Costly living

[spence]

Originally Posted by The Dad Fisherman

Yep. Which I could have been clearer on. So probably closer to $18-$19 gross.

Someone is laboring under the delusion you need to make $208,000 a year to afford it, or that for some reason people working at Micky-D's are entitled to a half million dollar home.

Close to it, I think I applied the 30% after tax which raised it a bit.

480,000 principal + PMI @5% (likely much higher for a first loan) @30 years = 2577/month

10k average real estate taxes + 2k average property insurance = 12k

Monthly payment = 3,670

30% threshold = x*.30 = 3670 = 12,233/month gross

146,796/yr / 2000 hrs = 73.4 an hour gross wage.

Which is likely low as I don't think a first time home buyer with that size of a loan is even going to get 5%, so the answer is likely over 80/hr.

[Rmarsh]

The idea of a first time home buyer purchasing a $480,000 home with little or no down payment is just plain stupid. They should be looking at an older existing home at half that price.

Anyone planning to buy a home should be saving every dollar they can towards their downpayment. You dont just decide you want it and must have it......you have to save and sacrifice......and not expect it to be laid at your feet because you deserve it.

We are building new homes right now, with all the amenities, in the high 300's, and they are selling faster than we can build them. So thats $100,000 less than the example given.

[Jenn]

Originally Posted by spence

Close to it, I think I applied the 30% after tax which raised it a bit.

480,000 principal + PMI @5% (likely much higher for a first loan) @30 years = 2577/month

10k average real estate taxes + 2k average property insurance = 12k

Monthly payment = 3,670

30% threshold = x*.30 = 3670 = 12,233/month gross

146,796/yr / 2000 hrs = 73.4 an hour gross wage.

Which is likely low as I don't think a first time home buyer with that size of a loan is even going to get 5%, so the answer is likely over 80/hr.

I admittedly edited my entire grumpy old fart post.....So let's start over ....if the old rule of thumb is 30% of your income is what you can afford for mortgage it means if you make $100K a year that would equal a $$2500 a month mortgage which to me at least seems a little high since a third goes to taxes and a third to pay everything else and live on. 16 years ago we were approved for a home loan twice what we knew we could comfortably afford or roughly $350K....glad we didnt do it. Many ended up in foreclosure, bankruptcy or both, never to own the "dream".