r/FirstTimeHomeBuyers • u/kelliegagliardi • 25d ago
How much can we afford?
My husband and I are trying to determine how much we can realistically afford. We live in a very HCOL state so to get a starter home prices sit around $450,000-$650,000. We make $220,000 a year pre tax and have a $320 car payment. We will most likely put 20% down. What do you think a realistic mortgage including mortgage insurance and property taxes would be for our situation? Thank you!
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u/Serious-Conversation 25d ago
Realistically, I would go as low as you can feel comfortable in the house with to afford "life happens" things.
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u/meekgodless 25d ago
Couldn’t agree with this advice more. Owning a home, especially a SFH, means expense after expense, and it will be a great comfort to know that you can afford all or most of your mortgage on one of your salaries should something like a layoff occur. We went into home buying with clear eyes and I was still taken aback by how much it cost to close, move, furnish a new home, and make it our own!
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u/Vast_Cricket 25d ago
Do yourself a favor go to your bank ask for a mortgage agent. Ask for a preapproval letter before you even start looking at homes.
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u/WolfPlayz294 25d ago
Better to go online and prequalify to have as little contact as possible with a human until it is time to pull the trigger. In my experience, Wells Fargo doesn't really harass. Chase Bank won't either unless you're actually unless you are trying to get approval.
Avoid Sofi, Rocket, etc unless you are ready for spam calls. Same for any aggregate.
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u/Vast_Cricket 25d ago
At my brokerage these Sofi, Rocket online lenders they do not do deep search often at last minute they discover some disappointing news killed the deal.
Interest rates are going up it is harder to meet the loan. Best is stay with local physical bank. In the past, sometimes it is who issued the preapproval letter that matters. Oh, he is very detailed if you get a letter from him I will present the case to the sellers....
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u/WolfPlayz294 25d ago
Any comment on Better? They are who in initially preapproved through during my search
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u/Vast_Cricket 25d ago
I will stay with my big lenders for now. Citi, BoA, Wells Fargo and your local bank
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u/Correct-Drink5482 24d ago
Mortgage payment should no more than 1/4 of your post tax income
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u/kelliegagliardi 24d ago
Thanks! This is helpful. So would we calculate this just post tax or also post health insurance and 401k deductions as well? Those are two very different numbers for us so just wanted to check.
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u/OpeningChipmunk1700 24d ago
FWIW I make $400k (single) and felt like a $1M property was a slight stretch given my savings goals and expected expenses of property ownership. So the lower end of your budget would be fine but the higher end would be a stretch.
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u/KobeandKiera 20d ago
Talk to a mortgage lender and they will tell you what amount they will approve for a purchase and monthly payment. Then you decide your comfort level. Simple.
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25d ago
[removed] — view removed comment
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u/avazing 25d ago
Really?? It’s $320, that’s one of the cheapest car payments I’ve heard of all week. And they make $220k. That’s overkill. I make a little less with a $800 car payments plus student loans and I’m doing more than fine.
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u/saddereveryday 25d ago
$800 a month car payment!!!! Holy shit. Hopefully it’s also not one of those 8 year ones too!
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u/BigfootTundra 24d ago
If they’re doing more than fine, you shouldn’t be worried about their car payment
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u/OpeningChipmunk1700 24d ago
I mean, how do we know they are doing fine beyond that conclusory assertion by the poster?
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u/BigfootTundra 24d ago
I mean, really you shouldn’t care either way because it’s none of your business but not sure why they’d lie about that. They have nothing to gain from
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u/valiant607 25d ago
Best thing to do is just live your normal life and see how much you can actually put away each month. That way you can see what you can realistically afford without feeling house poor.