How To Know How Much House You Can Afford
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- Опубликовано: 20 май 2020
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Does the 25% house payment amount recommend include all expenses associated with home ownership (property taxes, utilities, property insurance, condo fees?) Or just mortgage?
@@luckyandblessed no
Rather than relying on penny stocks, I wish to diversify my assets by investing in real estate and mutual funds and stocks of corporations with stable cash flows. I have a high interest mortgage and I’m wondering if to pay to off or purchase more real estate and flip. What should I do?
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I've been looking to get one, but have been kind of relaxed about it. Could you recommend your manager? I'll be happy to use some help.c
’Sharon Lee Peoples’ is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
Was approved for a mortgage of 300k at the age of 22, but decided to only spend 220. Still live in this home 5+ years ago and love it. The monthly mortgage payment (with property tax) was only 20% of my monthly income. Didn't want to be house poor and wanted to travel (which I did) and very glad I went this route.
Now doing foreclose property management, we see A LOT of people who bought more then they needed to feed their ego's. It's sad to see but they put themselves in that situation. Be smart.
How did you get approved? I'm 23 and plan on start saving for a down payment. I want to increase my chances of getting approved! Currently, my FICO score is 748 and my Transunion score is 754.
@@avapilsen Probably makes a lot more than you do
Me too. I was approved for $300K CDN but house a house for $125000K CDN instead
lucky. nowadays 220K cant even get you an RV.
At this rate, I think I'll probably retire with a mortgage payment of $1000 a month. That's about the best I can do I think.@@NK-vw4ms
Big unspoken problem with home buyers is not budgeting for home maintenance. Plan on about 1-2% of your home value. HVAC units break. Fences fall down. Plumbing leaks. Paint fades. Plan on it.
@Stuart Hollingsead I live in the suburbs of Chicago-23 and looking to start saving for a down payment so I can move out of my parents' house, and I always tell them there's no way I can even afford to live in Chicago. I feel like if you buy a house, it's still as if you're renting.
Yes, A new HVAC can be well over $7000.
@Stuart Hollingsead Do the math again. Typical 30 year loan you pay double the selling price of the house in interest.
@@avapilsen just house hack
Don't forget property taxes as well, especially if you live in a blue state--they love to milk ya.
General rule of the thumb:
Don’t spend money you don’t have and assume you will have.
Reality : Average home price in USA is now $400K. Rents are skyrocketing. People are paying $1500 to $2K in monthly rent but cant qualify for a $1700 mortgage. The Industry is insane.
That’s why you don’t listen to this idiot who couldn’t control himself and build credit
What example do you have of this disparity? Honest question, because that makes no sense.
Also, the median (not average, which is misleading) capped at 480k in Q4 2022 and has dropped sharply since then.
@@nwj03a Go knock on 1000 doors then tell me how many could qualify for a $430K Mortgage today. Young people today, are screwed.
Answer the question.
@@nwj03a Are you really baffled that many people are paying $1500 in rent but can't qualify for a similar sized mortgage ?
Here's why :
1. Down payment
2. Credit Score
3. Debt to Income ratio
4. Income doesn't meet Bank's requirements.
5. Length of employment at current job.
There are a million people out there that can't qualify for a mortgage that are paying $2k or more in rent.
They are trapped.
You need to get out more.
Got a decent small house on 1 acre in Michigan for 69k, paid it off in 34 months. Yay!
Man that's cheap as chips
Nice
My sister has a 3 bedroom in Arkansas on 3acres for 52k. Her and her husband got a 30yr loan 😂🤦🏼♀️. I was like omg you could have paid that off in two yrs and still bought useless stuff on y’all income. They’ve owned it for four yrs now. (With covid now they are on unemployment and have no saving!)
Swampcrawler LS1 that’s awesome. Congratulations
@@CesarFernandez-bs2vy thanks, it wasn't easy. But now so much less bills!
Coming from a long term home owner. Do not let your mortgage payment with and escrow, be more then 25% of your total take home pay. You will be so much more happy in life, when you you can make the mortgage payment, and still have money to go out to eat, go on vacation, and fix things when they break.
We did not escrow ANYTHING. Our mortgage is just mortgage, we pay our own tax and insurance. Much simpler and I know that is all paid, not depending on somebody else to pay it.
Hello can you explain it with some maths please?
@@gungun8465 - figure out how much $ your household brings in per month. Divide # by 4 and that is the amount you dont want your complete mortgage payment to exceed.
Yeah you can't do that here in California so...
Not in nyc baby lol
I think it's best for a couple buying a house to base their purchase on only one income. That does two things: First, it limits the amount of house they can buy. Second, it makes it possible to keep the house if one of the incomes suddenly stops. Things like a pregnancy, a lost job, or an extended disability are far easier to handle if your house payment is low. If you can't make house payments on one income, then you're constantly under the threat of losing your home, and that's not a good feeling.
(edited for spelling)
Exactly what I’m doing. Don’t want to tie myself up with a huge monthly payment
Exactly what we did!
This is a really sound strategy👍🏻
Wow this is excellent advice!
Yes! This is how my husband and I live. Your monthly bills should reflect one income and don't waste the others income on garbage.
I have been waiting for 6 years to buy a house. Waited for my fiance to finish school, got married, had kids, kids are now 5 years old and we are ready to buy. During those years of waiting, been able to save a 20% down for a 🏠; Have one year emergency fund; built my credit to low 800s. My advice is to wait till she is done with school before buying. You want to walk into a house knowing exactly what you are operating with financially. Not saying it will happen, but she can fail some classes and what would have taken two year to graduate will take 4 years, therefore costing you more money.
@trufiend138 According to Dave anything paid off within 15 is already pretty good
Whoever said women were greedy?
The guy calling in sounds kind of dumb and not very dependable anyway.
Very good advice. Home ownership is much more expensive than people think with mortgage, insurance, repairs, regular maintenance, taxes, etc.
Thomas Morrison yep. Plus the other accessories like a lawn mower, etc. can keeping those gutters and water sprouts clean and replacing busted pipes and more! Some people don’t understand the added expenses!
I just found Dave and I appreciate that he’s brutally honest!
Eh, I just buy based on whether we can afford on one income...plus 20% down is a must. Pre approved for $500,000, house we bought was $225,000.
Why is 20% a must?
beth knox because you avoid paying mortgage insurance...if you put less than 20% down you have to pay mortgage insurance which is a bs charge and can be 50-150/month depending on how much down you put.
@@BethKnox32 also if you put 20% down your principal is lower along with your monthly payment.
As a 23 year old looking to buy a house soon, this video came out at the perfect time
How much do you have saved? Just curious because I'm looking also but not sure I should have saved before I do purchase.
Facts
@Backcountry Bobcat That's not throwing money away. That's buying time. If you pull the trigger without 20% now you're dealing with PMI. Then once you're in the house your monthly expenses will certainly average more than $900. Take your time
I have 8 thousand savedtrying to buy a 68,000 house with fha pmi won't be much I'm still looking at 600-700 month morgage or less
@@javontedonuts1034 Where the heck can you buy a 68k house? Is it in shambles?
I think it varies per situation. I started out at 40% for years and now at 35%. I have no debt and am very responsible with money so I've been fine and am half way to paying off the house. I think the most important thing is you have to be disciplined when it comes to money before you can even think about owning a house.
Thank you for the video Dave! We got our 1st house at 23 and bought what we could afford at the time, while I was still at school and working a restaurant job. We were still house poor, but didn't have any extravagant expense. I was even able to save up for a small car on her finger when I proposed on my graduation day. After I graduated, we bought another house and still kept (and still have) that house as an income property (in Seattle). Make due in a smaller house now, then that house can be an income generator when she graduates and you have kids. You will be upgrading/moving into another house in an average of 3-5 years anyway.
Buy the smallest decent house that doesnt have a bunch of extra stuff you dont need/use in a good neighborhood. I have a 2br/2ba apartment that I paid cash for, even though I can afford much, much more. I took the difference and invested it. One of the best decisions I ever made. I feel such releif and security by having a small, affordable, paid- for home.
do you perhaps live in the middle of nowhere, that you think a 2br/2ba is a small apartment XDXDXD clown
At a great time this came up because I've been trying to figuring out , how much of a house I can buy with my income ? GREAT INFO. Today Dave's Titles/videos are ON POINT.
We were house poor for 15 years 80% of our salary goes to our mortgage and property taxes. We lived with just the basics and sometimes our salaries were not enough, there are times our cellphones would get cut for non payment and finally year 2018 we paid off our mortgage. We have a fully paid house 20 mins away from San Francisco Golden Gate Bridge, I wouldn’t say I regretted what we did especially during this covid19 pandemic. We feel secure that we wouldn’t be homeless
Couldn't you have been secure with a house that didn't take up 80% of your income ???
P Tc 👍🏼😊
perotal we don’t make a lot of money as we were just Baristas in a coffee shop making $12.00/hour plus tips. For a few years I sold items on eBay and became top rated seller selling north face jackets.that was year 2012 i would use the income to pay for our property taxes. i didn’t even have the capital so I would just go to the outlet tell them to hold some items then would list them when I see my items sell I go back to the outlet and pay for them with credit card then ship to the buyer. Life was really hard for us but it was all worth it and exciting
P Tc awesome, how much is your house worth?
Deeken Wheeler it’s about 600k it’s a small 2 bedroom 1 bath waking distance to UC Berkeley and with no traffic can go to Golden Gate Bridge in 20mins
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Is that 25% net or gross
I wish the average house payment in California is $3000 that’s 60% of my net monthly income
Same rule for renters but almost no one follows that rule. In my market you’d have to make $3,600/month to rent a typical 2 bedroom apartment. The people that earn that much aren’t interested in the $900 apartments. They want the $1,200 apartments.
Quincy Lockett I’m right on 25% renting but net not gross.
Dave I would like to call in to get some advice from you, but I live in the UK. Would that still be possible?
I really appreciate videos like this, that explains the logic behind the advice. Thank you.
My wife and I built our modest ranch house 26 years ago and at the time the PITI was 34% of our income. We felt comfortable with this at the time because we're so frugal in other areas of our budget. Despite many jobs losses, injury and even serious illness we never had a problem making a single mortgage payment, even during a 50 week unemployment stretch during the great recession and paid the mortgage off 5 years early. If you're frugal, you can stretch that 25% but ONLY if you're willing to think outside the box with other expenses.
Maintaining a house can be very expensive! That is all. Thank you for reading my comment.
lol, it definitely can be. It is almost as expensive as making a landlord wealthier.
@Dominique A Okay, I will bite. Why do you think owning a home depreciates like a luxury car? All my homes have appreciated with time. Repairs and maintenance (R&M) on our investment property (including painting, lock changing, cleaning, new carpets, repiping once, etc.) has totalled $25K over 14 years. All while the home has appreciated $220K (according to Redfin and Zillow), we are building equity as our tenant pays, and we get a monthly income after factoring in mortgage, taxes, insurance, R&M, etc. Keep in mind, 100% of your rent has zero return.
@Dominique A who's better off when one is in retirement. Someone who has a paid off house and only pays a yearly property tax payment, or someone with a monthly rent payment that gets raised annually and at the mercy of a landlord?
Seems like there's a deeper story behind this comment. 😆👍
That's why one shouldn't buy too much house, always leave a buffer for things that will break or need to be repaired. Meanwhile I'm building equity and paying low fixed interest, while renters are at the mercy of thier landlords.
Just the video that I’ve been looking for. First time home buyer. Thanks Dave 😀
Pretty straightforward answer. With changes in income and with kids coming in a few years that will probably cause you to move anyway, hold off on a house purchase until your situation is more stable. For now, just live in what you need/can afford with your current situation.
Dave is 100% right. Don’t go too high on your mortgage. I made this mistake 10 years ago.
What's your situation now?
Definitely agree to be more conservative with all this uncertainty, but this could also bring opportunity to get a great deal on a home!
Once you see Warren buffet buying up real estate then it's time to buy!! Xd
The deals will most likely be better later on.
Wait 1.5 to 2 years the deals REAL deals havent to begin. I KNOW.
@@MasterDatingAbroad so true. I made the mistake of buying at the end of 2008. I closed on January 8th 2009 if I had waited another six months the same house I bought was $60,000 less
Your beautiful.
Why do people look to buy the most expensive house they can afford... I'm looking to buy the CHEAPEST house with the biggest down payment and then pay it off ASAP
Lol, I can't find anything cheap enough!
As long as it's not a dump.
Thank you Mr Ramsey!
Depending on country you live in, if you plan on having a baby or two then simple max house payment is when you can live off one single monthly income (for example man works and woman stays home with kids). For some reason vast majority of my peers buy a real estate they cant afford to pay when they decide to have a baby.
In my opinion, if you can get a home payment at 25% of just your income, if your wife is going to stop working for a while, that would be good. Beyond that, I think choice of home should be based on what works for your lifestyle, location, and needs. For example, someone who moves a lot would likely be better off renting. Someone who has a big family will likely need a larger house. A house near where you work is usually good.
Earlier today I went to the bank and asked for a cashiers check withdraw to the sum of $440,226.70 paid to the title company on my first home. It was tough, while sitting there waiting for the bank teller to go get that cashier's check as I logged onto my bank app and see my savings of $449k drop down to a little over $8k remaining, BUT good to know I don't owe on a monthly mortgage and lose out on interest over X-years. Good feeling to know I DEFINITELY have a roof over my head for life during "trying times". That said, house is paid for, 2014 Honda Accord is paid for, an "emergency fund" of about $160k. I think I'll be fine 😜👍😂 ,,,
That's great, but I really hope you didn't have $400k+ sitting in a checking account for years earning near zero interest. Remember, inflation is always happening so if you're not earning interest you're effectively losing 2-3% per year.
elmateo77 Had it sitting in a Money Market account and was making about ~$250/month ... something is better than nothing I guess
Nice story. I could feel the pain of you describing throwing that money ar your mortgage and also the joy that comes with it.
ANTHONY N. How old are you?
Ferlydai 41-1/2
The house mortgage can be affordable, what will eventually hurt are the taxes.
Our mortgage used to be 25%, now it's about 14%. I think the biggest financial mistake people make when they start making more money is buying a bigger house. Save/invest the extra!
If you look back at colonial times, as the farmer/land owner prospered, they didn't move. They simply added on an addition. The trick is always buy a place with a lot of land.
@@AStanton1966Yes, if you can afford it. Although, land costs extra money to maintain.
@@kbanghart A radio talk show host described it best once. He said, "Land is an alligator--it eats!"
So I make $25+ an hr full time and by Daves math I can afford a small shack in the middle of a corn field in Montana somewhere on 1/15th of an acre.
Exactly. You can then commute to work in Canada and your money will go a longer way.
It sucks that you can't afford anything where you live. Where I live you could buy a pretty decent place with that income.
It depends where u live.
@@thecatnextdoor12 LOL
@@thecatnextdoor12 😂😂😂
Least expensive house in the best neighborhood. It’ll hopefully appreciate and you can turn a profit if/when you sell it.
I can afford a shoebox 🤣
don't forget property tax
I would base off the low income. Our income has increased over the years and we did not upgrade cars or house. Just save. Don’t spend money you don’t have yet.
My house payment is less than 25% and I’m totally fine with that. It gives me more room to save
Yay! Needed something like this. ✨💗
That's Good Stuff Brother Dave!!!
My first place, I wouldn't even let the mortgage company tell me what I was approved for. I knew it would be ridiculous. I asked if I could afford or be approved for 100k. The woman laughed at me and said, "Yeah."
In 2012, I moved back to an old location to be near my family. I took a 75% pay cut. This time when I bought, I made a budget considering all aspects of life - house, food, utilities, etc, all on a $10/hr budget. I make 46k now, but I know that, if something happened to my job, I could find something making at least that amount.
I ended up with a little 1 bedroom home, which has exactly what I need, no extra, unused spaces, and I paid $76k. Given everything that's going on now, I'm so glad I went on the more frugal side.
What if the market crashes and the house is now worth 50k. Will u be happy then ?
That's exactly what I need, a 1 bedroom apt. I feel much safer in smaller spaces and everything is within an arm reach.
Bought a house a couple of weeks ago and I’m scared. But I was so used to live in a small apartment with low rent. But the house came down in price after appraisal and I have good savings since I didn’t spend it on stuff at all. I’m probably too cheap
What’s ur Instagram?
Great question, great answer.
I bought half the house I qualified for. I could have made the full amount work but glad I didn't. Don't regret it in the slightest.
Yeah but who lives in the other half of it? Kidding. Living below your means is the way to go. Especially in 2020 and the foreseeable future..
The wife and I bought a duplex and live in it. The mortgage payment after rental income is 25% of 1 WEEK of our take home pay. If the tenant for some reason isn't paying rent, the mortgage is 75% of 1 WEEK take home pay. Its a very very relaxing lifestyle.
This is what I want to do.
@@meymay11 we just started but it is already a easy easy way to live. We just looked around and found a duplex that costed a little over what we make in a year. We still have to complete baby step 2 but the plan is to have this place paid off and be totally debt free in 4-5 years.
25% for a 400,000 CONDO in Southern California is 100k downpayment. That’s significantly harder to save for not even a house, a condo.
dave's teaching excludes socal lol... even with 100k/yr it's hard
the 25% rule is ridiculous, especially in CA. the rule of thumb is 36% of your GROSS pay on a 30 yr mortgage, not 25% of take home pay on 15 yr mortgage lolol
Great video!
Guys, if you go even lower. Do 20% POST mortage+propertytax+insurance. In my first year and OMG it feels good not to be home poor.
Can you please explain further? I'm 23 and plan on starting to save for a down payment.
What about 33% of take home pay? I want to continue living in CA...so 33 % feels like my most realistic option. 25% feels out of reach here.
I agree.. here in the SF area I could only afford to rent a bedroom for a quarter of my income and I have a great job. I’d have to go to Stockton to find something in that range 😬
@@kimberlyjennings618 and I wouldn’t want to go to Stockton...lol
I'm 30 and live in Northern California currently saving for a condo hopefully within 5 years then rent it out and purchase a bigger house to actually live in. Roth Ira is currently stacking so I'll keep this plan and see what happens
Why buy when your wife is in school? Wait 2 years and after your wife gets a full-time job.
Exactly! What’s the rush?
For real! Its probably the wife bitching and pushing about getting a home quick
I was thinking the same thing. Buy after she’s done with school and starts working
If they’re renting, they are wasting a rent payment x 24 months.
@@Josh-px6xb because they can be qualified for something better. Can take time and feel the market.
I want this exact question answered today.
I was approved for a 45k HUD home that was perfect for me, but since I've been laid off from covid19, they wouldn't go any further with my pre approved loan because I had no proof of income other than unemployment. Hopefully I can try again once I get back to work. Thanks for this video.
You’ll get there! :)
That makes perfect sense Dave, thanks for information. We are looking to purchase our second home and boy is it tough with the prices of these homes today! But we most certainly don’t want to be house poor and this just gave me more perspective for sure. Thanks 😅🙌🏾😁
Just wondering...what did you decide to do?
@@neena1185I'm wondering as well, but perhaps we will never know 🤷
Sometimes I wonder if my wife and I made a mistake buying a house too young and unprepared (we were 20 years old, 25 now) but now we have 90k in equity so I’m thinking we made not such a bad choice
Just bought my first home in Canada, although his advice is sounds the real world is quite different right now. Houses in my city often go for 100-250k over asking and the AVERAGE detached home price in my city is 750K. Advice to navigate this type of situation would be interesting.
Move to rural Alberta.
I hate to say it but math is the real world. If your house payment is eating up your income, it's eating up your income. As Dave says and it's true, you don't get a pass on math because your certain situation.
Sure you can creep up to 30-35% of your income but life happens, something breaks, a worldwide pandemic cuts down on your OT at your job, whatever and now what used to be 30-35% is now 50-60% and you're staying up at night moving money around to try and make ends meet....
My advice is to wait till she is done with school before buying. It is best to walk into a house knowing exactly what you are operating with financially. You never can tell what will happen while she is in school....She could fail some classes and what would have taken 2 years to graduate will take 4 years, therefore costing you more money, thus causing financial, emotional stress to your relationship.
My oldest sister (she’s now 58 iirc) decided to get a degree in accounting, as a result of a work injury settlement to retrain and switch a few years ago.
She kept failing on the higher math classes, having to take them several times, big time delays for progress. She’s got awhile before a bachelors regardless of how well she does, because she can’t be a full-time student. She was counting on an orderly progression of school completion. She also ended up using most of her 401k during this time.
I was thinking as you, but not as Dave was: I was amazed he didn’t bring that up at all!
RUclips is reading my mind again!
A few years ago, I was approved for a loan that would've been ~110% of my take home pay w/o ot... I basically ran out of that place. I was making a little over 40k and they offered me a mortgage for a house in the 300s
Mannymd that’s part of what caused the housing crisis in ‘08. They call it predatory lending, which it is, BUT there were also people stupid enough to think taking the money was smart. You were very smart to run out of the place.
Wow
we must of had the same loan guy
$300,000 is NOTHING in California. Houses easily go for like $700,000 here. My parents bought a house for 250k in 1997. It's now worth 850k. There is no hope for anybody here. I'll have to move out of state for sure.
Mannymd 😳
It’s so different here in Europe..
rarely people use credit cards, banks dont allow credit if you already have 1-2 cards (amount of 1-2 monthly salaries). We dont have store cards, where you can get in debt.
Our schools are 500-2000€ per year (“normal” college). And you can be without degree to have a good job.
where in Europe my friend ?
I'm on my way !😁
Just rent for another 2 years and save more money, then when she gets back into full time work look at getting a mortgage
It’s hard to save any money paying rent
Hello all. I do want to say that this channel and facebook page has been a huge help. Question once we finish baby step 3 we will paying %26.3 of our net pay to the mortgage(including taxes and home insurance). How does what dave say about 25% for mortgage and then invest 15% apply? Thanks in advance. 👍👍👍
Great video🤩
I’m debt free rebuilding my emergency fund and saving for a downpayment. I can’t wait till I’m able to purchase real estate in full and build my net worth 😩😩😩
dusty maloney thank you it’s tough I’m sacrificing a lot but I know it’s for the greater good just that sometimes I get discouraged. I’m 22 working 2 jobs debt free
@@ludens1526 keep going u can do it. it is worse to work two jobs and do not make it.
Same! I'm 23 and will start working full time in January for $48k! It will be my first real job ever, and I plan on saving a very big down-payment!
“You’re going to be okay” .....unless a recession becomes a reality? Right????
There will always be recessions and contractions
Wow the first competent person asking a question
This is a really good question.
Make $18000 a year and can only afford a studio here in orlando. Not even a one bedroom.
I'd suggest using your take home pay for the 25% equation, not pre tax
That's even more beans and rice
I always thought that’s how it’s supposed to be done.
@@artemtsarevskiy2785 top comment
I didn't have Dave Ramsey when I was young so I established my own strategy soon after I got married at 19 and was broke (still married) my rule has been NEVER buy a house that cost more than you make in one year !!!!!! We lived in a house trailer in a mobile home park to start, learn to make more money!!!!!!!!!!! you can do it!!!! As you make more money nothing wrong with upgrading your house for your family.
I was a natural caretaker and at times in my life, I lived Free with Relatives and took care of them in lieu of rent. I sometimes had the master bedroom because they could not do that tub anymore and had to use a room with a walk in shower. I wiped a lot of hiney of course but I worked in caretaking fields anyway. I still worked other jobs and stuck all my extra pay away for later. Of course, I'm not young any more and I'm the one who may need someone to move in with me and take care of me sooner rather than later. Too bad I am not sure people are as trustworthy as I was back when I did it.
is the 25% rule just on the mortgage? so im about to buy a house and the mortgage is going to be 20% but with tax, insurance, and HOA, and utilities it jumps up to almost 35%. which number do I go off of?
Don't include utilities, but include tax, insurance, and HOA. Typically, those will all be rolled together as your "mortgage" payment.
Great Dave now do a topic on how many/much kids you can afford -_-
Lol there are lots of people that are kid poor more so than house poor 😂
Yea he doesn't answer that...he believes that's a discussion with God
True. My healthcare premiums almost doubled when I had a kid (recently) and now my wife is banking 8% of our take home into a college fund. Haven't even started childcare yet. Unreal!
@@jasonharris765 right, people call in like "I'm 100million dollars in debt and my wife wants 20 kids" & Dave would be like "why not have 21 kids they don't cost anything"
Kids are cheap, it’s the wife/mother nesting that’s the problem.
Dave Ramsey's insights have been a game-changer for me! His practical approach to financial management has empowered me to take control of my money and work towards a debt-free life. The Total Money Makeover is my go-to guide, and I appreciate how he breaks down complex concepts into easy-to-follow steps
25% is comical. Good luck! Here in the northeast, if you want shelter over your head and aren't making 180k you're looking at 80% of take home going to these nonsense mortgages.
When he says 25% Of your monthly take home is he also considering your tithing and your investments for retirement? Are the utilities also included in that
Journey with Cerney- Stock Videos I would assume so, yes. The 10% for your tithe & 25% for the home are taken out of what you get after taxes. If you use a 401k, that percentage would be before taxes obviously. No, utilities don't count in the mortgage calculation.
Always remember property taxes. Even if you own your own free and clear, if you don't make your tax payment, you will eventually lose your home.
Can you do one on how much shack I can afford next?
Do not buy a house based on a dual income in this situation. Base it on his income. They are in their 30s. They will need to start their family relatively soon. When kids come around, she may want to stay home or they will be strattled with the extravagant cost of childcare for babies/toddlers. Don’t limit your options where you feel you can’t be with your babies if you want to because of the house you bought.
I just closed on a home.. 2.85 on a 30!..
When I had my apartment my rent was 1,010$ so when I was looking to buy a house my goal was for the monthly payment (escrowed) to be as much or less than my rent
Do 25% of the low point of where you are at, not the middle. That would be the safest bet and you can always sell and buy a bigger/better home down the line sometime.
This market it crazy . We can’t find anything we want for what we’re qualified for . I want to move up the ladder , not go down .
Most of us wud never own a house with this 25% math especially living in NY…
Wisdom Man!!!
When he says house payments should not be more than 25% does that include or not include escrow for property taxes and home owners insurance? Both of these are a part of my mortgage payment.
“The 25% rule is not magic” unless it’s the opposite and you only have 25% leftover after your house. Then you’ll magically become poor
Isn't the assumption that you are debt free and thus you should have more than 25% at that point?
I start with understanding what house do I need? Next, I'll look at what I can afford. If I can't afford what I need, stop. If I can afford more than I need, Hooray for me, but I really want to know why I'm going above my needs. Not start at the top just because.
That’s resale tough to do on the west coast.
I have lived in 3 houses from 34 to age 38. I sold my first house 350% more than I paid for it. I sold my second house for 150% more than I paid for it, and my current house is worth 250% more than I paid for it. Search Bank REO's, HUD, Foreclosures, and understand that you will look at 100 houses and make 25 offers for every 1 they say yes to. My 3 yeses allow my family of 4 to live way above our means, if we chose to, because we are not house poor.
I thought your entire shelter costs are supposed to be 25% of your income. Including all utilities, fire insurance, property taxes, and emergency funds for repairs as well as upkeep?
My understanding is mortgage/rent, insurance, and taxes. Your emergency fund and utilities are beyond the 25%.
I just want a paid off house. My husband wants to know what the rush is. I'm gazelle and he just looks at me. 😁
I have money in mutual funds now that is going to go towards a down payment within the next 1-2 years. I know it should be in something safe like HYSA but I hate to sell it before it recovers from the February drop. Should I pull it out now or wait till it gets back to where it was?
Well, that paid off handsomely for you if you left it there. May the Lord bless you in your journey.
I paid cash, so I could afford it. Even though the numbers said I couldn't by my income.
It's been cheaper owning a free and clear house for 16 years than it would have been to pay rent for less than half the square footage in an apartment.
The power of paying cash is huge.
My wife and I both work full time and we want to buy a house. First, we want to move where the housing market won't eat up our income and savings. While also getting jobs that roughly make us the same amount.
good luck if you want the big money you gotta pay.
Washington state you can get a 1900s house for about half a million but they also pay my wife 140k a year when she was making 60k being a nurse in the south. My pay went from $20hr to $40hr, so yes we might have to pay 700k for a good big modern 4bd house 2bth, but we make close to 250k a year so we should be able to afford it but what I plan to do is build and not buy. We can get a nice 4bd house without the Garage taking up half the house for close to 300k new and buy some utility land for around 50k-100k and stay in our budget.
My first house was 15% of my income.. 25% makes sense
Does anyone know any good videos/articles about saving up a down payment vs. “rolling your current home equity into the next one” or potentially a mix of both? My husband and I have different ideas but I’m not well versed on the “rolling equity” method.
A lot of people rolled their equity into a new home, including Dave. He went bankrupt because of it. He talks about that all the time. Best is to not over leverage
D D so it’s acceptable, just don’t overdo it? This area is not my forte. My husband bought our current place a year before we married and I wasn’t really involved!
@@notclaire612 look over Richard Fain's videos
@@David.D3 that's not why he went bankrupt, it was the types of loans he was doing and tax code changes. Had he been using 30 year mortgages he likely would have been fine.
Bank gave me approval letter for 1mil to buy a house in Texas this year. What a joke. They will approve you to get into debt till you cant breathe but that doesn’t mean you should.
Also take your time when buying a house. Though our payment is just 2k and little over the rent we were paying for the apartment but I still feel I bought bigger house than we really need. This is our first house and I can tell you that emotions can really do a number on your buying decision. Good thing is that it is 1/4 of my take home pay.
Just get a 50 year mortgage for a house worth 10 times your income, I'm sure it'll be fine :P (they're actually doing that in California though)
Thanks for sharing this.
If you think thay you may be living somewhere else in five years, don't buy a house.
You can just sell it
@@stephcurry9524 Is it always easy to sell?