amount of money but an hoping to buy a 350k home. This is super helpful! Thank you!
Same state?
Same I make about 70-80k a year (overtime) and am currently buying a house for 301k I live in a rural community so its a pretty nice house not amazing but a good home none the less. My monthly payment is supposed to be 2,232 with insurance and taxes. I make anywhere from 4400-5,400 take home a month. According to his charts Im beyond really tight by about $500 but I still have 2,200- 3,200 for bills, food, etc. (currently $0 debt and own my car) I feel like that is more than enough that I should be able to get by fine I just won't be able to go out and buy a 40k+ car. I've always had a problem with DTI% numbers because 30% of 1,000 would leave you with a take home of $667 and 30% of 10,000 would leave you with a take home of $6,667. The leftover money is extremely different in these circumstances. Last time I checked the price at the grocery store and amazon is the same for all customers no matter what your take home is.
As someone who lives in Thornton, CO. Javier was spot on with this video. Market is horrible for buyers here. For example, the townhome right next to me is being sold at 410. She bought at 285 a year and a half ago.
This is insane. 300k only gets you an average house in Denver, yet she still can't afford that despite having great credit, good income, and a good savings. So disheartening.
Does 300k get you an above average house in any suburb? I live in Ohio and even in small suburbs it’s like 200-250k for a 3 bed 1500-1800 sqft. It’s wild. 10 years ago the average 28 year old could buy one of these houses for half of that money. Do you think the average 28 year old is making double the money now? Nope. It’s so unfortunate.
And it seems to get worse every day
I live in a suburb in Alabama, my fiancé and I are buying a 2400 new built house for 340,000. We are 23 making 170,000. Just depends what career choices and spending habits people make. But have to agree that 440,000 house looked awful lol
@@chazzz98 wow good work. What industry you guys in? I’m curious coz it doesn’t sounds like in the tech industry if located in Alabama
@@chazzz98 I make 150-185k single income 3 person family with a new baby. Having trouble finding a house in our small semi rural suburb that is able to grow with our family without paying over 300k. Anything decent gets bid up fast and is gone quick. Which is stretching out budget because of the amount of student debt I have. It’s very aggravating to be as successful as I’ve been in my career but unable to safely purchase a decent family home in a quaint suburb. New construction for a 2600 house is 400+ easily here. Just saw a posting for a 1600 sqft built in 04 house in a newer development. Finished basement. Siding on the front. Good street. 3 bed. Listed at 355k. Very frustrating.
It’s pretty insane that you need a 140k household income just to afford a 400k dilapidated house here in Denver. I don’t know how anyone can own a house.
I'm in California and I'm seeing the trends become the same way in Denver, Dallas, other major cities. It's frustrating because people are being pushed out if the cities they want to be in.
@@ashleykbarks it’s getting harder everywhere, you have to rent and get by with less. That’s the scarier part. The American standard is rapidly declining and our country is regressing rather than improving.
Crazy. Back in 2010 I bought a house with a $30K salary.
@@cecemoon1208 I literally can’t imagine
My parents sold their house in Denver 30 years ago for $72,000. It's estimated at 10 times that now.
Just made a home sale sitting on $545K equity, not sure where to go from here. Is it a good time to buy into stocks or do I stay 100% cash?
I wouldn't stay 100% cash, banks are ruining us in real time with inflation. I'd suggest you employ the service of a seasoned advisor
True, despite having no prior investing knowledge, I got fully invested just before the pandemic and pulled $150k in profits that same year. In reality, all I was doing was following professional guidance, and as of today, I'm only 10% shy of a million dollar portfolio.
@@mette-lo real estate prices exploded, interest rates exploded, but my wage the same, i'm screwed! who is your advisor please, if you dont mind me asking? i'm 56 and need to catch up with investing
She goes by ‘’Katherine Nance Dietz’’ I suggest you look her up. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
excellent share, just copied and pasted Katherine Nance Dietz on the web, spotted her consulting page ranked top and was able to schedule a call session. Ive seen commentaries about advisors but not one looks this phenomenal
When you are questioning her net income, don’t forget she probably has a 401K, insurance, and other things coming out of that amount. If she told you her net is 3,700 its probably accurate based on her other expenses. Great videos by the way very helpful so is your worksheet
He’s just going base on what he has
This. I make about $73k and my take-home pay is about $3400 after taxes, retirement, benefits, etc which equates to a total of 37% deduction from my pay.
Even still, he put her in a better scenario and she still falls short! As he said, she needs to look at a 300k home at best and she still will be on rice and beans paying that mortgage!
She needs a roommate lol
am i the only one shocked by the 1200sqft for 400kplus thts is coke money wt the total Fck!!!!
In my opinion the crazy housing affordability problem in this country is our local, state and fed government is not doing their job. There are all kinds of reasons why only luxury homes are being built, and many of those reasons could be addressed by laws that…
- somehow provide equivalent or better income tax deductions to renters as are received already by homeowners to enable renters to save for a home,
- greatly decrease power of NIMBY lawsuits,
- revise building codes by simplifying so that new homes are not required to address every possible risk in the world,
- require US citizens to get first chance (one month?) to buy a home new or existing before opening up to foreign buyers,
- require home insurance companies to offer reasonable rates and not require homes to include protection features that greatly increase cost to build new homes,
- require developers to include much more significant # of affordable houses with each tract of luxury McMansions,
- determine and resolve why in SoCalif a developer recently revealed that one affordable housing unit cost $800k,
- greatly limit or eliminate wall st investment companies from buying homes as ‘investments’ so that they can rent them for corporate profits,
etc.
Bottom line is our govt is not doing their job. I have very little hope that our govt can rise to challenge the current housing debacle.
On a side note, love the Nintendo bg music in your videos
I liked her idea about getting a room mate. If rents are going up too , may that not be a good option ? Like Air B and B or place an add at the local hospital lunch room post it board. Rents are so high , 2000 for a shabby appt some places, why not rent a room in a nice house for less ? Of course she would need to screen screen screen. But it seems to like that could a good bit of income
Hey Javier, these videos are super helpful! Also, as a UX designer I'd say you could reduce the number of access requests you get if you move that big disclaimer below "Thanks for checking out..." into an area where people will be reading to learn how to use it. At the top, separate from the meat of the page, it's easy to get lost. Just a thought. I hate unnecessary emails too. :)
Who would buy a 420k house on a single income of 70ish. Insane.
Similarly, I'm shopping for up to $450k on around $85k, with no other debt or even a balance on a credit card, with a reliable room mate and a career that very typically increases in salary steadily from here. It's not easy, but it's amazing how little $300k buys in Minneapolis, where I am, despite not being well-known as an expensive city.
@@ashleykbarks Exactly. I've always done more with less, and by "less" I mean I am used to making about half what I do now in my comment, and I made it work. I started a new and better career just last year. It's not what you make, it's what you save.
@@ashleykbarks idk. I feel like that’s eating up too much of your monthly income. I don’t mean you personally. My fiancé and I currently make 120 together. I finish my RN in May and have several jobs lined up and my income is going to increase substantially. We’ll be around 160k and we think 400k might be risky. But we also live in CT where property taxes on a 400k house are 8k minimum.
Idiots who can't do basic math. I don't know why even after the last crash people don't understand housing should not exceed 3x your income. Sure there's going to be a few people who randomly say they just inherited 400k from thier mom or dad or won the lottery but that is not the norm and counting your retirement savings against you home is like doubling down on a bad debt.
@@FastAligator1234 historical % is 1/3 because 1/3 went to house, 1/3 went to food/clothing/transpo, 1/3 went to saving which today would mean things like a 401k/retirement and or "health" bc we live almost a good 20 years longer than previous generations around turn of the century.
That's crazy, I'm look9ng to buy a 280k house in Michigan. Taxes is 4k a year and insurance is 1700. I don't even live near water
I bought a house exactly 2 years ago in Thornton. the prices then were 100k less. It sucks so much how much the market has exploded. This part of the American dream is so close to dead.
Those homes that are listed for that price will end up selling for at least $50k more in the Denver Metro area. We just closed on a townhome that listed for $365k and our final purchase price was $425k. Market here is literally insane right now.
Thats exactly how it is in california
@@sentry2236 yeah it's insane. But it is what it is, and doesn't really seem to be slowing down any time soon
It’s happening everywhere, I’m afraid we are eventually headed toward another 2008-09 crisis….
You are absolutely right and the same thing is happening in Texas. Basically a starter home is at about 300k right now. By the time it sells, it’s $350 to $375!
@@serenahenry5834 2008 crises was a different scenario. Right now, prices will dip slightly due to recession and then go right back up. It is what it is!
5:38
I think your monthly calculation is still off. She said she got ~$1800 biweekly and we know there are x26 “biweekly” payments in a given year. So actual “monthly take home” is $1800*26/12.
She won’t see it that way because she gets payed biweekly but technically that is what it is if we were to split her yearly income into nice 12 sections.
It’s so weird… I just came to the same conclusion last night! I’m about in the same situation she’s in. So, I’m just gonna scale back and look at something in the 280k-360k range. Just will have to not be in my desired area 😢
Goodness this is almost the same situation as me - thank you for this!
Smart way to deliver the bad news that buyers need to hear. Better to avoid getting in over your head and regretting it for the rest of your life. Start small! Consider a townhouse if you’re single.
You are so correct!!!!
Townhomes/ condos are about the same price as a house these day's. Plus you have to pay HOA fees😩
@@moniquewashington4319 facts
U do know the new town homes cost as much as the single family homes
Literally no diference. Any money "saved" on a lower price is consumed by a vicious HOA that will forever hound you over petty shit and has legal authority to fucking forclose your home if you don't comply.
I'm so glad I live in middle earth and got my house for $125k a few years ago. These current and east and west housing prices are wild.
Houses in northeast Ohio are still going for 100-150k, but some are in not great areas. Livable still
You live in a Tolkien fantasy world? lol
@@CrypticCobra Possibly! 🤣
If 75K is her annual income, then you would simply divide that number by 12 to get the monthly income that underwriting will use. If the borrower only gave you her gross income every paycheck and said they get paid bi-weekly then you would times that number by 26 to get the annual income but in this case she already gave you the annual income. So $1,800 x 26 paychecks = $46,800 for her net income.
My friend and I bought together! We are at the top of our budget and we need to move again but can't afford the area we need to move to. Welcome to expensive Utah. House prices are insane is Salt Lake County.
new here, how do i download the excel worksheet?
Almost my exact scenario, only I was lucky enough to find a FSBO house for 350k from a friend of the family that would of easily sold for 380K. I had been getting outbid by 20-30k for months in WA state. MATAME
Hey dude congratulations to you and your family
My situation (on one income)
-gross 8.5k , net 5k
-790 credit
-1 credit card ($60)
-300-350k house
-30k savings
I can’t get a loan because my taxes were whack my first two years of business 😑😑😑 definitely crushed my housing dreams 😂
Pretty ridiculous that you have to have any trouble with those numbers. Everything is so messed up now.
@@everydaybodybuilding2282 They probably owe the IRS back taxes or have an IRS lien which is why they can't qualify for a loan.
It also could be because they are self employed. Most lenders will want 2 years of tax returns for self employed and with all the write offs us business owners use it makes our income look bad on paper. There are other options like bank statement loans for self employed borrowers.
@@Isaac.Sinsun I'm self employed I know how it works, I don't think they have less than 2 years though. Could be wrong.
@@Isaac.Sinsun you’s right. I made peanuts 🥜 My first two years of business. Unfortunately, lenders want two years of taxes. So, I don’t qualify for 300k loan 😑 which is whack as hell. I’ve been making better money for 6 months and my gross/net continues to increase every month.
Like the dream crushing series, fosters creative action.
It would be helpful if you used her actual earnings, she said $3,600 is what she averages as her take home so use that. It's better to over budget and end up with a surplus at the end of the month than a deficit.
I think it would be helpful if you would show a cheaper home in the scenario of affordable housing. It would also be helpful if people shared the full picture of their living expenses for this exercise.
People who don't budget tend to forget about things they spend their money on, so it's not just what the house payment will be, but also how that payment effects your monthly expenses.
What's her current rent payment? It's probably not 72% of her net income. I'd say her mortgage shouldn't exceed $2,000 a month so she can still live comfortably on $1,600 towards her living expenses. The bigger the house the more expensive it is to heat and cool. With a smaller mortgage payment on a less asthetically pleasing home she can make upgrades to cut down on utility costs and add value to the house for possible future resale.
Great video, thanks!
I agree! Not like you can drop your healthcare, dental, life insurance, 401k or other deductibles form your pay. You have to use actual take home pay.
She needs a reality check.$ 3,600 per month and u want to spend 2,600 on mortgage ?
Technically, that $2600 included the 1) mortgage payment (most of it goes towards the principal on the loan tho), 2) property taxes and 3) the mortgage insurance. It's f'n insane.
Most of us making that salary are renting for that much because that’s how expensive rent is. It’s gross. Home prices and rent are so over inflated.
hey Javier can you be so kind to share with me that link for the budget/affordability worksheet? I don't see it in the description. Thanks in advance.
Where can I find this excel sheet he was using?
You're right about the buying with your friends. I'm about to buy a 2 bedroom place with a friend, and whenever we move out, we'll just rent it out.
How about finding a husband or wife!?
The fact that people don’t think of what you can afford vs what you qualify for is crazy. I’m glad you always bring it up
Is it possible for you to do it with an example of having a cosigner?
That's why I decided to move up north to Greeley. It's cheaper and you get more bang for your money . last year my net was 3400 my house was listed at 300k and brought it for 338k. My mortgage is 1600 ,my rent was 1300 for a 1 bed apt in Thornton with bad ac . I just realized if you want to live in the city you have to work yourself to death to be able to afford something crappy. That's not living.
Im confused on how your mortgage is so low? I bought a house for 301k (taxes 1.2k and insurance 1.3k) and my monthly is $2232?
Not to mention that more than half of homes here in Denver are going over asking. Most offers have appraisal gaps here on those offers, which is additional money needed up front beyond the down payment. It's rough.
I purchased my 397k home last month in Casa Grande and so far so good. Fortunately i can use one entire check to pay the mortgage of 2400 and another check for home stuff and food and some fun
So your home is 50 percent of your take home? That’s typically not the greatest situation, but it can work. Do you have kids yet? Will you ever want a new car? One or the other or both would put you in a very tight situation unless you plan to make much more in the future.
@@Aggie4life77 I sure did plan to make much more. If interested read on to see how I am pulling this off.
After the transfer from Cali to AZ I got a pay raise and I now make around 4800 biweekly. Of that amount i take home around 3300 biweekly after taxes and all other deductions such as health insurance. Do I have kids? Yes a 3 and a 9 year old and honestly my kids have never been a financial burden to my wife and I.... Not yet at least. When they hit the teenage years that may change lol.
And yes we are planning on buying a new electric car that will basically cost as little to nothing additional per month. How so? Our house has solar panels (46 panels) that are producing a lot more electricity than what we use. Even in these hot 100+ temperatures we use around 800 kwh per month and our solar system produces around 3000 to 3200 kwh per month. Ever since we moved to AZ in March we haven't paid the electric company a penny and they have been paying us every month. Right now i spend around 700 to 800 per month on gas for my car. So basically if I buy a electric car the car payment for it will probably be around 700 to 800. Instead of paying the gas price for my current car I will put that money towards a auto loan payment hence why I mentioned earlier that it may be possible for me to buy a car that will cost me little to nothin additional monthly. Since my solar system is over producing by a long shot I will basically be able to charge my electric vehicle for free thus resulting in no car gas cost and no increased electric bills thanks to solar.
Family and I are so happy we made the move to AZ from Cali. Everything has been going good and things have been falling into place. Our home even got appraised for nearly 20k more than what we paid for it and it has also gone up a little since March. Buying this home was intimidating at first because of the world of unknown that lies ahead of us but we just stay positive and tell ourselves that we will take on whatever challenges this world throws at us. Anyways good luck if you are planning on buying a home yourself or have done so already. And if you haven't got solar do it. It's great!
i was just thinking her Net amount seemed wrong, good catch, love this video
Omg. She is in exactly same boat as me
as of now i claim zero for tax withholdings. how much if any does this change my take home once i buy a house or start to claim 1 or more? i dont think i have seen any videos about this on youtube. thanks
is the sheet no longer available?
I'm buying a home for 410k in FL. So we are putting 83k down so our payments will be 2638 a month. After paying this for 30 years plus the 83k down that puts our overall at 1 million. Is that normal/ right? WTF
how do I get the spreadsheet
A lot of comments in here are saying go for it. These people are great at giving bad advice.
What are the options? Keep paying $1700/month for an apartment or a maybe $800 for a room in someone elses house? Screwed either way with rent increases.
@@Deelifull she needs either a roommate or to move to a cheaper area. Just because you need a house doesn’t mean you need a $400k house @deeliful
Yeah get 350K home
From the thumbnail this is insane ! A lot of people are in similar situations in mortgages like this loosing their minds
My combined annual income is higher than hers, and I couldn’t imagine how much I’d be struggling if my mortgage payment was that high. I currently pay $1,500 and still struggle sometimes with bills, especially with inflation. She should probably look into property further East where she may be able to find a house just below 400k and endure a longer commute.
Stop doing drugs
Do most people really only put 5% down? I was thinking 20% was standard?
Maybe for baby boomers. Who has that much money to throw down? Houses cost quadruple what they did when that was the standard and the average income certainly hasn’t quadrupled with it
I put down 5% with good credit. If you can get conventional, you can choose what you want to put down, 3% is minimum, but you have to remember PMI until you hit 20%
They do but then are house poor.
Most aren't that filthy rich, average family doesn't HAVE 10% let alone 20
@@jtowensbyiii6018 yep and just to add insult to injury. Most first time home buyers today are saddled with large amounts of student debt as well.
How do student loans figure in to thay budget worksheet?
If there is no set payment for student loans then the lender will either use .5% or 1% of the loan balance. The percentage is determined based on whether your loan officer goes with Fannie Mae or Freddie Mac.
Stick to 25-28% of your take home monthly pay. Anything higher, you’re at risk of being house poor esp above 35%
I mean it depends on how much you make once you get close to 6 figures a year the % falls out the window because 50% off $2,000 is only $1,000 while 50% of $8,000 is $4,000. Sure the person with only 1k left over every month will have some trouble but the person with 4k a month is more than good. Unless clothing, grocery stores, and amazon start charging prices based off your income.
What would you say to someone in the same situation only difference is I have the option for a VA loan
I was in the same boat as her. I'm single making 85k a year with an 815 credit score. Just recently closed on a house 2 weeks ago. Got it for 430k. Paid 30k over the asking price. Even though my morgage payment is around 42% of my take home pay, i can still live my life and have fun because I dont have any other debt. The housing market will not crash anytime soon.
Curious how you are holding up with your house payments. No debt a year ago when you bought your home but eventually you may have a new car or unexpected bills. I ask because I’m wanted to buy a house but am scared to make that jump. I can easily afford a 300k house too but worry about the unexpected down the road.
I'm holding up pretty well on my house payment. It's been a year now and I'm bless that I made that jump because I got it at 3.275% interest rate. You also get tax benefits when you have your own home. I got around 2500 just on my property tax last year. No unexpecting bill as of right now as long as you know how to manage your bills. I thought about getting a roommate but I love my space. You need to have an emergency fund. I have around 8k just in case something happens.
And Im gonna be honest with you, If I were to get a house today in todays rate which is in the high 6's with good credit, I wouldn't be able to afford it. I mean I can, but I'll be living paycheck to paycheck. So you gotta have a huge down payment. Right now it's ridiculous to buy a house, unless your ready 100 percent. The interest rate is just too high. Unless you can get a house under 300k.
@@G_Money_confused what you mean by tax benefits... you PAY property taxes for the right to simply own the home. The only "tax benefit" is your interest payments are tax deductible. Tax deductable does not mean free money.
Also you should prob get a roommate for a few months at least and put that money into your emergency fund. As a home owner you need a lot more than 8k for emergencies. For example, what are you going to do when your roof starts leaking and you need a new one.
I didn't even know you could buy a single family home for under $600k in Denver...it's rough out here.
Question: Should I wave the appraisal in order to complete with the California market?
Back story: Ready to buy, i think. I keep getting out bidded by cash offers and more money and i see some people getting the homes by nullifyin the appraisal of the home. WTH!... Shoud i do the same? what are the risks? Why is it good or bad? please help...
Well it would depend on what type of loan you're getting any goverment (FHA, USDA) loan is going to force you to get an appraisal. I'm sure other conventional loans are the same unless you're bringing a huge down payment with 800+ credit. Let's say your lender is okay with waiving it then the main factor as to it being "good or bad" is just simply that you over paid for it so if there ever comes a time you want to sell it and move out you're not going to get what you paid for it. Possibly making moving out not a possibility until the house is fully paid off. The other main concern would be insurance, let's say your house is 100k and you paid 200k. The insurance will only cover what the house is worth so if its 100k and a fire happens and it all burns to the ground you only get 100k from the insurance not the 200k you paid. If you're 10 years into owning a home and it catches fire your only option at that point would be to use 100k to build a home again on that property unless you want to continue making your mortgage payment while also paying for somewhere else to live because 100k wouldn't even pay your loan off fully if the fire happened at the 10 year mark.
Great stuff! I really like your content Javier. Hope you can give us a grand tour of your new home soon! Can’t wait to see it.
420k for a home in the Denver metro area???? That's called a condo. I've actually got a hold on a new home about 34 miles north of Denver. The new homes 558900.00 but luckily I've got a home I bought in 2008 for 170k. It's estimated to be worth 485k but I've put a lot of work into it so I'll probably get 500k+ but even with all of the equity I've got I can't afford to move within the metro area. This is why I'll move away from the city, and if I sell my house at market value I'll be able to put 44% down on it and keep my mortgage manageable. If I stayed in the metro area I'd hate to over pay for anything and get into bidding wars so basically I'll be happy to move outside of the city in a lower demand area and keep my mortgage manageable.
no.. i am so pissed cause i own a home already and i need to put 10% down no matter what in TX
There are 52 weeks in a year (365/7). Divide that by 2 and now you have 26 biweekly periods in a year
Why did he divide by 13? there are 12 months in a year and that is what you divide the annual income by. Maybe I missed the part where he explained why.
Because there are 26 paychecks in a year
@@girlfriend7558 right but lenders use the monthly income. Doesn’t matter how often someone receives their paycheck.
Perfect time to wait and keep saving if your situation permits
Great video, but disagree on not mentioning additional savings. A good lender will have a conversation and understand the clients needs and goal. Having additional assets even if not being used the lender could that as reserves. Specially when buying conventional or when buying multi families. Also with fha you can buy a house with a little as 500 per hud, and most lender will allow 580. Keep up the good work. Keep the mind the cost of waiting
The example house at 4:16 should NOT be $440k that makes me sick to my stomach.
When you say she can qualify but not afford, are you saying that she will get approved for that amount but you don't advise it? Or will the bank deny her? Just asking for clarity. Thanks!
She would be approved for that much, but it wouldn’t be wise to spend that much. Lenders only look at monthly debts compared to gross income. You have to do your own due diligence to determine whether that amount actually makes sense based on your net income and lifestyle.
@@2012brycer Thank you!
Hey Javier, what’s the benefit of putting down 3% or 5% ?
Another interesting walkthrough thanks Javier.
I live in Denver and bought a 400k home as a single woman in 2018 but it would be impossible for me to afford buying now! Lots of single people in Denver but homes and rent out rooms in their home so they can afford the mortgage. I only have one renter but it's another $1k per month that I can put toward my mortgage.
What's crazy to me is it seems like people are totally OK with being house poor. Paying $2500 a month, every single month, to simply exist in a box is outrageous. Do these people not realize that they are tied to this payment for ~30 years come hell or high water? Maybe it's just my lack of being romantic with drywall and some lumber but it seems crazy to me for these young people (myself included) to be signing their life away on hundreds of thousands of dollars that relys on everything going right in order to be able to afford the mortgage.
Yeah thats unfortunately the world we now live in. We should be a little greatful though atleast we can still buy houses. Im sure in 30-40 years buying a house wont even be an option unless you're stupid rich and everyone will just have to pay for rent and live in apartments or old homes that were turned into duplexes and triplexes.
You have a very twisted view lol. Unless you don’t ever plan on earning more, your mortgage payment becomes more and more manageable as your income grows. If you don’t ever by then homes will continue to increase in price and you’ll be in the same situation complaining that you can’t afford a house 10 years later. I bought a house 7 years ago. At the time the mortgage was more than double what I was paying for rent at an apartment. Now apartments rent for my that my mortgage.
is it cheaper to buy or build a home?
Is it ok to file taxes 2 wks before closing or could your loan get denied even if your debt to income is still really good??
I’m at 12g a month 799 fico 35g down. My loan officer said qualify 450g but I’m afraid because I’m not sure if I can afford it a 370g home my payment is 2700 at 5.35% I have no debt
At 12k a month you could afford much more than that if you wanted to, especially with no other debt. I would just pay the home off in 4 years at that rate. Save yourself a year of working in interest only.
Love the fairy fountain background music
Just keep waiting the market will take 2 - 4 years to unwind. Already seeing a real slow down at the over 1M market in Colorado can rebuy a better home in our neighborhood for 250k less than what we sold our home in late 2021 / early 2022. This will trickle down to the lower markets as less an less buyers don't show up.
Hi Javier, I'm a loan officer. You calculated the monthly income incorrectly. If you have the annual salary, just divide that number by 12. This is because we have 12 month in that year and we want to get their monthly gross amount. You do not use the # 13 in this scenario. Now if you dont have their annual salary and they give you a different unit, like their gross biweekly pay amount we use a different formula. (That formula would be multiplying the gross bi-weekly income amount by 26, because there are 26 bi-weekly pay periods in one year. Then we divide that number by 12 to get the gross monthly income amount). In the example for this video, 75k per the year would give me a monthly gross income of 6250. I got that by taking $75,000 and dividing by 12 months. Your original calculation was correct. The second calculation was wrong. Hope this helps!
It looks like he explained this at 4:32. He started at 6250, corrected and explained why the lesser is valid.
@@TH-jd8ft he is incorrect. Thus, the reason for my comment. I'm a loan officer who works with these formulas daily. Thanks for you input but I noticed his reasoning already.
@@sandralindor It's amazing that some people can't do something as simple as accurately calculate income. You laid it out perfectly.
@@Charlesbjtown thank you!
No, she cannot afford it, could have said that before watching the video (after checking her income). I make 95K a year and mortgage and taxes are 1630 a month (mortgaged 255K), that's about what I would be comfortable with!! As DR says, if you home becomes a burden and a financial nightmare, its no longer a blessing or a dream, better to be without a house then in a house you cannot afford!! Hopefully at some point she can get her dream house!! 🏡
How do I get a $500k whith 3,000 a month salary but I would live with my wifes parent so they would pay half of the mortgage. How can I go about acquiring a house for this amount
Great video. But perfect example of people trying to live beyond their means! Why does a single women need a 440k house.
you have to adjust your taste in homes, as a start..
Yall forgetting she knows she may need a roommate. If she gets one and can 1/2 or even get a 1/3 of her rent taken care of by them then she can def get herself situated.
This!
Her financials are very similar to mine BUT. I live in Southern California. I’m straight screwed.
I was going to say, it’s possible to do this, assuming you make about $120k/yr. The reason I say that is that I make about $40k and bought a $100k house. Assuming the person in question is good with budgeting, it’s possible on just 1 income, assuming the mortgage provider okays it, because the amount possible to save over necessities grows the larger the income gets,
Those $100K for a house are OVER. Sadly.
In my town, you can get a .06 acre of land for that price & put a tent up.0
@@Deelifull I paid 110 last June, and it’s up to 135 now. It’s not an ideal house at all but it’s mine and it’s affordable
@@Deelifull where my family lives, their house is worth only 60k. You can absolutely get houses for 100k still, at least in the Midwest.
What is the credit card, that should be factored in as the balance, not the monthly payment. ALL CC Debt should be paid off before buying a house!
Townhome is the go for her
oh no. Those HOA fees will push it out of her budget very quickly
Condos and townhomes are the same or higher monthly prices due to insane HOA fees in Denver on top of asking 400k for a 1000 sqft condo
@@nanii22 dayummmm, Forgot about those🤦🏾♂️
@@TheVollo9 many of the HOA fees cover water, trash, and outside maintenance. Which usually ends up evening out. Unless you're taking downtown Denver.
@@TheVollo9 lmao NYC condo is $400k for a 500 sq ft with a $900 HOA fee covering only heat and gas
What if you don't have any money saved , but are gifted half the down payment 🤔 an save the other half of the down payment by closing? 350k house closing is around 21k
Depends theres things like sellers assistance where they pay most of it. I just bought a 300k house and only paid 7k to move in while using sellers assistance. I live in PA and had an FHA loan.
Nice Zelda music! I am a huge Zelda fan!
Look for a starter home..condo or townhome!!
In 1960, 65.2% homeownership in the USA. In 2021, 65.5% homeownership in the USA. Homeownership percentage in the USA has remained stable for the last 61 or so years. The percentage of homeownership hasn't changed much in 61 yrs but I think the percentage of American's expectation of obtaining homeownership has changed.
Is homeownership less affordable/obtainable than it was in 1960? The statistics indicate there has been little change in homeownership. I think the expectation of homeownership has changed.
I’m getting denied because of paper trail my dad was gona give me the money as a “gift” he is actually illegal and currently waiting for the last step in his immigration status.. Anyway he does not have a bank account so I’m being denied just two days before closing even though #1 he told me that on the “gift “ letter no account number was needed an second he turned papers over to underwriting just 2 days before closing I had no chance to explain or asked if I new anybody with money in there account and was able to show how mucH she has and what she is taking out.. please can I be saved? HELP!! Money for closing is only…$ 3,700
Video suggestion... Can your loan be denied after you close?
This person can afford it on a budget. It’s not that bad. Later in a couple years the mortgage will seem cheap
That's insane. She brings home $3,600 and a $2,600 mortgage leaves her with $1,000 for her minimum credit card payment, utilities, food, transportation costs, toiletries, household cleaning, savings towards home maintenance, entertainment, clothing, and anything else she currently needs as a necessity. Even tightening the budget and eliminating the entertainment and clothing budget still leaves her with all the other costs. She has to eat, use the toilet, and take a shower. It gets cold in Colorado so she can't bike to work in the winter. She needs to look at cheaper, more affordable houses.
@@1Letter23Numbers. I mean yes if she really wanted to sure she COULD do it but I just bought a house for 301k (1k taxes, 1.3k insurance) and my monthly is $2232 so on a 440k house with higher taxes and insurance then I pay, I don't even think the 2,600 number is real. It would be Ill advised to only leave yourself with $1000 a month especially when you havent factored bills and groceries into that. One uncontrolabale emergency happens and you're fucked.
Some times you have to live with a tight budget not everyone has huge amount of money in savings accounts. If your bank approves it go for it and manage your cashflow as it goes.
That's discouraging. I make 52k, almost 60k with bonuses and overtime and was hoping to buy something for around 400k next year :(
@Rachel Sheldon Well I'll have 80k saved and planned to use part of it as airbnb so it made sense to me
@@quitecontrary3790 you need about 30k more
Javier got those wise grays coming in.
Consider the house hacking strategy. Maybe you and another person can buy a duplex/triplex together, live in it, and eventually rent it out to others after a year or more.
The photo of the $440K house looked like nothing to write home about. I can't imagine what a $300K house and neighborhood would look like.
So for most northern states you need to make over $85k when the average income for a millennial in the U.S is 35k. This is dangerous, as it forces people to live with or even marry people for financial support like back in the old days when families would marry off their daughters. But at the same time there are people paying over 2k for apartments! So for most the choice is either be poor in an apartment or be poor in a home that you can use in the future to rent/sell. Like don't tell people that they are better flushing that same amount for an apartment they'll never own.
If she gets a roommate or 2, she can make it work.
Watching this video today is disheartening. I am not sure how on Earth the taxes are that low, but even then a $2600 monthly estimated payment on a $400k+ home would be a dream in today's market. Also, how are closing costs only 2%? Where I live in PA, I am seeing 4% or slightly above for average closing costs.
Main was crushed. I make $3,000 a month.and $3,000 in cash. (Been taking care of my nephews for 5yrs my sister has a bussniss. $1,500) and I have a client for 3 yrs her family gives $1,500 cash ) so none of this counts. NO debt. 771 credit score. I have $100,000 saved ( took me 3 yrs) and bcuz I only makke $3,000 I qualified for less then $300,000. At this point I would have to get a payroll job and be there for 2 yrs.
Why not mention taking advantage of 1st time buyers buyers down payment assistance.. in some areas its 10k + FREE $$
Great info as always. Great video. Just a note - to calculate biweekly income you multiple by 2.167 to get per month income . To get the yearly net income using you method of 13 . You take the biweekly income multiple by 2 then multiple by 13 to get the yearly- the easiest is to multiple by 26 to get yearly, the better method is multiple by 2.167 to get the monthly, to get yearly then multiple by 12. Cheers