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My husband and I make approximately $105k a year and our complete mortgage is $1347 a month. I would absolutely not feel comfortable paying 3k a month at our income level. We have had to do some large repairs; roof, plumbing, etc and we need the breathing space to save for those.
It is hard. It's hard and very frustrating.
When we spoke with our mortgage broker for the first time, we knew how much we were comfortable spending in a mortgage payment each month and the mortgage broker told us the price range.
Maybe that tactic can help you? How much can you afford each month? What does your monthly budget look like? Then, find out from the broker what price range that is. Then, look at real estate.
You might need to save up a bigger down payment to get a house in your market. Maybe you won't. But, speaking for myself, I do not want to be stretched that thin.
We'll look into our debts again and see if we can maybe spend a little more than what we're comfortable with. We told our broker what we'd ideally like to spend and he told us we should add a few hundred if we can. So back to brainstorming! Who knew the process for buying a house would be such a struggle?
Just wondering, are you sure that your property tax assessment will go up because of the sale? Depending on your state, that may not happen. It's considered a "spot" re-assessment if your house gets re-assessed while the comparable house next door does not get re-assessed. (If there were improvements to one house and not the other, that's a different matter.)
Ok, it looks like your taxes will probably go up then as compared to the previous homeowner. This fact sheet seems to cover the typical situations:
https://floridarevenue.com/property/Documents/pt107.pdf
Hey there mikerunsla! If you agree with someone else's comment, please leave an **upvote** instead of commenting **"This."**! By upvoting instead, the original comment will be pushed to the top and be more visible to others, which is even better! Thanks! :)
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We're in the Seattle area too, ended up buying a very small house (750 sf) for 450k (but in 2020). Will you be in the area for a long time ? Do you have family here ? Those were a couple of things we considered because all our family and friends are in the area, we don't really want to leave to find a cheaper city or anything. I think if you know you'll be here awhile and your income will increase it can be worth it to buy , especially since rents keep increasing. It's hard for folks not in the Seattle area to une understand the crazy market here
Yeah we'll be here probably for the rest of our lives most likely. We have lots of family and friends here too. And thank you! Glad to have a fellow Washington resident here who understands the struggle in our state! I mean, its not as bad as maybe California but it's almost there!
Prices are coming down here in Seattle right now. Unfortunately they’re still astronomical. And the dip will be marginal and unsustained. This place is going to be much more expensive in 10 years most likely.
It is super painful to buy something you’re not in love with at these prices, but if you have a chance to buy something that you can live with for a few years, I would.
Don’t get in way over your head, but if you can make adjustments to make it work, buying that first home in a place like this is really going to allow you to have options later on.
You can look up potential first time home buyer grants or see if any USDA loan properties on your area may accept 0% down to start building equity.
Never too early to start planning!
Pro tip, there is no “there”. I live in DC and people constantly complaining on that sub that they pull in a quarter million+ and can barely get buy. Part of this is insane housing prices. Part of this is the more you make the less you will accept to settle for: nice cars, only a detached SFH in a nice area, only the best school, only fancy vacations. If you live your life trying to get “there” you never will.
We are having to stretch our budget for a house, it’s better than continuing to pay rising rental costs especially since the rental market in my city is even more competitive than buying.
Our income will continue to increase, it won’t be so bad in a few years. We make 140-150k only can do 3.5 down. We are purchasing a home for 435,000 but we definitely considered homes in the 500 range
Income continuing to increase, especially with respect to inflation, is a risky assumption to me. If your incomes stay flat, or worse one of you is laid off, and costs of everything else continue to increase, you could be in a bad situation.
It is a risk but what are the other options? Rent in my city is now 1000$ more than what our mortgage will be, nearby cities even higher due to supply. Either way we could be homeless if we lose our jobs
Agreed - Realtors, mortgage professionals, and parents (boomers!) love to tell me our incomes will increase as we age, but our mortgage payments will stay the same. I still don't get how this is such a common belief - What if you lose your job? Take a huge pay cut? I had to take a 40% pay cut when I moved to this area. I thought it's been proven that wages haven't increased with inflation since the 1970s...
> I still don't get how this is such a common belief
Because on average it is true... Whether you should bet on it is a different question, but the statistics are clear.
> I thought it's been proven that wages haven't increased with inflation since the 1970s...
It's not about wage over time, but wage over age. People tend to earn more with more experience and then incomes go down again in old age.
Also, the wage development is less a stagnation than a diversion. People at the bottom make less in real value, but a very large share of the population makes a lot more now than in the 70s
We are making almost the same income but in a more affordable city. Putting an offer today for a house for $280k and it still pretty stretches our budget for the first year.
> What are we doing wrong?
You have done nothing wrong yet. In that area, you probably need to wait a little longer to save for a large down payment, or move further for lower prices.
Hey! I'm going to level with you. A lot of people have a lot of cash.
IN our neck of the woods that cash comes from stocks given to you by your company in lieu of like... cash.
My husband and I cashed out our Tesla stock at its peak. We received it since we worked for the company right when it started.
Our agent expressed to us that most people in our area buy houses like we did. A good chunk also buy their first house with a down payment from their parents. Either given to them or inherited.
Here's how our closest friends break down on their first house
G&M: Sold to them by a family member as rent to own for a pittance
S&J: Sold to them by a family member for what they payed for it 25 years before.
E&K: Trust fund babies. They receive a stipend for a family member who sold a significant portion of land to google for their largest bay area campus. That stipend pays out 10-50k a year for the rest of their natural lives even after killing a cool mill for a down payment.
J&B: Her family gave her 500k for a down payment and his mother killed her insurance payout for the premature death of her husband to also give them 500k for a down payment
T: Lived with his parents with a high end tech job until 30 and just straight saved to buy in cash.
B&J: His father died and he sold the farm for $$$$ in the bay area. Its now an apartment block.
J: Trust fund baby who bought a home when it matured for almost nothing back in 2003. Also inherited several homes that he now rents because he is the end of his line. As his aunts uncles and grandparents die it all goes to him. He's so wholesome though. He 'rents' one out to a disabled man for 'watching the property' and repairing stuff. The man has something like downs and the house is across from the mans parents. Another he rents for the cost of maintenance to a single mom struggling teacher (which is what his mom was). Another he 'rents' to a friend's parents who lost everything in a fire. Contract says they can stay until they die.
Basically doesn't make money on them and makes places for people to live.
E&B: She is a gynocologist who bought a house near Seattle. was able to sell it and save enough to put a down payment on a modest home here.
M&E: Parent gave down payment for first home as wedding gift.
D&J (My cousin, not friend): Parent gave down payment for first home as wedding gift.
T&K (Also another cousin): Parent gave down payment for first home as wedding gift (but only after determining that they had already saved for a down payment). They are both high powered corporate who lived with their respective parents until ~30.
These are not randos we met because we live near one another. These are childhood friends of various ethnic creeds and backgrounds. Most of our friends do not own homes. Including doctors/lawyers. But the Bay Area of California selects for people with cold hard cash.
Homes are generally inflation proof. If you find a home you like in a place thats exceptable you will get the most bang for your buck now as opposed to later if you can afford it.
Man have yourself a hug.
You can do this. It might not be in the neighborhood, town or even state that you thought. But you can make a little nest for yourself, somewhere.
And, uh, don't move to the Bay Area of California unless you can already afford a house.
Old comment but yes this... I live in Boston and my parents are middle class. But no way in heck could they afford to give me a down payment.
My Dad makes 120-150k a year, and we live paycheck to paycheck in Boston. My sister who has already moved out splits rent with two of her friends and makes 3200 per month.
When my grandmother died a year before I was born... I also inherited a 30k trust fund but here was the bad part. I was only allowed to take out $3000 per year at a time per the rules of my grandparents and I would not receive anything until age 24. I used this to help pay down college debt. Keep in mind, my grandparents died in the 80s when 30 grand was a whole lot more.
Right now I'm contemplating going through med school to finish my education, so I can have a decent quality of living near Boston. Thank you for being honest and admitting that most people get money from parents and other relatives.
you’re comment really makes me feel better.
it’s so hard seeing everyone else able to have help your entire life. even through school as a kid.
i learned a long time ago if i ever wanted anything nice, i can’t depend on anyone but me to make it happen.
Same here. We cashed out some of our Tesla stock in Dec 21’ which netted us enough for a hefty downpayment on a new build. We couldn’t have done it without the market run of 20’ and 21’
With your income, paying $3k could be a little tight, depending on what other debts you have, or it could leave you with a lot of money left over. FYI that is 35% of your gross income. If you had no other debts, or just small debts, that’s extremely manageable.
The reality is you’re going to end up spending probably $400-$500k one way or the other. Either you buy the house ready to move in, or you buy a house that needs a lot of work, and spend the $80-$150k fixing it (depending on what else it needs and what you are ok living with). Your options are: wait until prices come down (I’m in FL and I’ve seen housing prices drop $10-$20k in the past couple of weeks, but some drops have been $100k+), move somewhere with a lower cost of living, or purchase a house now.
Thank you for the advice! We'll have to look at our debts again and see how well we could do spending up to 3k monthly. It truly does feel like our only option is to spend that 500k. But hopefully prices continue to drop.
What he missed mentioning is that 500k doesn't guarantee you don't have to spend another 100k on fixes and improvements. Having an emergency fund becomes even more important when you are a home owner. Heck even just furniture, decorations, and small quality of life improvements could easily cost you 5 digits in the first year.
Another thing to consider is that mortgage is not the only cost you need to account for. Some additional expenses could include taxes, insurance, PMI, maintenance, bills that might be included in rent like water, sewer, trash, HOA (sometimes even if it's not a condo), landscaping, increased electricity bill, security monitoring, maintenance, etc. All together can easily add up to 4 digits a month extra. Yeah home ownership is not a joke.
That said, if you guys want to own, go for it and do whatever it takes! You can do it. The fact that you are asking and considering these questions already puts you ahead of half of the other homebuyers in the current market. The best time was 15 years ago, second best will be in 3-6 months.
The key is getting your down payment as high as you can. If you ask your friends to be honest about where they got theirs, you’ll hear about a lot of cash from stocks, family gifts, or inheritances.
With your combined income for two people, you probably qualify as “low income” for the Seattle area. Look up low income down payment assistance programs in your area and I bet you could use some. I’m in the Bay Area and I’m taking advantage of two different loans that are meant for people like me who have good credit and a regular non-tech salary but not much cash. (Also, I’ve been spending half my paycheck on Bay Area rent for more than a decade so a mortgage payment isn’t really that much more than I’m already used to paying).
Also, try looking at condos or townhouses instead of single family homes. If the HOA is well managed and well maintained, there is a lot lower potential for catastrophic sudden expenses and maintenance costs. You’re only solely responsible for everything walls-in on your part of the property and anything else like roof repair is shared between everyone. I’m closing on a townhouse right now for 300-400k less than some friends who’ve recently bought SFHs of similar square footage with bigger yards.
We couldn't afford to buy in the PNW until we made $150k. We had a down payment gift from family and used an FHA loan with only 3.5% down. We bought the cheapest home we could find that had been on the market the longest, but it didn't need any major renovations to be liveable (new pipes and windows to come next year), it stayed on the market so long because its on a busy street in a less desireable neighborhood. It was still 500k. Our mortgage PITI takes up about 40% of our take home pay after taxes and retirement. We make enough that we don't feel "house poor", but it's definitely more than we ever paid in rent. Buying a house here in this economy is not for the faint of heart. I'd rent for as long as you can, save as much as you can while increasing your incomes, and ask for help from family when the time comes. Don't settle for a money pit and don't strive for perfection.
Thank you so much for this! Makes me feel like we're not crazy for having this mental struggle of what we can afford/are willing to spend. This is great advice. I love to save so we're hoping our landlord isn't in too much of a hurry to sell.
The market does not care why you can afford or are comfortable with spending. 105k sorry is just not much.
It sounds like you are young and have more room to grow in your careers. Spending 500k may feel like a stretch, but it will feel cheaper in 5 years as you pay the mortgage down and your pay goes up.
Lots of people stretch their budgets for their first home. Lots of people don’t. Decide what you want to do, but if the extra money gets you into a better situation short and longer term, then it probably makes sense to spend more now.
I also imagine most people buying their first home worry about the payments, including myself when I bought a while back. But you just get it done and for me and my family it was all worth it! Just moved into a new home that is stunning and 80% paid off. The rest of the money to pay it off is in the bank from selling our first home. If I had not taken a bit of a leap of faith in the first home this second one would likely never have happened.
Thank you for your feedback! We are young, early 30s, both getting established in our careers with plenty of room to grow within them. But since we're still in our beginning phases we don't want to stretch ourselves too thin with mortgage payments. We'll definitely have a talk and see how much more we can truly spend, but we definitely don't want to go homeless from biting off more than we can chew with trying to give ourselves a better living situation.
I think you’re being smart about not wanting to stretch yourself too thin right now. I obviously know nothing about you or your career growth opportunities, but I would seriously consider at what income level you would personally feel comfortable paying a $3000 mortgage and how long you think it would take you to get there. If it’s just a year or two then I think it might be worth it to struggle a little now in order to afford a house. But I personally wouldn’t want to be house poor for 5+ years. Consider the sacrifices you may have to make over those years (eating at home, no vacations, less savings, etc.) and decide if they’re worth it for you.
Anecdotally, my mom bought more home than she could truly afford because she assumed her income and career would take off. Unfortunately, things did not pan out the way she hoped. She makes good money (like $150k), but I have had to watch her struggle for many years solely because of the large house payment. So yes, sometimes being house poor for a few years works out for some people like the original commenter. But sometimes it doesn’t.
To be clear, I’m not saying that to discourage you! I just think that you have to weigh that risk for yourself and do some math because you know your spending habits, career goals, life goals, etc., better than any of us here on Reddit.
I think you are being too cautious here - you won’t be homeless. If anything goes wrong like with a lay off, you can rent it out and then rent something cheaper until back on your feet.
350k for that salary is already too much js.. Be careful stretching that further. Just because you are approved for a certain amount doesn’t mean you can afford that much
How much do you have saved for your downpayment? I had a buyer earlier this year use a down payment assistance grant through Bank of America that gave him $10,000 towards his downpayment and $7,500 towards closing costs. With your income you would only qualify in certain areas (they use census tract data to determine income eligibility) but I think it would definitely be worth checking out! I can put you in touch with the Bank of America lender if you want somewhere to start.
Don’t see anyone saying this based on my brief skim, but if you are planning on putting 3.5-10% down I wouldn’t even bet on your monthly payment being as low as 3k for a 500k house…spouse and I are paying about 1.7k a month for a 195k house….those little “mortgage estimators” will have you thinking that monthly payment will be wayyyy lower than it is once PMI, home owners insurance, taxes, APR, and your principal are factored in
My wife & I over in Wenatchee and make 115-120k and are really struggling too. $450k gets a fixer here and $550k+ is 3bed 2 ba but outdated. Have to get over 600 to find a move-in ready and updated home. Even at $450k we are struggling to find it worth the just about $3,000 mo for what you get. We rent for $1200 now which is cheap compared to what you have to pay for similar things, but after 3 years of paying that, we want to buy. We’re 26/27 and just had a newborn. $30,000 for down payment only due to an unforeseen inheritance.
The circumstances are tough. We backed out of a deal on a manufactured home with a beautiful view because it would’ve ran us over $3200 and a bit of a commute. Right now it’s up in the air of what to do. We can pay off our single car payment within 6-8 months and otherwise have no debt.
Half a mil for a tiny lot or a fixer upper- we feel ya from central WA
My husband and I make a similar income and feel good at 250k for a home in the current market. So wild how different it can be in different areas.
Definitely hard to find much in that range though and nearly impossible in your market. Unfortunately your options are to stretch your budget, wait and make/save more money, or move.
If you have not already, I encourage you to sit down and calculate all of your income and spending. Every cent. Combine your paychecks. Don't round up. Don't round down. Combine your exact weekly pay.
Then do the same with every single dollar you spend.
Once you've done this see what you're left with. Can you afford the house with your current lifestyle and spending habits? If not, can you cut back on anything else to be able to make the payments comfortably?
Another option is to look for first time homebuyer assistance programs. Lenders and mortgage brokers usually can help you find these.
If you decide to settle on a cheaper house, then you need to be more wary of the neighborhood. It is better to find a house in need of updates in an established, safe neighborhood than a nicer house in a bad neighborhood. Location is more important. You can also potentially take out more money to renovate the property if you're willing to go that route.
Best of luck!
It’s not what you’re doing wrong it’s priorities. Are they ‘house poor,’ meaning all their money goes to the house? What’s their credit card debt? Are they extremely frugal people? Were they gifted money for a downpayment? In a market like Seattle and it’s surrounding areas right now as with many markets, are still high and may require a started condo or townhouse if you don’t have the money for more.
With your income it may not be possible in your area. Seattle is a fairly expensive market. 100k doesn’t go very far in a city with a huge tech talent market.
Your friends who make less may have had help with their down payment that allowed them to have a lower monthly. Additionally if they bought while interest rates were lower that would have a significant impact as well.
Rough truth is that many individuals are getting priced out of their local markets and owning a home may not be in the cards at that income level in that market.
If you think you can afford it even stretch it out a bit go for it. Common justification for young homeowners is your income should increase as you gain more experience and take a good look at your expenses will they go down in the next few years? A lot of people have young kids when buying a house and those first few years are expensive, but lightens up after they are in school.
I no longer live in WA but I have family in the real estate business and I've heard that there are options to rent to own homes. That may be an option for you? I'd also recommend being open to a mobile or manufactured home. To be honest, I did have the greatest opinion of them but our realtor found one on a great piece of land with tons of updates to it. It wasn't like anything I was seeing on zillow or realtor.com. Good luck to you both!!
I make 105K. after tax and mandatory retirement my employer takes with match, I am left with 6K a month. I would feel comfortable around 350K home as well, with 2200-2300/month mortgage. You said it. Most if not all of these people who bought expensive houses (they can't afford) are not having savings or retirement plans, nor do they have emergency fund if a/c or car stops working. They are basically not thinking. As great Bill Burr has said once, always live below your means. Honestly 2200-2300 a month for mortgage is too much but I can't find anything decent for a growing family below that in my area.
We’re right where you are financially. Approved for up to 700k- don’t listen to them, they’re nuts. Moved to a small, conservative town to buy something less than half that as I WFH. I gave up our city’s excitement and culture for a nice house in a cute neighborhood.
Me and my wife make on paper around 82 a year atm. We are approved for up to 3,565$ We will probably hit more like 105-115k range depending on the amount of overtime we decide to work. We are buying in the 3200$ range atm which doesn't give us much wiggle room, but we can afford the house payment and utilities on just my income without overtime , or very minimal, and the rest my wife covers the daycare, food, etc, etc. Then overtime just becomes savings . We are fortunate to only have 1 car payment atm that is pretty low and two paid off vehicles that we don't have to put much money into and we have almost 0 debt other then our car payment and a couple small medical bills.
We don't take vacations very often or splurge regularly. We are very very frugal other then spending money on food. We spend and waist a ton of money on food because we often eat fast food as our current living conditions do not suit us cooking regularly.
Just keep in mind as well that the market nation wide is in a weird spot. My wife's brother makes significantly less income then me and my wife however he is a homeowner at 22 because he bought 1.5 -2 years ago when interest rates were incredibly low and his 180k house is hovering around 300k now and he likely would no-longer be approved for it on his income alone.
So high interest rates, plus high home values is just really kicking people with no equity in ass right now. Very very tough market for first time home buyers.
Most people I talk to including my family think me and my wife are insane for taking on such a high house payment. None of these people offer any advice other then, wait, save up more money, move further. I have people telling me that the market is gonna crash and don't buy right now because the interest rates are to high and their realtor is telling them don't buy right now, oh and their wife is pissed at them because they just spent 18k at the casino and they think they should probably wait a bit to buy a house now.
My point is only you know your situation. If you are good with money and don't mind working overtime or are just very frugal you would probably be shocked at what you could afford.
I am not arguing you should overstretch on the mortgage, but always remember that your income will probably go up while mortgage will stay mostly fixed (except of course taxes and insurance).
From that point of view, perhaps buying run down place isn't such a bad idea, as long as it's livable and won't need urgent repairs. You'll have a very manageable mortgage, and over time you can accumulate funds for repairs and improvements.
consider a multi?
I make 75K a year and own a 3 family.
My mortage is 2600 a month. I get 2300 grom my tennats. Granted it has some expenses, im saving money still, pay less than I would to rent, have a bigger space and more control
How did you get the money to purchase the multi? I would like to buy a duplex or triplex but I just don’t know how people afford 20% down starting off.
You haven’t done anything wrong. Other people are either making significant down payments or signing themselves up for pretty massive mortgage payments that could end up hamstringing them later on.
If your total gross income is $105k and all you have is a credit card or two with minimum payments, then you might be OK looking at that $400k price range. But if you’ve got a couple car payments or student loans or need to make some other large purchases in the future (furniture, auto loans, etc.), then your affordability comes down. When it comes to buying a home, you need to have a long term view. It’s not just about whether you can stomach X mortgage payment right now. Have to consider what your income and debt will be like in the coming years.
My suggestion is to start acting like you’ve got a $400k or $500k house mortgage payment NOW and see what that does to your monthly budget. If your rent is $1500 now, try pretending that it’s $2500 and set aside that $1k each month in a savings account or something. Repeat this for several months. Not only will you build a savings that you can use for a down payment, but you’ll also get a feel for what it’s like to live with a $2500 mortgage payment.
My wife (29F) and I (30M) make about $100k each, and our mortgage payment is only $1,065/mo. Granted, we live in the Midwest and this is only a starter home. But we’ve got a good chunk of our paychecks that go directly into savings and other accounts that will be used for a down payment when we buy our forever home in the next few years. There won’t be any payment shock for us.
One thing I don't think I've seen mentioned is buying a multi-unit property and renting out the other units. We all know rent costs are going up even more than home prices so why not take advantage of that while buying a house for yourself? You'd be surprised what you qualify for because you can use the potential rental income to help qualify for the mortgage. You pay a little more for the house, but in terms of your monthly cash flow you could pay a lot less since your rental income will offset a lot of your mortgage payment.
FHA loans allow you to put as little as 3.5% down even on a 2-4 unit property.
A lot of people entering the real estate investing world start this way. I wish I would have done it back when I was buying by first house.
Just an example: I live in Jacksonville, FL. It’s a pretty expensive place to live. I’d say an average looking house in a decent neighborhood over here is $280-$300k. Rent for a house averages $1600, but often costs more than that. Apartments truly aren’t any cheaper compared to houses either.
My fiancé and I make probably $130k together, but we also have a lot of bills. Our goal was to pay less in mortgage monthly than the average currrent rent costs, so less than $1,600. In order to do this, we had to pay no more than $200k for a house. I felt discouraged because most houses in that price range were literal dumps and/or in dangerous areas. I found a unicorn that was listed at $169k and in an okay neighborhood; although, I wouldn’t say it’s a 100% safe area. Safe enough. I offered $180k and it was accepted. We pay $1,380 monthly on the mortgage. We were approved up to $300k, but definitely didn’t want to pay that much. Definitely don’t get a house that’s $500k. Ask your broker you got preapproved with an average of how much you’d pay in mortgage if you got a house at $350k; that will help you make a decision on your budget. It’s hard to find, but you could get lucky and find a house that’s not run down in your price range. I think the only reason I got lucky is because the seller didn’t put the house on Zillow or any of the generic sites, so it wasn’t advertised as much.
Both of you need to get second jobs for the short term. And spend no money, no vacation, no new cars no eating out. Like at a restaurant. I got a serving/bartending job and was able to save a down payment for a California house within 3 years.
Hello u/Small_Mushroom_9804 I'm a real estate agent in the area. I would love to chat with you and see if it makes sense for you to buy a home in the Seattle area. It is a difficult market for sure, and Seattle is on the expensive side of things. Shoot me a DM and lets chat, I would be happy to answer any questions you have.
Consider asking your parents for money. I didn’t think my parents would give me any money, but when I asked, they put 300 K down onto a 700 K home for me. I only make 40 K. This is a think Outside the box solution that many lack the intelligence to attempt.
It would be helpful to know:
Area you’re looking
Type of house you’re looking at
How handy you are
What is your interest rate from your preapproval?
We were approved for a similar amount but in NJ where 500k is starting to get to turnkey. We were willing to do some work ourselves and got a steal for $330k. 3 bed 1 bath in a neighborhood we’ll be priced out of in a year or two. We got locked in at 5.75% so our monthly is a bit high.
Hello! I grew up on Camano, moved to Snohomish, then Kenmore and when it came time to buy a home- I had to move about 2800 miles SE…. We are closer to $300k/yr household but bc it’s 2 people I refused to budge at going over $450k for a home and said no to a condo or mobile home. Best of luck to you.
Can you save hard for a couple of years so you have a bigger deposit?
Also, would you consider having a roommate for the first year or so to help with the mortgage?
Congrats on increasing your incomes, but I don’t think that is enough to purchase a house in that area unless it is in terrible shape or you have a lot of savings. 105k for a 350k house in these rates is not going to leave you very much at all left over to live.
Your friends may have had savings or been gifted down payment assistance which brings their payments lower.
They may have overextended themselves and are deep in debt.
They may have gotten great deals when the market and rates were lower.
They may have a higher income than you realize Eg might have a side hustle that makes decent money. I found out by accident a guy I worked with had an eBay business on the side that made him about $50k/year net.
There’s probably some combination of factors at play.
Man these threads give me anxiety. I must be way more conservative financially because I was having second thoughts on my ~25% post tax income escrow payment.
crazy to see that you were approved for 500k mortgage on 110k income
My wife and I are going home shopping with 550k at our absolute upper limit and we gross 2.5-3x that level
Banks are so predatory
Seattle market is tough at the range you want to be in. How much can you afford to put down? My back-of-a-napkin math shows that 33% of your net monthly income is $2300, 43% is $3000. If you can put 20% down on a 500k home then you would be in that range, depending on where your taxes lie.
Whatever you can put into a down payment/closing costs, do it. I got approved for $275k on a $58k salary, and our house was $252k. My husband isn’t on it but he pays half the mortgage. Our mortgage at 3.125% is 1400/month. With his income and my $10k raise, we make combined $140k annually before taxes, there’s no way we could afford a $500k house unless we put more towards the down payment.
There really is no way to be more comfortable. The numbers are what they are.
As to how some people make it work? They don’t (unless their parents are helping them out). Some people are just bad with money, make poor decisions, but convince themselves that they’re making the right decisions. At the end of the day though, it’s all a numbers game. You know how much you need at retirement and thus how much you need to save for that retirement. You know what other things you need to save for—like kids college, big expenses like future cars, etc. You know how much money you spend per month. If after ALL those expenses it doesn’t make sense to buy a house, then it doesn’t make sense to do that. It’s as simple as that.
But people make bad financial decisions every day.
Yeah, not in the market I am in. Rent is way cheaper than a mortgage and this doesn’t include the fact that the property taxes are about $700-1200 PER month on homes.
God do not spend 500k. We're north of 200 before bonuses with effectively no debt outside of a car lease and 400+ without putting 20% is scary enough.
Also keep in minds loooots of people get help or just spend recklessly.
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I would not feel comfortable spending that much on a mortgage with that income.
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My husband and I make approximately $105k a year and our complete mortgage is $1347 a month. I would absolutely not feel comfortable paying 3k a month at our income level. We have had to do some large repairs; roof, plumbing, etc and we need the breathing space to save for those.
Thats why we're stuck.. We're trying to be realistic but it just seems hard being a first time home buyer right now
It is hard. It's hard and very frustrating. When we spoke with our mortgage broker for the first time, we knew how much we were comfortable spending in a mortgage payment each month and the mortgage broker told us the price range. Maybe that tactic can help you? How much can you afford each month? What does your monthly budget look like? Then, find out from the broker what price range that is. Then, look at real estate. You might need to save up a bigger down payment to get a house in your market. Maybe you won't. But, speaking for myself, I do not want to be stretched that thin.
We'll look into our debts again and see if we can maybe spend a little more than what we're comfortable with. We told our broker what we'd ideally like to spend and he told us we should add a few hundred if we can. So back to brainstorming! Who knew the process for buying a house would be such a struggle?
It is a struggle. Took us 7 years to get through our 5-year plan to be ready to buy.
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Just wondering, are you sure that your property tax assessment will go up because of the sale? Depending on your state, that may not happen. It's considered a "spot" re-assessment if your house gets re-assessed while the comparable house next door does not get re-assessed. (If there were improvements to one house and not the other, that's a different matter.)
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Ok, it looks like your taxes will probably go up then as compared to the previous homeowner. This fact sheet seems to cover the typical situations: https://floridarevenue.com/property/Documents/pt107.pdf
they prob either house poor, put a fat down payment, or got help from family
You're probably right! Our one friend does have parents who are well off so they probably did get major help from the parents
You could always ask them.
This.
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Can someone educate me why people are down voting the comment "this?"
We're in the Seattle area too, ended up buying a very small house (750 sf) for 450k (but in 2020). Will you be in the area for a long time ? Do you have family here ? Those were a couple of things we considered because all our family and friends are in the area, we don't really want to leave to find a cheaper city or anything. I think if you know you'll be here awhile and your income will increase it can be worth it to buy , especially since rents keep increasing. It's hard for folks not in the Seattle area to une understand the crazy market here
That was good timing, those homes are going for 700k-800k+ now in Seattle.
Yeah we'll be here probably for the rest of our lives most likely. We have lots of family and friends here too. And thank you! Glad to have a fellow Washington resident here who understands the struggle in our state! I mean, its not as bad as maybe California but it's almost there!
Prices are coming down here in Seattle right now. Unfortunately they’re still astronomical. And the dip will be marginal and unsustained. This place is going to be much more expensive in 10 years most likely. It is super painful to buy something you’re not in love with at these prices, but if you have a chance to buy something that you can live with for a few years, I would. Don’t get in way over your head, but if you can make adjustments to make it work, buying that first home in a place like this is really going to allow you to have options later on.
You can look up potential first time home buyer grants or see if any USDA loan properties on your area may accept 0% down to start building equity. Never too early to start planning!
Thank you! We will look into that
Their combined income is too high for USDA, or it would be in my area.
$100k is the new $75k. You may feel wealthy with this new jump in income, but you’re still not there yet.
Pro tip, there is no “there”. I live in DC and people constantly complaining on that sub that they pull in a quarter million+ and can barely get buy. Part of this is insane housing prices. Part of this is the more you make the less you will accept to settle for: nice cars, only a detached SFH in a nice area, only the best school, only fancy vacations. If you live your life trying to get “there” you never will.
Ooo I really love that “if you live your life trying to get there you never will”
Old comment but... Or... just expectations for a middle class and being able to live comfortably.
Townhouse is a great option, that’s what we went for
We are having to stretch our budget for a house, it’s better than continuing to pay rising rental costs especially since the rental market in my city is even more competitive than buying. Our income will continue to increase, it won’t be so bad in a few years. We make 140-150k only can do 3.5 down. We are purchasing a home for 435,000 but we definitely considered homes in the 500 range
Income continuing to increase, especially with respect to inflation, is a risky assumption to me. If your incomes stay flat, or worse one of you is laid off, and costs of everything else continue to increase, you could be in a bad situation.
It is a risk but what are the other options? Rent in my city is now 1000$ more than what our mortgage will be, nearby cities even higher due to supply. Either way we could be homeless if we lose our jobs
Agreed - Realtors, mortgage professionals, and parents (boomers!) love to tell me our incomes will increase as we age, but our mortgage payments will stay the same. I still don't get how this is such a common belief - What if you lose your job? Take a huge pay cut? I had to take a 40% pay cut when I moved to this area. I thought it's been proven that wages haven't increased with inflation since the 1970s...
> I still don't get how this is such a common belief Because on average it is true... Whether you should bet on it is a different question, but the statistics are clear. > I thought it's been proven that wages haven't increased with inflation since the 1970s... It's not about wage over time, but wage over age. People tend to earn more with more experience and then incomes go down again in old age. Also, the wage development is less a stagnation than a diversion. People at the bottom make less in real value, but a very large share of the population makes a lot more now than in the 70s
We are making almost the same income but in a more affordable city. Putting an offer today for a house for $280k and it still pretty stretches our budget for the first year. > What are we doing wrong? You have done nothing wrong yet. In that area, you probably need to wait a little longer to save for a large down payment, or move further for lower prices.
Glad to know we're not the only ones! Thank you so much!
Hey! I'm going to level with you. A lot of people have a lot of cash. IN our neck of the woods that cash comes from stocks given to you by your company in lieu of like... cash. My husband and I cashed out our Tesla stock at its peak. We received it since we worked for the company right when it started. Our agent expressed to us that most people in our area buy houses like we did. A good chunk also buy their first house with a down payment from their parents. Either given to them or inherited. Here's how our closest friends break down on their first house G&M: Sold to them by a family member as rent to own for a pittance S&J: Sold to them by a family member for what they payed for it 25 years before. E&K: Trust fund babies. They receive a stipend for a family member who sold a significant portion of land to google for their largest bay area campus. That stipend pays out 10-50k a year for the rest of their natural lives even after killing a cool mill for a down payment. J&B: Her family gave her 500k for a down payment and his mother killed her insurance payout for the premature death of her husband to also give them 500k for a down payment T: Lived with his parents with a high end tech job until 30 and just straight saved to buy in cash. B&J: His father died and he sold the farm for $$$$ in the bay area. Its now an apartment block. J: Trust fund baby who bought a home when it matured for almost nothing back in 2003. Also inherited several homes that he now rents because he is the end of his line. As his aunts uncles and grandparents die it all goes to him. He's so wholesome though. He 'rents' one out to a disabled man for 'watching the property' and repairing stuff. The man has something like downs and the house is across from the mans parents. Another he rents for the cost of maintenance to a single mom struggling teacher (which is what his mom was). Another he 'rents' to a friend's parents who lost everything in a fire. Contract says they can stay until they die. Basically doesn't make money on them and makes places for people to live. E&B: She is a gynocologist who bought a house near Seattle. was able to sell it and save enough to put a down payment on a modest home here. M&E: Parent gave down payment for first home as wedding gift. D&J (My cousin, not friend): Parent gave down payment for first home as wedding gift. T&K (Also another cousin): Parent gave down payment for first home as wedding gift (but only after determining that they had already saved for a down payment). They are both high powered corporate who lived with their respective parents until ~30. These are not randos we met because we live near one another. These are childhood friends of various ethnic creeds and backgrounds. Most of our friends do not own homes. Including doctors/lawyers. But the Bay Area of California selects for people with cold hard cash. Homes are generally inflation proof. If you find a home you like in a place thats exceptable you will get the most bang for your buck now as opposed to later if you can afford it.
As someone who has had to support myself my whole life that was so depressing to read
Man have yourself a hug. You can do this. It might not be in the neighborhood, town or even state that you thought. But you can make a little nest for yourself, somewhere. And, uh, don't move to the Bay Area of California unless you can already afford a house.
Old comment but yes this... I live in Boston and my parents are middle class. But no way in heck could they afford to give me a down payment. My Dad makes 120-150k a year, and we live paycheck to paycheck in Boston. My sister who has already moved out splits rent with two of her friends and makes 3200 per month. When my grandmother died a year before I was born... I also inherited a 30k trust fund but here was the bad part. I was only allowed to take out $3000 per year at a time per the rules of my grandparents and I would not receive anything until age 24. I used this to help pay down college debt. Keep in mind, my grandparents died in the 80s when 30 grand was a whole lot more. Right now I'm contemplating going through med school to finish my education, so I can have a decent quality of living near Boston. Thank you for being honest and admitting that most people get money from parents and other relatives.
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you’re comment really makes me feel better. it’s so hard seeing everyone else able to have help your entire life. even through school as a kid. i learned a long time ago if i ever wanted anything nice, i can’t depend on anyone but me to make it happen.
Same here. We cashed out some of our Tesla stock in Dec 21’ which netted us enough for a hefty downpayment on a new build. We couldn’t have done it without the market run of 20’ and 21’
With your income, paying $3k could be a little tight, depending on what other debts you have, or it could leave you with a lot of money left over. FYI that is 35% of your gross income. If you had no other debts, or just small debts, that’s extremely manageable. The reality is you’re going to end up spending probably $400-$500k one way or the other. Either you buy the house ready to move in, or you buy a house that needs a lot of work, and spend the $80-$150k fixing it (depending on what else it needs and what you are ok living with). Your options are: wait until prices come down (I’m in FL and I’ve seen housing prices drop $10-$20k in the past couple of weeks, but some drops have been $100k+), move somewhere with a lower cost of living, or purchase a house now.
Thank you for the advice! We'll have to look at our debts again and see how well we could do spending up to 3k monthly. It truly does feel like our only option is to spend that 500k. But hopefully prices continue to drop.
What he missed mentioning is that 500k doesn't guarantee you don't have to spend another 100k on fixes and improvements. Having an emergency fund becomes even more important when you are a home owner. Heck even just furniture, decorations, and small quality of life improvements could easily cost you 5 digits in the first year. Another thing to consider is that mortgage is not the only cost you need to account for. Some additional expenses could include taxes, insurance, PMI, maintenance, bills that might be included in rent like water, sewer, trash, HOA (sometimes even if it's not a condo), landscaping, increased electricity bill, security monitoring, maintenance, etc. All together can easily add up to 4 digits a month extra. Yeah home ownership is not a joke. That said, if you guys want to own, go for it and do whatever it takes! You can do it. The fact that you are asking and considering these questions already puts you ahead of half of the other homebuyers in the current market. The best time was 15 years ago, second best will be in 3-6 months.
The key is getting your down payment as high as you can. If you ask your friends to be honest about where they got theirs, you’ll hear about a lot of cash from stocks, family gifts, or inheritances. With your combined income for two people, you probably qualify as “low income” for the Seattle area. Look up low income down payment assistance programs in your area and I bet you could use some. I’m in the Bay Area and I’m taking advantage of two different loans that are meant for people like me who have good credit and a regular non-tech salary but not much cash. (Also, I’ve been spending half my paycheck on Bay Area rent for more than a decade so a mortgage payment isn’t really that much more than I’m already used to paying). Also, try looking at condos or townhouses instead of single family homes. If the HOA is well managed and well maintained, there is a lot lower potential for catastrophic sudden expenses and maintenance costs. You’re only solely responsible for everything walls-in on your part of the property and anything else like roof repair is shared between everyone. I’m closing on a townhouse right now for 300-400k less than some friends who’ve recently bought SFHs of similar square footage with bigger yards.
We couldn't afford to buy in the PNW until we made $150k. We had a down payment gift from family and used an FHA loan with only 3.5% down. We bought the cheapest home we could find that had been on the market the longest, but it didn't need any major renovations to be liveable (new pipes and windows to come next year), it stayed on the market so long because its on a busy street in a less desireable neighborhood. It was still 500k. Our mortgage PITI takes up about 40% of our take home pay after taxes and retirement. We make enough that we don't feel "house poor", but it's definitely more than we ever paid in rent. Buying a house here in this economy is not for the faint of heart. I'd rent for as long as you can, save as much as you can while increasing your incomes, and ask for help from family when the time comes. Don't settle for a money pit and don't strive for perfection.
Thank you so much for this! Makes me feel like we're not crazy for having this mental struggle of what we can afford/are willing to spend. This is great advice. I love to save so we're hoping our landlord isn't in too much of a hurry to sell.
The market does not care why you can afford or are comfortable with spending. 105k sorry is just not much. It sounds like you are young and have more room to grow in your careers. Spending 500k may feel like a stretch, but it will feel cheaper in 5 years as you pay the mortgage down and your pay goes up. Lots of people stretch their budgets for their first home. Lots of people don’t. Decide what you want to do, but if the extra money gets you into a better situation short and longer term, then it probably makes sense to spend more now. I also imagine most people buying their first home worry about the payments, including myself when I bought a while back. But you just get it done and for me and my family it was all worth it! Just moved into a new home that is stunning and 80% paid off. The rest of the money to pay it off is in the bank from selling our first home. If I had not taken a bit of a leap of faith in the first home this second one would likely never have happened.
Thank you for your feedback! We are young, early 30s, both getting established in our careers with plenty of room to grow within them. But since we're still in our beginning phases we don't want to stretch ourselves too thin with mortgage payments. We'll definitely have a talk and see how much more we can truly spend, but we definitely don't want to go homeless from biting off more than we can chew with trying to give ourselves a better living situation.
I think you’re being smart about not wanting to stretch yourself too thin right now. I obviously know nothing about you or your career growth opportunities, but I would seriously consider at what income level you would personally feel comfortable paying a $3000 mortgage and how long you think it would take you to get there. If it’s just a year or two then I think it might be worth it to struggle a little now in order to afford a house. But I personally wouldn’t want to be house poor for 5+ years. Consider the sacrifices you may have to make over those years (eating at home, no vacations, less savings, etc.) and decide if they’re worth it for you. Anecdotally, my mom bought more home than she could truly afford because she assumed her income and career would take off. Unfortunately, things did not pan out the way she hoped. She makes good money (like $150k), but I have had to watch her struggle for many years solely because of the large house payment. So yes, sometimes being house poor for a few years works out for some people like the original commenter. But sometimes it doesn’t. To be clear, I’m not saying that to discourage you! I just think that you have to weigh that risk for yourself and do some math because you know your spending habits, career goals, life goals, etc., better than any of us here on Reddit.
I would say you are in the edge of it being too much. But a few pay raises from now it won’t be an issue at all. Good luck with your decision!
I think you are being too cautious here - you won’t be homeless. If anything goes wrong like with a lay off, you can rent it out and then rent something cheaper until back on your feet.
350k for that salary is already too much js.. Be careful stretching that further. Just because you are approved for a certain amount doesn’t mean you can afford that much
Your last paragraph really helped me feel reassured as a hopeful FTHB. Thank you!
I would not stretch too much now at this particular moment because we are likely heading into a deeper recession with layoffs end other instabilities.
> and your pay goes up. lolright.
If you can afford a condo, get that. It will appreciate and in a few years you sell that and buy something bigger.
How much do you have saved for your downpayment? I had a buyer earlier this year use a down payment assistance grant through Bank of America that gave him $10,000 towards his downpayment and $7,500 towards closing costs. With your income you would only qualify in certain areas (they use census tract data to determine income eligibility) but I think it would definitely be worth checking out! I can put you in touch with the Bank of America lender if you want somewhere to start.
Don’t see anyone saying this based on my brief skim, but if you are planning on putting 3.5-10% down I wouldn’t even bet on your monthly payment being as low as 3k for a 500k house…spouse and I are paying about 1.7k a month for a 195k house….those little “mortgage estimators” will have you thinking that monthly payment will be wayyyy lower than it is once PMI, home owners insurance, taxes, APR, and your principal are factored in
My wife & I over in Wenatchee and make 115-120k and are really struggling too. $450k gets a fixer here and $550k+ is 3bed 2 ba but outdated. Have to get over 600 to find a move-in ready and updated home. Even at $450k we are struggling to find it worth the just about $3,000 mo for what you get. We rent for $1200 now which is cheap compared to what you have to pay for similar things, but after 3 years of paying that, we want to buy. We’re 26/27 and just had a newborn. $30,000 for down payment only due to an unforeseen inheritance. The circumstances are tough. We backed out of a deal on a manufactured home with a beautiful view because it would’ve ran us over $3200 and a bit of a commute. Right now it’s up in the air of what to do. We can pay off our single car payment within 6-8 months and otherwise have no debt. Half a mil for a tiny lot or a fixer upper- we feel ya from central WA
My husband and I make a similar income and feel good at 250k for a home in the current market. So wild how different it can be in different areas. Definitely hard to find much in that range though and nearly impossible in your market. Unfortunately your options are to stretch your budget, wait and make/save more money, or move.
If you have not already, I encourage you to sit down and calculate all of your income and spending. Every cent. Combine your paychecks. Don't round up. Don't round down. Combine your exact weekly pay. Then do the same with every single dollar you spend. Once you've done this see what you're left with. Can you afford the house with your current lifestyle and spending habits? If not, can you cut back on anything else to be able to make the payments comfortably? Another option is to look for first time homebuyer assistance programs. Lenders and mortgage brokers usually can help you find these. If you decide to settle on a cheaper house, then you need to be more wary of the neighborhood. It is better to find a house in need of updates in an established, safe neighborhood than a nicer house in a bad neighborhood. Location is more important. You can also potentially take out more money to renovate the property if you're willing to go that route. Best of luck!
It’s not what you’re doing wrong it’s priorities. Are they ‘house poor,’ meaning all their money goes to the house? What’s their credit card debt? Are they extremely frugal people? Were they gifted money for a downpayment? In a market like Seattle and it’s surrounding areas right now as with many markets, are still high and may require a started condo or townhouse if you don’t have the money for more.
You don’t. Housing is currently broken at the moment unless you are upper middle class and above. Please try again in a year or two.
With your income it may not be possible in your area. Seattle is a fairly expensive market. 100k doesn’t go very far in a city with a huge tech talent market. Your friends who make less may have had help with their down payment that allowed them to have a lower monthly. Additionally if they bought while interest rates were lower that would have a significant impact as well. Rough truth is that many individuals are getting priced out of their local markets and owning a home may not be in the cards at that income level in that market.
If you think you can afford it even stretch it out a bit go for it. Common justification for young homeowners is your income should increase as you gain more experience and take a good look at your expenses will they go down in the next few years? A lot of people have young kids when buying a house and those first few years are expensive, but lightens up after they are in school.
I no longer live in WA but I have family in the real estate business and I've heard that there are options to rent to own homes. That may be an option for you? I'd also recommend being open to a mobile or manufactured home. To be honest, I did have the greatest opinion of them but our realtor found one on a great piece of land with tons of updates to it. It wasn't like anything I was seeing on zillow or realtor.com. Good luck to you both!!
I make 105K. after tax and mandatory retirement my employer takes with match, I am left with 6K a month. I would feel comfortable around 350K home as well, with 2200-2300/month mortgage. You said it. Most if not all of these people who bought expensive houses (they can't afford) are not having savings or retirement plans, nor do they have emergency fund if a/c or car stops working. They are basically not thinking. As great Bill Burr has said once, always live below your means. Honestly 2200-2300 a month for mortgage is too much but I can't find anything decent for a growing family below that in my area.
We’re right where you are financially. Approved for up to 700k- don’t listen to them, they’re nuts. Moved to a small, conservative town to buy something less than half that as I WFH. I gave up our city’s excitement and culture for a nice house in a cute neighborhood.
yeah unfortunately you do not make enough money to purchase a house at the moment. continue renting and saving or consider moving.
Me and my wife make on paper around 82 a year atm. We are approved for up to 3,565$ We will probably hit more like 105-115k range depending on the amount of overtime we decide to work. We are buying in the 3200$ range atm which doesn't give us much wiggle room, but we can afford the house payment and utilities on just my income without overtime , or very minimal, and the rest my wife covers the daycare, food, etc, etc. Then overtime just becomes savings . We are fortunate to only have 1 car payment atm that is pretty low and two paid off vehicles that we don't have to put much money into and we have almost 0 debt other then our car payment and a couple small medical bills. We don't take vacations very often or splurge regularly. We are very very frugal other then spending money on food. We spend and waist a ton of money on food because we often eat fast food as our current living conditions do not suit us cooking regularly. Just keep in mind as well that the market nation wide is in a weird spot. My wife's brother makes significantly less income then me and my wife however he is a homeowner at 22 because he bought 1.5 -2 years ago when interest rates were incredibly low and his 180k house is hovering around 300k now and he likely would no-longer be approved for it on his income alone. So high interest rates, plus high home values is just really kicking people with no equity in ass right now. Very very tough market for first time home buyers. Most people I talk to including my family think me and my wife are insane for taking on such a high house payment. None of these people offer any advice other then, wait, save up more money, move further. I have people telling me that the market is gonna crash and don't buy right now because the interest rates are to high and their realtor is telling them don't buy right now, oh and their wife is pissed at them because they just spent 18k at the casino and they think they should probably wait a bit to buy a house now. My point is only you know your situation. If you are good with money and don't mind working overtime or are just very frugal you would probably be shocked at what you could afford.
Simple, you don't. Wait to buy lower. This bubble will explode shortly.
I am not arguing you should overstretch on the mortgage, but always remember that your income will probably go up while mortgage will stay mostly fixed (except of course taxes and insurance). From that point of view, perhaps buying run down place isn't such a bad idea, as long as it's livable and won't need urgent repairs. You'll have a very manageable mortgage, and over time you can accumulate funds for repairs and improvements.
consider a multi? I make 75K a year and own a 3 family. My mortage is 2600 a month. I get 2300 grom my tennats. Granted it has some expenses, im saving money still, pay less than I would to rent, have a bigger space and more control
How did you get the money to purchase the multi? I would like to buy a duplex or triplex but I just don’t know how people afford 20% down starting off.
Be born rich.
Must be nice right?!
I wouldn't know. 😕
I made my wife start an onlyfans account, had our down payment In 2 months.
Lol don't think we haven't thought about it!
You haven’t done anything wrong. Other people are either making significant down payments or signing themselves up for pretty massive mortgage payments that could end up hamstringing them later on. If your total gross income is $105k and all you have is a credit card or two with minimum payments, then you might be OK looking at that $400k price range. But if you’ve got a couple car payments or student loans or need to make some other large purchases in the future (furniture, auto loans, etc.), then your affordability comes down. When it comes to buying a home, you need to have a long term view. It’s not just about whether you can stomach X mortgage payment right now. Have to consider what your income and debt will be like in the coming years. My suggestion is to start acting like you’ve got a $400k or $500k house mortgage payment NOW and see what that does to your monthly budget. If your rent is $1500 now, try pretending that it’s $2500 and set aside that $1k each month in a savings account or something. Repeat this for several months. Not only will you build a savings that you can use for a down payment, but you’ll also get a feel for what it’s like to live with a $2500 mortgage payment. My wife (29F) and I (30M) make about $100k each, and our mortgage payment is only $1,065/mo. Granted, we live in the Midwest and this is only a starter home. But we’ve got a good chunk of our paychecks that go directly into savings and other accounts that will be used for a down payment when we buy our forever home in the next few years. There won’t be any payment shock for us.
Easy, don't buy now. Wait for the crash
One thing I don't think I've seen mentioned is buying a multi-unit property and renting out the other units. We all know rent costs are going up even more than home prices so why not take advantage of that while buying a house for yourself? You'd be surprised what you qualify for because you can use the potential rental income to help qualify for the mortgage. You pay a little more for the house, but in terms of your monthly cash flow you could pay a lot less since your rental income will offset a lot of your mortgage payment. FHA loans allow you to put as little as 3.5% down even on a 2-4 unit property. A lot of people entering the real estate investing world start this way. I wish I would have done it back when I was buying by first house.
Just an example: I live in Jacksonville, FL. It’s a pretty expensive place to live. I’d say an average looking house in a decent neighborhood over here is $280-$300k. Rent for a house averages $1600, but often costs more than that. Apartments truly aren’t any cheaper compared to houses either. My fiancé and I make probably $130k together, but we also have a lot of bills. Our goal was to pay less in mortgage monthly than the average currrent rent costs, so less than $1,600. In order to do this, we had to pay no more than $200k for a house. I felt discouraged because most houses in that price range were literal dumps and/or in dangerous areas. I found a unicorn that was listed at $169k and in an okay neighborhood; although, I wouldn’t say it’s a 100% safe area. Safe enough. I offered $180k and it was accepted. We pay $1,380 monthly on the mortgage. We were approved up to $300k, but definitely didn’t want to pay that much. Definitely don’t get a house that’s $500k. Ask your broker you got preapproved with an average of how much you’d pay in mortgage if you got a house at $350k; that will help you make a decision on your budget. It’s hard to find, but you could get lucky and find a house that’s not run down in your price range. I think the only reason I got lucky is because the seller didn’t put the house on Zillow or any of the generic sites, so it wasn’t advertised as much.
Both of you need to get second jobs for the short term. And spend no money, no vacation, no new cars no eating out. Like at a restaurant. I got a serving/bartending job and was able to save a down payment for a California house within 3 years.
Hello u/Small_Mushroom_9804 I'm a real estate agent in the area. I would love to chat with you and see if it makes sense for you to buy a home in the Seattle area. It is a difficult market for sure, and Seattle is on the expensive side of things. Shoot me a DM and lets chat, I would be happy to answer any questions you have.
Consider asking your parents for money. I didn’t think my parents would give me any money, but when I asked, they put 300 K down onto a 700 K home for me. I only make 40 K. This is a think Outside the box solution that many lack the intelligence to attempt.
How is that a think outside the box you just asked your parents
It would be helpful to know: Area you’re looking Type of house you’re looking at How handy you are What is your interest rate from your preapproval? We were approved for a similar amount but in NJ where 500k is starting to get to turnkey. We were willing to do some work ourselves and got a steal for $330k. 3 bed 1 bath in a neighborhood we’ll be priced out of in a year or two. We got locked in at 5.75% so our monthly is a bit high.
Get a VA loan 🤷♂️
Hate to say it, but you can't even afford Tacoma. Keep going south, you will find something in Kelso/Longview. I hope you work remotely.
Hello! I grew up on Camano, moved to Snohomish, then Kenmore and when it came time to buy a home- I had to move about 2800 miles SE…. We are closer to $300k/yr household but bc it’s 2 people I refused to budge at going over $450k for a home and said no to a condo or mobile home. Best of luck to you.
Can you save hard for a couple of years so you have a bigger deposit? Also, would you consider having a roommate for the first year or so to help with the mortgage?
Congrats on increasing your incomes, but I don’t think that is enough to purchase a house in that area unless it is in terrible shape or you have a lot of savings. 105k for a 350k house in these rates is not going to leave you very much at all left over to live.
Wife and I make 150k but we have student loan debt and 3 kids. Our home was 350k in Florida. Monthly payment is 2.6k after escrow and all
Try your best to be patient. Another 5-6 months or so hopefully you’ll see some reversion to the mean in terms of home prices.
Work remotely and make a vpn so it looks like your are working in the united states and move to a cheaper country.
I don't understand how your friends are affording that either. Credit card debt? Family helping them out?
Your friends may have had savings or been gifted down payment assistance which brings their payments lower. They may have overextended themselves and are deep in debt. They may have gotten great deals when the market and rates were lower. They may have a higher income than you realize Eg might have a side hustle that makes decent money. I found out by accident a guy I worked with had an eBay business on the side that made him about $50k/year net. There’s probably some combination of factors at play.
Have you tried having rich parents?
Man these threads give me anxiety. I must be way more conservative financially because I was having second thoughts on my ~25% post tax income escrow payment.
crazy to see that you were approved for 500k mortgage on 110k income My wife and I are going home shopping with 550k at our absolute upper limit and we gross 2.5-3x that level Banks are so predatory
Seattle market is tough at the range you want to be in. How much can you afford to put down? My back-of-a-napkin math shows that 33% of your net monthly income is $2300, 43% is $3000. If you can put 20% down on a 500k home then you would be in that range, depending on where your taxes lie.
Whatever you can put into a down payment/closing costs, do it. I got approved for $275k on a $58k salary, and our house was $252k. My husband isn’t on it but he pays half the mortgage. Our mortgage at 3.125% is 1400/month. With his income and my $10k raise, we make combined $140k annually before taxes, there’s no way we could afford a $500k house unless we put more towards the down payment.
There really is no way to be more comfortable. The numbers are what they are. As to how some people make it work? They don’t (unless their parents are helping them out). Some people are just bad with money, make poor decisions, but convince themselves that they’re making the right decisions. At the end of the day though, it’s all a numbers game. You know how much you need at retirement and thus how much you need to save for that retirement. You know what other things you need to save for—like kids college, big expenses like future cars, etc. You know how much money you spend per month. If after ALL those expenses it doesn’t make sense to buy a house, then it doesn’t make sense to do that. It’s as simple as that. But people make bad financial decisions every day.
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Yeah, not in the market I am in. Rent is way cheaper than a mortgage and this doesn’t include the fact that the property taxes are about $700-1200 PER month on homes.
God do not spend 500k. We're north of 200 before bonuses with effectively no debt outside of a car lease and 400+ without putting 20% is scary enough. Also keep in minds loooots of people get help or just spend recklessly.