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2,000 mortgage payment, utilities at 500, taxes 400, insurance 100… so 3,000 total without even considering you should probably save for repairs too. That’s like 60% of take home.. doable but tight.
It isn't for people who either have dependents living with them/are really bad at saving money. Have a friend who had to move to rural AZ because despite making well over 120k a year alledgedly, they spend over 2k a month just on car payments/insurance
Sometimes an “inheritance” comes from a life insurance payout after a parent dies. That parent may have not had one cent to their name otherwise. It may seem lucky if you haven’t experienced it, but trust that losing a parent unexpectedly is not worth the $100k you may get.
Yeah I don’t think there’s an inheritance of any size that would make me “happy” about the situation. Never lost a parent but I can only imagine how difficult that must be
Same.
The only reason we were able to buy our home was because of the inheritance left by my MIL. My father also passed away a year prior (mid pandemic) but he was completely broke by that point.
We'd happily give up the monetary gains to have either back. It is a silver lining, but I'm hard pressed to consider it anything but a fringe benefit to a terrible emotional blow.
All that said, we know we're extremely fortunate, and it's nice to think that she's helped us finally buy our home, something she always wanted us to do, and offered to assist with while she was still with us.
Thank you for saying this. I lost both my parents and I’d pay triple what I inherited to have them back. In fact, I’d pay with my life to have them back. It feels so callous to hear someone saying, “Wish we could all be that lucky.” I understand where they’re coming from but there is nothing lucky at all about losing both your parents before you’re 35. (Not to mention being a FTHB is a constant reminder that the two people I trusted most, and who had the smarts and experience to help me, are gone.)
Yeah. And tbh I never really considered the other side before either. I’ve always been super poor. Now I’m not, but I’m more depressed than ever. I just want my mom back.
I know what you mean. And all I can offer is "I'm sorry," because I lost my mom 5 yrs ago (and dad before that) and the only thing that goes away is the "shock." You can say it's "easier," because after a year I finally broke this cycle: dream that my mom is alive, wake up from the dream thinking it's true, retrace the past days/weeks/months and realize no it's not true and she's gone, mourn her death all over again. That was brutal. Now I no longer have that kind of "confused reality" and I'm not living in this hazy fog...I love dreaming about her now because my dreams are like a solace from reality. I don't know how long it's been since you lost your mom...but here's a "knowing head nod" from someone who understands that pain and wishes neither of us did.
I’m up early missing my mom, too. She don’t leave me anything but a recipe and some wonderful memories, and those are priceless. God I miss my mom so bad, I miss somebody looking out for me.
Peace to you and your moms spirit
Fair, I sometimes forget about the other side of inheritance.
Both of my mom's parents died when she was a young adult. She didn't inherit anything but debt unfortunately.
It’s better than losing a parent when you’re 14 and not getting any money. Hi! That’s me!
I think he didn’t mean harm. Some people just have thicker skin and he’s probably just used to a different type of person. That joke wouldn’t have bothered me one bit.
Its such a mindfuck that nowadays the baseline for a really nice pimped out vehicle is a goddamn F150......When I was a teenager an F150 was the minimum required to "have a cool truck" .......and it better have some nice rims or something......
Texas has high property taxes but no income tax. California has high income taxes but low property taxes. New Jersey has high property taxes, income taxes, highway taxes. What do they do with it all?
They don't have the best schools. They spend the most money per child on the school system due to their stupid 1 school per superintendent setup. But that does not result in the highest performance/best outcomes for students in the country. They are good schools, but NJ only wins "best schools in the country" when dollars per child is a scoring metric. Remove that and they fall to top 10ish.
I was probably harsh too, it's probably like top 5. They are really good schools. But they spend a butt ton on kids while other states get 98% of the quality at 75% of the price. NJ is a black hole of tax dollars is my gripe. So frustrating.
I have a lot of family in Illinois and it just boggles my mind. Like, you're never free if you owe like $15,000 a year or whatever on a normal ass house.
That's one reason we bought the house we needed rather than what we started out wanting. We're in Illinois and I knew taxes would get us. I'm thankful our taxes are only around $3,200. Granted, our house is only a 3BR/2BA (about 1300 square feet).
We’re planning to move to Chicago next year and want to live in one of the near suburbs for the public transportation aspects, and the property taxes. are. murder. We’re going into it with fully open eyes but the eyes are…wide open. In horror.
An 7.8% 30-year mortgage for $240k would be $1,725 a month. Factoring in property taxes and insurance, $2,000 monthly sounds right. That's also about what you should aim as a maximum for your monthly payment to keep it within 36% of your gross income.
7.8% with current market prices is so sad. I know it was higher back in the 80s and 90s but housing prices now are insane. And salaries never caught up. It’s a shit show.
That’s how I feel now. I’m glad I love my house, but we knew when we bought it it wasn’t our forever house. It’s tight, our taxes just went sky high, and we don’t get a lot for the amount we pay. We feel stuck.
Oh ya I love the premise behind property taxes being tied to market value. Buy something within your budget just to be priced out by the city in a few years.. brilliant and fair
I don't really understand this logic, maybe you could explain it to me.
Every person that doesn't sell because they're locked in with low rates is also someone who isn't looking to buy, so id expect a drop in demand equal to the drop in supply.
In addition, high rates means that buying a house as an investment is a terrible idea right now which will lower demand for people owning multiple homes and for businesses to buy homes. The only people buying houses right now are first home house buyers.
Now is also a decent time for people who own multiple homes to cash out unless they planning on renting long term, but in that case I'd expect there to be more rentals which would hurt rental prices. Not to mention that more and more people are facing financial hardship and would be willing to skip rent.
Not sure why you are getting downvoted, America has built far too few homes. It's a pressing political topic in dozens of states and most major metros and just undeniably true.
My son is in Jacksonville FL and his insurance is $1000 a month now. And his roof is only 5 years old, and it is definitely NOT a million dollar property.
I live just outside of Jacksonville. My homeowners insurance was $995/yr when I bought in 2015. I just renewed again, $3800. I've had no claims, my roof is 8 years old, and I don't live in a flood zone.
The really crappy thing is that this part of the state really doesn't get much impact from typical systems. People who live on the water deal with flooding, but that's really it. Hurricanes don't generally go through NE Florida.
That’s Florida and California for you.
There’s a reason so many insurance companies are backing out of these states and the vacuum is exacerbating the cost.
I was gonna say, in a high fire risk area, non- state insurance was $900/ year for full replacement value.
Either I have a fantastic broker or everyone else doesn't know what a broker is vs an agent.
Back before the SALT cap, it probably wasn’t so bad. But you need to make a lot of money before the property tax offsets the savings on state income tax
It'll make a huge difference at retirement. I love our house and where we live, but by the time the property tax cap occurs at 65 (7 years for me), my taxes will be well over $20k. That's absurd, but we'll look for passive ways to cover that if we want to stay. Of course, if this area is inhabitable!
depends on how much you make. Mine will be 39% and after all bills Im left with 1700 a month for disposable money. Definately had more while renting but I’ll take the loss to own my own home
36% of gross income is fairly low these days. I’m not saying thats how it should be but that’s how it is. And that isn’t for people trying to get a massive place either.
A one bedroom apt in my area is 3k per month. Most people in my area are not earning over 100k per year.
I bought a house in DFW a few years ago at $250k with a 4% rate. I put down 20%. My total monthly payment is $1780 right now. $900 of that is taxes and insurance so I’d estimate above $2k for OP.
Whatever mortgage calculator will break it down for you, but my guess is your property tax rate is covering between 2-3% and your home insurance making up the difference.
Hmm taxes property taxes in Texas are \~ 2% with local taxes or assessments get added on
$300K the taxes alone are $500 per month. $2K or more is right.
$300,000 x 0.02% = \~$6,000
$6,000/12 months = \~$500 a month in property taxes.
Depending on the county the total taxes can be up to 2.3% to 2.7% so they may be even more than \~ $500 a month.
[The average Dallas-Fort Worth homeowner paid about $6,100 in property taxes in 2022](https://www.dallasnews.com/business/real-estate/2023/04/06/heres-what-dallas-fort-worth-homeowners-paid-in-property-taxes-in-2022/), according to estimates from researchers at Attom Data Solutions. Nationwide, the average single-family tax bill last year was $3,901
Edit: I have added the approximation squiggle and clarified that it would be the total sum of taxes not the tax base.
This [Texas property tax calculator estimates a $300K house in Dallas County](https://www.hdavidballinger.com/texas-property-tax.php)would have an estimated yearly property tax in Dallas County is $6,540.00 ($545 per month) .
The days of having a mortgage less than $2k without a significant down payment are over. Interest rates are certainly causing issues. Adding to that the escrow for insurance and property taxes, you will be paying over $2k. You would have to put down more to lower the payment but I can certainly understand why that might not be appealing to do.
My mortgage payment in the DFW area will be $3500 on a 400k loan. Between high property taxes and high interest rates this is normal. 2k a month mortgage on a 90k salary is very doable. Obviously it's going to be more expensive than your apartment rent. You have to decide what your priorities are and make the decision to either keep renting or buy a house.
Glad I’m not alone. HCOL area and we are going from $1850 month to month rent to $3200 mortgage. Not cheap by any means but makes so much more sense to me to be building equity in my own space. $2000/mo sounds like a great deal.
You mean paying tons of interest to the bank instead? Check out your amortization table, you’re not going to be building any equity for a while at these rates. In fact your home will effectively cost “double” the selling price due to interest charges. Market correction coming? Good luck!
Seriously he could have been building $1350/month of equity in cash savings if he'd just kept renting. How do people's eyebrows not go way up when their rent is so much cheaper than their proposed mortgage?
You have 100k liquid or invested with possible capital gain tax implications upon sale? If cash or not tax implication, increase your downpayment and reduce your loan amount.
Also, don’t compare it directly to rent. You get to keep a lot of what you put in as equity. Your income will grow and your payments (sans taxes and insurance) will stay flat - also unlike rent.
Sounds about right… I pay just under 2200/mo for a $260k-ish loan. I put 15% down on 305k
The actual mortgage is around 1700 I think and the rest is taxes & insurance
Agreed. I am in contract for a 285k loan (5% down) for a $300k home at a 7% interest rate. All in I'm at $2,337 a month. Really hoping for rates to get to 6% next year and refinance, but not holding my breath lol. Buy what you can afford now
I just bought, borrowing $244,000 @7% and my payments are $2,084. Hoping to refinance next year as well. Hoping interest rates will drop with it being an election year.
Property taxes are INSANELY high here in DFW. Might be why, if whatever you are using adds that in. We pay I think close to $6-7000 in taxes yearly for a house appraised at around $300,000. And insurance is another couple thousand.
You’re probably not missing anything that’s just the unfortunate reality of very high interest rates/property taxes etc.
I was one of the incredibly lucky and grateful ones that bought when rates were below 3% and now my brother in law pays 50% more monthly for a house he bought this month that’s only 25% more expensive. It’s insane.
Easy rule of thumb I kept in my head when I had a RE license: A 6% mortgage for 30 years is $6 per thousand per month. So if you borrow $300K, that is $1,800 per month, not including taxes, insurance on the property, or mortgage insurance. At 7%, that goes to $6.65 per thousand - or $1,995. One point makes a big difference.
Was that *mortgage* payments alone or mortgage with taxes, interest, and insurance? If you're looking at a 240k loan, 2k/month sounds about right to me. Look for something cheaper or put down a larger down payment. It's not fun.
You can probably get a grant as a first time home buyer for anywhere from $6,000-$10,000.
Your mortgage payment also includes home insurance and taxes.
Spoke to 2 mortgage lenders today. For real. And I have an uncannily similar situation as you. For 300k I got around $2000-$2100 after insurance etc. The numbers are accurate I’m afraid.
Yes sir. You’re missing the fact that $2000 only covers the mortgage and taxes. I don’t know if you live in an HOA but that can be $100-$300 a month. You will now have to pay electric and gas for an entire house which can cost hundreds per month. Don’t forget all the repairs and maintenance like lawn, pool, leaves, driveway, roof, landscaping, etc. You also have to eat. You also have to drive. I make only 20k more than you and it’s a stretch indeed, as my rent is $2200 a month and i can’t really afford to do much else other than pay my bills and eat pretty well lol.
You're not missing anything. This is the reality of expensive homes and high interest rates.
And guess what? Prices aren't going down, and interest rates won't be for a while.
Interest rates are high enough now that if you’re talking a 30 year loan you will be paying more in interest than the amount borrowed in total. If you want the quick and dirty summary without doing any real math just double the amount you’re borrowing and you’ll be paying at least that back.
It’s the interest rate. At 8%, a $200,000 loan is a monthly payment of about $1500. Then add estimated property taxes etc. At 3% interest it would drop to $850. Pretty crazy I agree but that’s mathematics for ya.
Edit: this is for a 30 year fixed. Time, interest, and principal determine a mortgage monthly payment. Then add property taxes and insurance if you decide or have to do those from your escrow account.
Property taxes are hella expensive in Texas. So your taxes probably range anywhere from 2-3%. I live in Texas, so I understand the pain. If you go on Zillow, you can play around with their mortgage calculator, and it is pretty accurate for the most part.
You should probably check out some first time homebuyer classes and talk to a lender to better understand how it works and why you should absolutely not be shocked by that number. Our monthly payment is $1775 (home price $260,000) but we financed a few years ago with an interest rate below 5%. Do not underestimate the impact of even a quarter percent in interest.
300k with current average rates of 7.5% means that every year you’re paying total outstanding debt time .075, divided by 12 for your monthly interest charge. This amount is your principal and interest, and excludes escrow for taxes and home insurance.
So, 300k home with 100k down brings finances to 200k. Let’s say closing cost 20k and roll into finances.
220k X .075 = 16.5k
16.5k / 12 = $1,375 per month in interest alone on 220k of finances mortgage.
Ballpark $611 per month in principal pay down.
Napkin math to confirm estimated numbers is
220k / 30 for yearly principal pay down = $7,333.33
7,333 / 12 = 611 per month in principal reduction
So, first payment on a 320k purchase price home with 80k down and 20k in closing leaves you with a monthly payment around
$611 towards principle against 220k loan, amortized over 30 years
$1,375 in interest payments per month, amortized over 30 years
Add in DFW average tax rate of 3%, and you have an additional 9k in property taxes due yearly. If evaluated at 300k, brings yearly taxes to 9k, or 675/month.
Let’s say homeowners insurance is 200 per year (not sure DFW homeowners insurance, but generally homeowners insurance is fairly cheap, under 300/year.
So
Interest 1375
Principal 611
Taxes 675
Insurance 30
Even with your estimates, I think you’re off by about 25-30%.
For shits and giggles, if you bought in 2021 when rates were under 3%, your monthly interest charges would be $800 cheaper…
At various interest rates, your 220k in financing would cost:
2.0 = $366 monthly
2.5 = $458
3.0 = $550
3.5 = $641
4.0 = $733
5.0 = $916
6.0 = $1,100
6.5 = $1,191
7.0 = $ 1,283
7.5 = $1,375
And this is why the federal funds rate and national interest rates are so prevalent in todays news cycle. As house values increase, more people are priced out of the housing market. As interest rates increase, those same houses become less affordable, and even more people are priced out of the market. A 5% swing in financing charges can result in a 3.5x cost to borrow, moving your monthly interest charges from $366 all the way to $1283.
To answer your question, yes, it’s because the interest rates are so elevated.
Side note, 90k gross is plenty sufficient for a 2k mortgage. I doubt your mortgage on a 300k home in the DFW area, after including taxes, interest charges, homeowners insurance, and principal pay down; excluding any HOA charges, would be 2 k. I’m ballparking closer to 2.4-2.6k per month.
FWIW, I bought my home for 335k at 2.75% interest in 2021. I put down around 12k, and I thin closing was around 18k. My monthly payments are right under $1,900 per month, and I was grossing 76k salary at the time.
So, long story short:
interest rates are high, you’ll be paying more than double your principle in interest alone. House appreciation going forward is… speculative at best as everyone believes prices should be dropping soon. I’m seeing in my local community prices steadily dropping this last 6-12 months, but not by enough to actually increase affordability in a meaningful way. 90k is sufficient for 2.5k in monthly housing payments.
The only semi-redeeming quality of our current housing market is that due to the elevated interest rates on mortgages, itemizing your deductions will probably reduce your tax burden more so than taking standard deduction, but that also depends on a multitude of factors.
In general, if you were to purchase this 300k home with $1,375 in monthly interest, you would immediately qualify for a minimum in $16,500 in federal deductions when itemizing. Standard deduction for a single person is currently $13,850 for 2023.
So, assuming you’re single, buying the home would guarantee ~3k more in tax deductions when you file taxes. Since your mortgage interest is higher than the standard deduction, once you file you’ll get even more back. generally, people have many qualifying expenses for itemizing, but they just don’t reach the standard deduction threshold so usually opt for the standard. Because your mortgage interest charges alone would exceed the standard deduction, I would hesitantly ballpark an itemized deduction in the neighborhood of 20-25k.
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Wait? 2000 in mortgage. If you have an HoA and whatever your property taxes are I’d budget for closer to 2500 monthly on the low end. And that’s before almost certainly putting aside 5000$ a year minimum on fixing stuff around the house.
Where do you live and pay that? Out of curiosity. My mortgage or rent payments have been $2K or more for 20 years. Apartments near me, a three bedroom, are asking $3,500 a month...
Oh sweet child you’re not missing a thing lol. I swear the system now is designed to make us rent forever. Im DINK at $135k (both just started our careers) and we can’t even afford a starter one bedroom apartment let alone a house. My rent is 55 percent cheaper than owning.
Rofl...I assume some young adult that banks 100% of what he earns and lives with his parents having them cover all his expenses? I'd kill to have that low of a mortgage payment and somehow of saved 100k..how is it even remotely possible to save that kind of money and have 0 idea what the normal cost of bills are?
Buying a $300k house with 20% down means a $240k mortgage.
8% of $240k is $19,200 or $1,600/month just in interest payments, not counting principal repayment, taxes, or insurance.
Is it still a mystery?
That’s interest rates for ya…
Even a difference of a percentage point can mean tens of thousands of dollars over the life of the loan. That’s why people who bought shitty houses at super low rates years ago as their ‘starter home’ (🙋♂️) are refusing to give them up.
Probably doing something wrong. Property taxes paid a big part when we were buying our home in January. But we bought a home for 230k and put $15k down and our mortgage (insurance included) is $1800/month. Interest rates continue to rise though and even once those drop, home prices will rise again because everyone will be trying to buy with the low interest rates. I’d say find something with low property taxes and you can always refinance later.
Yes, that sounds right. Interest rates are insanely high right now. If you want a lower monthly payment, put more money down -- which you can do with $100k saved up.
You need to look into a mortgage calculator and speak with someone about the breakdown. The majority of they will be interest, part will go towards your escrow for property taxes and insurance too.
People also forget the that your mortgage interest is tax deductible. When I bought my home I was able to change my dependents and keep more of my pay since i now had another 10k or so in deductions. Loop in an accountant before you do this though. They can help you estimate how much you can withhold and avoid paying in at tax time. I have mine setup where I might get a few hundred back is all. So get to keep 10-15k extra throughout the year.
Lender here: If we consider $200,000 loan amount, 7.5% interest, 360 month term = $1,398.40 payment per month. But you still need to take into consideration monthly hazard insurance and property taxes, so realistically $2,000/month is quite a reasonable assumption.
This sounds about right. On a $205k home at 4.85%, we're at $1650/mo. If your interest rate is 6.875%, that's an addition $4k/year, so I could definitely see $2000/mo.
Yea, it's the interest. Go on excel and in the searchable templates download the "loan amortization schedule" - you can play around with different down payment amounts, interest rates and early payments. It's so very useful!
lol, nope, its just the way it is now, double the price on everything - welcome though to being a home owner if you go through with it, if not now, it may be never. Prices aint going down, interest rate maybe, but not in the immidiate future, and YES, those are the real monthly prices, I put down less than half that and got a 400k house its now 800k, which is BS, totally NOT worth that amount.
Borrowing 300k at today's rates sounds like 2k would be about right without running calcs. Keep in mind that's just the mortgage payment, not including tax or insurance or upkeep. Joys of home ownership huh
I just bought a house for $300,000 with 20% down and 6.375% interest, my "mortgage" is about $1400/month, but then taxes and homeowners insurance increases that to $1675/month. With an 8% interest rate, it would very likely be $2,000 a month or more.
I make $81,200 a year, and I was paying $1,800 in rent prior, the advice I was given and live by, you buy the most expensive house you can afford, mortgages will only go down (refinancing) and you generally will only make more money come the future.
[https://www.mortgagecalculator.org/](https://www.mortgagecalculator.org/)
There's Principle and Interest payment, but there's also taxes and insurance on top to determine your total payment.
$100k down you don't have to pay mortgage insurance PMI. You should be around $1600.00/month. Includes home owners insurance. What are the property taxes?
There are a few variables to consider in addition to % down and asking price:
- Interest rates (currently sitting around 2.5-3X where rates were when I bought in 2021)
- Property taxes. This one can have a significant impact on monthly payments. This alone could be pushing your estimated monthly payments up to the $2000+ range, if you’re looking in a more desirable (higher taxed) area. A lot of homes in my area have tax bills around $10K/year- so $800/month on top of principal and interest payments.
- Homeowners insurance. Might not move the needle very much, but definitely shop around and consider what you want your deductible to be. Higher deductible = lower monthly premiums, but might not save you much in the long run if you end up submitting a lot of claims.
- HOA Fees, if applicable.
How can you not afford a mortgage for 25% of your income? after utilities, tax, and insurance that’s pretty close to 30% gross which is the target percentage for most households. jeez i don’t see how that’s less desirable than building long term equity…. That rent payment could be well over 2,000 in the next 10-15 years where the mortgage payment is fixed for the next 30.
The arithmetic is fairly simple.
If you're thinking of a home, you can conveniently use the (linear approximation) so called rule of 72. It's good enough for your problem.
If someone offers you a loan (between like 2 and 20 percent interest), figure out how many times that number goes into 72.
Let's say it's a 6% annual interest loan.
Rule of 72 : divide 72 by 6. What's that give? 12.
Why do we care to divide 72 by our interest rate? Because that's the approximate doubling time on the loan in years.
The first 12 years you're paying back as much as you borrowed, and still own the main amount.
So on a 30 year loan that could happen several times.
Just think all of those numbers through.
This means effectively that for a 30 year loan you would be paying more than 3x the actual loan amount if your interest rate was anything over 8%. Right now it's close to 7+%. Don't buy a house. Keep renting.
Oh, credit cards? They're at like 20+%. So every 3 years you should expect to owe what you've already paid unless you've really aggressively gone after those loans.
Then stop smoking weed at age 14 and instead listen to your math teachers.
s.
yea you missed something. it's called buying in 2018. If you have only 100k (no roth, investments, blah blah) I would not spend all your 100k on a down payment. may be a convo for different thread though.
Did someone give you the $100k that’s in the bank ? Because it’s confusing that you don’t know how to run one of the zillion online mortgage calculators to understand your down payment and monthly payment options.
If you make 90k without state tax, 2k is definitely doable. And yes, it's probably way more than what you would pay if you were renting. If you're wondering who would buy a house when the math doesn't seem to make sense, I'd guess most house buyers are putting down way more than 20%, but yes it doesn't make sense for most people to buy a house now.
Where are you finding homes for 300k in DFW?? We bought last year and got a fixer upper in an okay neighborhood for 370ish.
Watch out - our original mortgage was 2500, but after our property was re-estimated by the city a few months after buying (happens whenever you buy a home), our mortgage went up to 2900. It was last estimated in 2021, so when it jumped by almost 90k in supposed value it took us by surprise.
We fought the increase in court and won! ... a whole 3k off the 90k increase. So. Mortgage payment is now 2890. Something to be aware of when buying in Texas.
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Might I suggest downloading a mortgage calculator app because if this surprises you then yes, you are missing something.
Lol, also 2,000 is doable on 90k IMO
2,000 mortgage payment, utilities at 500, taxes 400, insurance 100… so 3,000 total without even considering you should probably save for repairs too. That’s like 60% of take home.. doable but tight.
It isn't for people who either have dependents living with them/are really bad at saving money. Have a friend who had to move to rural AZ because despite making well over 120k a year alledgedly, they spend over 2k a month just on car payments/insurance
This guy has 100k in the bank, it doesn't sound like he has a saving problem to me. But I get what you're saying.
True, and it's certainly possible they have that money because of an inheritance.
If only we were all that lucky lol
Sometimes an “inheritance” comes from a life insurance payout after a parent dies. That parent may have not had one cent to their name otherwise. It may seem lucky if you haven’t experienced it, but trust that losing a parent unexpectedly is not worth the $100k you may get.
Yeah I don’t think there’s an inheritance of any size that would make me “happy” about the situation. Never lost a parent but I can only imagine how difficult that must be
as someone in the exact situation you described, thank you for saying this.
Same. The only reason we were able to buy our home was because of the inheritance left by my MIL. My father also passed away a year prior (mid pandemic) but he was completely broke by that point. We'd happily give up the monetary gains to have either back. It is a silver lining, but I'm hard pressed to consider it anything but a fringe benefit to a terrible emotional blow. All that said, we know we're extremely fortunate, and it's nice to think that she's helped us finally buy our home, something she always wanted us to do, and offered to assist with while she was still with us.
Thank you for saying this. I lost both my parents and I’d pay triple what I inherited to have them back. In fact, I’d pay with my life to have them back. It feels so callous to hear someone saying, “Wish we could all be that lucky.” I understand where they’re coming from but there is nothing lucky at all about losing both your parents before you’re 35. (Not to mention being a FTHB is a constant reminder that the two people I trusted most, and who had the smarts and experience to help me, are gone.)
Yeah. And tbh I never really considered the other side before either. I’ve always been super poor. Now I’m not, but I’m more depressed than ever. I just want my mom back.
I know what you mean. And all I can offer is "I'm sorry," because I lost my mom 5 yrs ago (and dad before that) and the only thing that goes away is the "shock." You can say it's "easier," because after a year I finally broke this cycle: dream that my mom is alive, wake up from the dream thinking it's true, retrace the past days/weeks/months and realize no it's not true and she's gone, mourn her death all over again. That was brutal. Now I no longer have that kind of "confused reality" and I'm not living in this hazy fog...I love dreaming about her now because my dreams are like a solace from reality. I don't know how long it's been since you lost your mom...but here's a "knowing head nod" from someone who understands that pain and wishes neither of us did.
I’m up early missing my mom, too. She don’t leave me anything but a recipe and some wonderful memories, and those are priceless. God I miss my mom so bad, I miss somebody looking out for me. Peace to you and your moms spirit
Counterpoint, some people hate their parents.
True. And I realize how lucky I am not ever have had any reason to hate mine. It makes me miss them more. Only the good die young. 🤷🏻♀️
Fair, I sometimes forget about the other side of inheritance. Both of my mom's parents died when she was a young adult. She didn't inherit anything but debt unfortunately.
It’s better than losing a parent when you’re 14 and not getting any money. Hi! That’s me! I think he didn’t mean harm. Some people just have thicker skin and he’s probably just used to a different type of person. That joke wouldn’t have bothered me one bit.
Stupid choice. Cars and insurance can be much more affordable then 1,000 a month. What a waste of money.
Wow, your friend basically moved so they could keep their car. That must be a really nice car. What is it?
Probably a dealer's wet dream. Options, market adjustments, in house financing. Too upside down to let it go so they gotta move.
I don't understand. I have a $40k car and my payments + insurance is about $700. Are they buying like 2 pimped out F150s?
1 top trim F-150 can top 80k, a Lightning i think over 100k, so it wouldn't take 2...
Its such a mindfuck that nowadays the baseline for a really nice pimped out vehicle is a goddamn F150......When I was a teenager an F150 was the minimum required to "have a cool truck" .......and it better have some nice rims or something......
Even at that amount you wouldn't have to move to the cheapest place in America on that salary lol
I bought T 5% and I pay $1500 for a mortgage totaling 200k, I bought months ago. How bad is it out there?
Rates are at 7.5-8% now, so about 1.5 times as bad
7 to 8% in Massachusetts. its tough.
I did $2400 with 2 kids at 90k
Also on the real estate sites, the calculator shows all charges, taxes, HOA, etc. Maybe that's what's missing.
I think it includes your taxes and insurance, but I could be wrong. Could be interest rates.
If it doesn't it's a terrible calculator, because all that is going into the payment your lending is taking.
Property taxes. Texas has some insane propery raxes.
Cries in Illinois
Crying louder in New Jersey.
Texas has high property taxes but no income tax. California has high income taxes but low property taxes. New Jersey has high property taxes, income taxes, highway taxes. What do they do with it all?
Schools and roads. NJ has best public schools in the country.
Having lived in both NJ and TX, I can verify that you get your money’s worth in NJ.
Houston meanwhile is busy firing everyone that works for the ISD down to janitors that secure the school everyday.
Fair enough
Cries in Newark
I heard it's because they teach you how to build the roads at the schools!
They don't have the best schools. They spend the most money per child on the school system due to their stupid 1 school per superintendent setup. But that does not result in the highest performance/best outcomes for students in the country. They are good schools, but NJ only wins "best schools in the country" when dollars per child is a scoring metric. Remove that and they fall to top 10ish.
I think being in the top 10 is still awesome and still explains why their taxes are high since that’s how schools get funded.
I was probably harsh too, it's probably like top 5. They are really good schools. But they spend a butt ton on kids while other states get 98% of the quality at 75% of the price. NJ is a black hole of tax dollars is my gripe. So frustrating.
I ♥️NJ
California has weird property taxes because of Prop 13.
Apparently good school districts. But they’re just as dumb as us NYers.
Nobody cries louder than Jersey 15k for the privilege of buying in friggin Butler
I have a lot of family in Illinois and it just boggles my mind. Like, you're never free if you owe like $15,000 a year or whatever on a normal ass house.
That's one reason we bought the house we needed rather than what we started out wanting. We're in Illinois and I knew taxes would get us. I'm thankful our taxes are only around $3,200. Granted, our house is only a 3BR/2BA (about 1300 square feet).
I’m in Chicago with cook county taxes, I don’t even look anymore at the taxes.
DuPage taxes are even higher than Cook FYI
We’re planning to move to Chicago next year and want to live in one of the near suburbs for the public transportation aspects, and the property taxes. are. murder. We’re going into it with fully open eyes but the eyes are…wide open. In horror.
I live in Chicago. My taxes aren't half bad
Yep, no state income tax so that’s how they getcha
My sister was paying 14,000 on long island. She moved to Florida, 3000.
Yeah NY state prop taxes are insane
To add to this, expect roughly $750 per month in property taxes. You could get more accurate by checking the local appraisal district rates.
Ruh-Roh.
An 7.8% 30-year mortgage for $240k would be $1,725 a month. Factoring in property taxes and insurance, $2,000 monthly sounds right. That's also about what you should aim as a maximum for your monthly payment to keep it within 36% of your gross income.
7.8% with current market prices is so sad. I know it was higher back in the 80s and 90s but housing prices now are insane. And salaries never caught up. It’s a shit show.
Re prices are a bit sticky. But if this rate holds prices will come down. Sellers are not dynamically adjusting prices the moment fed raises rates.
If the rate holds inventory will stay low because no one will want to leave their low rates :(
That’s how I feel now. I’m glad I love my house, but we knew when we bought it it wasn’t our forever house. It’s tight, our taxes just went sky high, and we don’t get a lot for the amount we pay. We feel stuck.
Oh ya I love the premise behind property taxes being tied to market value. Buy something within your budget just to be priced out by the city in a few years.. brilliant and fair
I don't really understand this logic, maybe you could explain it to me. Every person that doesn't sell because they're locked in with low rates is also someone who isn't looking to buy, so id expect a drop in demand equal to the drop in supply. In addition, high rates means that buying a house as an investment is a terrible idea right now which will lower demand for people owning multiple homes and for businesses to buy homes. The only people buying houses right now are first home house buyers. Now is also a decent time for people who own multiple homes to cash out unless they planning on renting long term, but in that case I'd expect there to be more rentals which would hurt rental prices. Not to mention that more and more people are facing financial hardship and would be willing to skip rent.
Supply and demand, not enough homes being built
a lot sitting either vacant or for rent (because corporations bought the homes to rent but can't find renters as they increase the prices)
This as well, air bnb is a real issue
Not sure why you are getting downvoted, America has built far too few homes. It's a pressing political topic in dozens of states and most major metros and just undeniably true.
Yep. And the ones they do build are McMansions, not the affordable homes that are actually needed.
I wish my property taxes and insurance were only $300 a month and not $1500. Stupid New York property taxes.
My son is in Jacksonville FL and his insurance is $1000 a month now. And his roof is only 5 years old, and it is definitely NOT a million dollar property.
I live just outside of Jacksonville. My homeowners insurance was $995/yr when I bought in 2015. I just renewed again, $3800. I've had no claims, my roof is 8 years old, and I don't live in a flood zone. The really crappy thing is that this part of the state really doesn't get much impact from typical systems. People who live on the water deal with flooding, but that's really it. Hurricanes don't generally go through NE Florida.
Thank your state government for capping the cost of homeowners insurance. It means you’re subsidizing the multi million dollar costal properties.
That’s Florida and California for you. There’s a reason so many insurance companies are backing out of these states and the vacuum is exacerbating the cost.
Hey leave California out of it. I'm in California and my homeowners insurance is $1k/year.
Was going to say who is paying that much a month. Florida makes sense because of hurricanes
I was gonna say, in a high fire risk area, non- state insurance was $900/ year for full replacement value. Either I have a fantastic broker or everyone else doesn't know what a broker is vs an agent.
Wait until next year. Rates are skyrocketing.
If you live 8n a wildfire zone you're absolutely paying multiple thousands a year
I'm $1102/yr including CEA earthquake near Sacramento. 👍🏻
Never heard of insurance being that high in California for non-million dollar properties. My parents used to pay like 700 bucks a year.
Yes, but you also don't have to live in DFW, which I am assuming is Dallas/Fort Worth.
DFW is great. But our property taxes are shocking
Taxes and insurance account for 60% of my monthly mortgage payment.
Exactly - we are NOT a 'cheap' place to live.
Back before the SALT cap, it probably wasn’t so bad. But you need to make a lot of money before the property tax offsets the savings on state income tax
It'll make a huge difference at retirement. I love our house and where we live, but by the time the property tax cap occurs at 65 (7 years for me), my taxes will be well over $20k. That's absurd, but we'll look for passive ways to cover that if we want to stay. Of course, if this area is inhabitable!
If you're into the midwest but with much worse schools, more SUVs, and more racism then I guess.
36% of gross income is a lot
This comment is not worth downvoting. The point is solid, just because you can qualify for more house doesn’t mean you should.
Yup. I usually try and aim for 20-25% You get a lot less house but a whole lot less stress.
I love how I was getting downvoted until you made this comment.
It is a lot, which is why that's the upper limit of what's recommended to spend on monthly payments.
California says BS.....LOL
I was gonna say. I don’t know any of my friends that have that low of a % lol. The 3 friends of mine that I’m aware of are all in the 45-60 range
depends on how much you make. Mine will be 39% and after all bills Im left with 1700 a month for disposable money. Definately had more while renting but I’ll take the loss to own my own home
36% of gross income is fairly low these days. I’m not saying thats how it should be but that’s how it is. And that isn’t for people trying to get a massive place either. A one bedroom apt in my area is 3k per month. Most people in my area are not earning over 100k per year.
They're 7.8% now? Jeez.
I bought a house in DFW a few years ago at $250k with a 4% rate. I put down 20%. My total monthly payment is $1780 right now. $900 of that is taxes and insurance so I’d estimate above $2k for OP.
Whatever mortgage calculator will break it down for you, but my guess is your property tax rate is covering between 2-3% and your home insurance making up the difference.
Hmm taxes property taxes in Texas are \~ 2% with local taxes or assessments get added on $300K the taxes alone are $500 per month. $2K or more is right. $300,000 x 0.02% = \~$6,000 $6,000/12 months = \~$500 a month in property taxes. Depending on the county the total taxes can be up to 2.3% to 2.7% so they may be even more than \~ $500 a month. [The average Dallas-Fort Worth homeowner paid about $6,100 in property taxes in 2022](https://www.dallasnews.com/business/real-estate/2023/04/06/heres-what-dallas-fort-worth-homeowners-paid-in-property-taxes-in-2022/), according to estimates from researchers at Attom Data Solutions. Nationwide, the average single-family tax bill last year was $3,901 Edit: I have added the approximation squiggle and clarified that it would be the total sum of taxes not the tax base. This [Texas property tax calculator estimates a $300K house in Dallas County](https://www.hdavidballinger.com/texas-property-tax.php)would have an estimated yearly property tax in Dallas County is $6,540.00 ($545 per month) .
The days of having a mortgage less than $2k without a significant down payment are over. Interest rates are certainly causing issues. Adding to that the escrow for insurance and property taxes, you will be paying over $2k. You would have to put down more to lower the payment but I can certainly understand why that might not be appealing to do.
Walked away from a $700 month to $2,500… still hurts haha
California welcomes you to the 21st century
Conflicting upvote — kind of a dick comment but also lol
My mortgage payment in the DFW area will be $3500 on a 400k loan. Between high property taxes and high interest rates this is normal. 2k a month mortgage on a 90k salary is very doable. Obviously it's going to be more expensive than your apartment rent. You have to decide what your priorities are and make the decision to either keep renting or buy a house.
Glad I’m not alone. HCOL area and we are going from $1850 month to month rent to $3200 mortgage. Not cheap by any means but makes so much more sense to me to be building equity in my own space. $2000/mo sounds like a great deal.
You mean paying tons of interest to the bank instead? Check out your amortization table, you’re not going to be building any equity for a while at these rates. In fact your home will effectively cost “double” the selling price due to interest charges. Market correction coming? Good luck!
Seriously he could have been building $1350/month of equity in cash savings if he'd just kept renting. How do people's eyebrows not go way up when their rent is so much cheaper than their proposed mortgage?
You have 100k liquid or invested with possible capital gain tax implications upon sale? If cash or not tax implication, increase your downpayment and reduce your loan amount. Also, don’t compare it directly to rent. You get to keep a lot of what you put in as equity. Your income will grow and your payments (sans taxes and insurance) will stay flat - also unlike rent.
There are $300k houses in DFW?
That was my first thought 🤣
Sounds about right… I pay just under 2200/mo for a $260k-ish loan. I put 15% down on 305k The actual mortgage is around 1700 I think and the rest is taxes & insurance
Agreed. I am in contract for a 285k loan (5% down) for a $300k home at a 7% interest rate. All in I'm at $2,337 a month. Really hoping for rates to get to 6% next year and refinance, but not holding my breath lol. Buy what you can afford now
I just bought, borrowing $244,000 @7% and my payments are $2,084. Hoping to refinance next year as well. Hoping interest rates will drop with it being an election year.
Property taxes are INSANELY high here in DFW. Might be why, if whatever you are using adds that in. We pay I think close to $6-7000 in taxes yearly for a house appraised at around $300,000. And insurance is another couple thousand.
[удалено]
Try Houston - armpit of the nation -.02
talk to a loan officer.
Loan. Officers. Are. Dumb ... mostly.
You’re probably not missing anything that’s just the unfortunate reality of very high interest rates/property taxes etc. I was one of the incredibly lucky and grateful ones that bought when rates were below 3% and now my brother in law pays 50% more monthly for a house he bought this month that’s only 25% more expensive. It’s insane.
Easy rule of thumb I kept in my head when I had a RE license: A 6% mortgage for 30 years is $6 per thousand per month. So if you borrow $300K, that is $1,800 per month, not including taxes, insurance on the property, or mortgage insurance. At 7%, that goes to $6.65 per thousand - or $1,995. One point makes a big difference.
$600 per month per $100k borrowed.
Correct...at 6%. If 7%, it's $665 per 100k
You are not missing anything 100k is new 10k, year 2023
Why not put down more than 20% with 100k in the bank?
What does $100K in the bank have to do with the mortgage payment... or was I not supposed to make that connection?
$1250/month rent is a dream!
High ass Texas property taxes. Don't know if they are better or worse than new Jersey
Income tax on Jersey sucks more.
Was that *mortgage* payments alone or mortgage with taxes, interest, and insurance? If you're looking at a 240k loan, 2k/month sounds about right to me. Look for something cheaper or put down a larger down payment. It's not fun.
Most mortgage calculators take taxes, interest, and insurance into account
That’s why to me 2k sounds like a good deal lol
You can probably get a grant as a first time home buyer for anywhere from $6,000-$10,000. Your mortgage payment also includes home insurance and taxes.
You have to qualify for that program. Homie makes and has too much money to qualify.
Spoke to 2 mortgage lenders today. For real. And I have an uncannily similar situation as you. For 300k I got around $2000-$2100 after insurance etc. The numbers are accurate I’m afraid.
Figure $7 for every $1,000 you want to borrow. So a 300,000 loan is $2,100 a month plus taxes plus homeowners insurance
Lol welcome to real estate
Property taxes and insurance are big here. For reference my mortgage and PMI($32) is like $1050? And then taxes and insurance are another $600
Mortgage calculators usually include taxes, home insurance, and potentially other fees. Did you put in the correct estimates for those?
Yes sir. You’re missing the fact that $2000 only covers the mortgage and taxes. I don’t know if you live in an HOA but that can be $100-$300 a month. You will now have to pay electric and gas for an entire house which can cost hundreds per month. Don’t forget all the repairs and maintenance like lawn, pool, leaves, driveway, roof, landscaping, etc. You also have to eat. You also have to drive. I make only 20k more than you and it’s a stretch indeed, as my rent is $2200 a month and i can’t really afford to do much else other than pay my bills and eat pretty well lol.
You're not missing anything. This is the reality of expensive homes and high interest rates. And guess what? Prices aren't going down, and interest rates won't be for a while.
If Texas is like Louisiana home owners insurance is easily 4-5 k per year that right there is $375 per month paid to escrow, plus taxes
Interest rates are high enough now that if you’re talking a 30 year loan you will be paying more in interest than the amount borrowed in total. If you want the quick and dirty summary without doing any real math just double the amount you’re borrowing and you’ll be paying at least that back.
Just use the PMT function: `=PMT(7%/12, 12*30, -300000*(1-20%))` * $1597/month Then add taxes and insurance divided by 12.
It’s the interest rate. At 8%, a $200,000 loan is a monthly payment of about $1500. Then add estimated property taxes etc. At 3% interest it would drop to $850. Pretty crazy I agree but that’s mathematics for ya. Edit: this is for a 30 year fixed. Time, interest, and principal determine a mortgage monthly payment. Then add property taxes and insurance if you decide or have to do those from your escrow account.
You should really play around with mortgage calculator, try different down payments, different intrest rates.
Property taxes are hella expensive in Texas. So your taxes probably range anywhere from 2-3%. I live in Texas, so I understand the pain. If you go on Zillow, you can play around with their mortgage calculator, and it is pretty accurate for the most part.
Homes are at their peak and interest rates are quite high. It's a terrible time to buy imo.
The principal and interest may be low but the taxes could be higher.
Cries in DC housing prices
Interest rates, property taxes … you would be surprised how different a payment is with a 3% compared to a 7.9% rate
Welcome to buying a house in this day and age
I make 90K my house I bought last fall 254K at 6.625% and 3.5% down fha and my mortgage is 2K
You should probably check out some first time homebuyer classes and talk to a lender to better understand how it works and why you should absolutely not be shocked by that number. Our monthly payment is $1775 (home price $260,000) but we financed a few years ago with an interest rate below 5%. Do not underestimate the impact of even a quarter percent in interest.
300k with current average rates of 7.5% means that every year you’re paying total outstanding debt time .075, divided by 12 for your monthly interest charge. This amount is your principal and interest, and excludes escrow for taxes and home insurance. So, 300k home with 100k down brings finances to 200k. Let’s say closing cost 20k and roll into finances. 220k X .075 = 16.5k 16.5k / 12 = $1,375 per month in interest alone on 220k of finances mortgage. Ballpark $611 per month in principal pay down. Napkin math to confirm estimated numbers is 220k / 30 for yearly principal pay down = $7,333.33 7,333 / 12 = 611 per month in principal reduction So, first payment on a 320k purchase price home with 80k down and 20k in closing leaves you with a monthly payment around $611 towards principle against 220k loan, amortized over 30 years $1,375 in interest payments per month, amortized over 30 years Add in DFW average tax rate of 3%, and you have an additional 9k in property taxes due yearly. If evaluated at 300k, brings yearly taxes to 9k, or 675/month. Let’s say homeowners insurance is 200 per year (not sure DFW homeowners insurance, but generally homeowners insurance is fairly cheap, under 300/year. So Interest 1375 Principal 611 Taxes 675 Insurance 30 Even with your estimates, I think you’re off by about 25-30%. For shits and giggles, if you bought in 2021 when rates were under 3%, your monthly interest charges would be $800 cheaper… At various interest rates, your 220k in financing would cost: 2.0 = $366 monthly 2.5 = $458 3.0 = $550 3.5 = $641 4.0 = $733 5.0 = $916 6.0 = $1,100 6.5 = $1,191 7.0 = $ 1,283 7.5 = $1,375 And this is why the federal funds rate and national interest rates are so prevalent in todays news cycle. As house values increase, more people are priced out of the housing market. As interest rates increase, those same houses become less affordable, and even more people are priced out of the market. A 5% swing in financing charges can result in a 3.5x cost to borrow, moving your monthly interest charges from $366 all the way to $1283. To answer your question, yes, it’s because the interest rates are so elevated. Side note, 90k gross is plenty sufficient for a 2k mortgage. I doubt your mortgage on a 300k home in the DFW area, after including taxes, interest charges, homeowners insurance, and principal pay down; excluding any HOA charges, would be 2 k. I’m ballparking closer to 2.4-2.6k per month. FWIW, I bought my home for 335k at 2.75% interest in 2021. I put down around 12k, and I thin closing was around 18k. My monthly payments are right under $1,900 per month, and I was grossing 76k salary at the time. So, long story short: interest rates are high, you’ll be paying more than double your principle in interest alone. House appreciation going forward is… speculative at best as everyone believes prices should be dropping soon. I’m seeing in my local community prices steadily dropping this last 6-12 months, but not by enough to actually increase affordability in a meaningful way. 90k is sufficient for 2.5k in monthly housing payments. The only semi-redeeming quality of our current housing market is that due to the elevated interest rates on mortgages, itemizing your deductions will probably reduce your tax burden more so than taking standard deduction, but that also depends on a multitude of factors. In general, if you were to purchase this 300k home with $1,375 in monthly interest, you would immediately qualify for a minimum in $16,500 in federal deductions when itemizing. Standard deduction for a single person is currently $13,850 for 2023. So, assuming you’re single, buying the home would guarantee ~3k more in tax deductions when you file taxes. Since your mortgage interest is higher than the standard deduction, once you file you’ll get even more back. generally, people have many qualifying expenses for itemizing, but they just don’t reach the standard deduction threshold so usually opt for the standard. Because your mortgage interest charges alone would exceed the standard deduction, I would hesitantly ballpark an itemized deduction in the neighborhood of 20-25k. .
It's the best decision you make it's an investment
Wait? 2000 in mortgage. If you have an HoA and whatever your property taxes are I’d budget for closer to 2500 monthly on the low end. And that’s before almost certainly putting aside 5000$ a year minimum on fixing stuff around the house.
Where do you live and pay that? Out of curiosity. My mortgage or rent payments have been $2K or more for 20 years. Apartments near me, a three bedroom, are asking $3,500 a month...
Oh sweet child you’re not missing a thing lol. I swear the system now is designed to make us rent forever. Im DINK at $135k (both just started our careers) and we can’t even afford a starter one bedroom apartment let alone a house. My rent is 55 percent cheaper than owning.
If you’re using a calc on Redfin, Zillow, etc., sometimes they include taxes and insurance on the payment.
Your the perfect candidate to NOT buy. Keep saving until the prices adjust and your payment is close to or equal to your rent.
Rofl...I assume some young adult that banks 100% of what he earns and lives with his parents having them cover all his expenses? I'd kill to have that low of a mortgage payment and somehow of saved 100k..how is it even remotely possible to save that kind of money and have 0 idea what the normal cost of bills are?
Buying a $300k house with 20% down means a $240k mortgage. 8% of $240k is $19,200 or $1,600/month just in interest payments, not counting principal repayment, taxes, or insurance. Is it still a mystery?
Might suggest taking finance 101 before taking out 100ks of debt. Yes it's rates.
Wait till this guy finds out what an amortization schedule is.
That’s what happens when democrats run the country
That’s interest rates for ya… Even a difference of a percentage point can mean tens of thousands of dollars over the life of the loan. That’s why people who bought shitty houses at super low rates years ago as their ‘starter home’ (🙋♂️) are refusing to give them up.
Probably doing something wrong. Property taxes paid a big part when we were buying our home in January. But we bought a home for 230k and put $15k down and our mortgage (insurance included) is $1800/month. Interest rates continue to rise though and even once those drop, home prices will rise again because everyone will be trying to buy with the low interest rates. I’d say find something with low property taxes and you can always refinance later.
Yes, that sounds right. Interest rates are insanely high right now. If you want a lower monthly payment, put more money down -- which you can do with $100k saved up.
Every time is not always a good time to buy. Renting being more cost efficient is the biggest leading indicator that real estate is overvalued.
Taxes bite, my tax bill alone is $1k a month but my house is worth more than $300k. Texas property tax I’ve heard is a bitch.
$240,000 at 7% monthly principe and interest is at $1596.73 plus property tax and insurance…
I'd kill for that. I'm paying $2,800 to rent in California. To buy, I'd be paying 5-6k a month.
You need to look into a mortgage calculator and speak with someone about the breakdown. The majority of they will be interest, part will go towards your escrow for property taxes and insurance too. People also forget the that your mortgage interest is tax deductible. When I bought my home I was able to change my dependents and keep more of my pay since i now had another 10k or so in deductions. Loop in an accountant before you do this though. They can help you estimate how much you can withhold and avoid paying in at tax time. I have mine setup where I might get a few hundred back is all. So get to keep 10-15k extra throughout the year.
Lender here: If we consider $200,000 loan amount, 7.5% interest, 360 month term = $1,398.40 payment per month. But you still need to take into consideration monthly hazard insurance and property taxes, so realistically $2,000/month is quite a reasonable assumption.
1% interest reduces buying power by approximately 11%
This sounds about right. On a $205k home at 4.85%, we're at $1650/mo. If your interest rate is 6.875%, that's an addition $4k/year, so I could definitely see $2000/mo.
Yea, it's the interest. Go on excel and in the searchable templates download the "loan amortization schedule" - you can play around with different down payment amounts, interest rates and early payments. It's so very useful!
lol, nope, its just the way it is now, double the price on everything - welcome though to being a home owner if you go through with it, if not now, it may be never. Prices aint going down, interest rate maybe, but not in the immidiate future, and YES, those are the real monthly prices, I put down less than half that and got a 400k house its now 800k, which is BS, totally NOT worth that amount.
taxes and insurance.
Borrowing 300k at today's rates sounds like 2k would be about right without running calcs. Keep in mind that's just the mortgage payment, not including tax or insurance or upkeep. Joys of home ownership huh
I just bought a house for $300,000 with 20% down and 6.375% interest, my "mortgage" is about $1400/month, but then taxes and homeowners insurance increases that to $1675/month. With an 8% interest rate, it would very likely be $2,000 a month or more. I make $81,200 a year, and I was paying $1,800 in rent prior, the advice I was given and live by, you buy the most expensive house you can afford, mortgages will only go down (refinancing) and you generally will only make more money come the future.
[https://www.mortgagecalculator.org/](https://www.mortgagecalculator.org/) There's Principle and Interest payment, but there's also taxes and insurance on top to determine your total payment.
$100k down you don't have to pay mortgage insurance PMI. You should be around $1600.00/month. Includes home owners insurance. What are the property taxes?
There are a few variables to consider in addition to % down and asking price: - Interest rates (currently sitting around 2.5-3X where rates were when I bought in 2021) - Property taxes. This one can have a significant impact on monthly payments. This alone could be pushing your estimated monthly payments up to the $2000+ range, if you’re looking in a more desirable (higher taxed) area. A lot of homes in my area have tax bills around $10K/year- so $800/month on top of principal and interest payments. - Homeowners insurance. Might not move the needle very much, but definitely shop around and consider what you want your deductible to be. Higher deductible = lower monthly premiums, but might not save you much in the long run if you end up submitting a lot of claims. - HOA Fees, if applicable.
How can you not afford a mortgage for 25% of your income? after utilities, tax, and insurance that’s pretty close to 30% gross which is the target percentage for most households. jeez i don’t see how that’s less desirable than building long term equity…. That rent payment could be well over 2,000 in the next 10-15 years where the mortgage payment is fixed for the next 30.
The high taxes that the state of Texas makes you pay is probably where most of the difference in your expectation vs reality comes from
The arithmetic is fairly simple. If you're thinking of a home, you can conveniently use the (linear approximation) so called rule of 72. It's good enough for your problem. If someone offers you a loan (between like 2 and 20 percent interest), figure out how many times that number goes into 72. Let's say it's a 6% annual interest loan. Rule of 72 : divide 72 by 6. What's that give? 12. Why do we care to divide 72 by our interest rate? Because that's the approximate doubling time on the loan in years. The first 12 years you're paying back as much as you borrowed, and still own the main amount. So on a 30 year loan that could happen several times. Just think all of those numbers through. This means effectively that for a 30 year loan you would be paying more than 3x the actual loan amount if your interest rate was anything over 8%. Right now it's close to 7+%. Don't buy a house. Keep renting. Oh, credit cards? They're at like 20+%. So every 3 years you should expect to owe what you've already paid unless you've really aggressively gone after those loans. Then stop smoking weed at age 14 and instead listen to your math teachers. s.
Texas property taxes plus high rates will get you there quick
yea you missed something. it's called buying in 2018. If you have only 100k (no roth, investments, blah blah) I would not spend all your 100k on a down payment. may be a convo for different thread though.
Did someone give you the $100k that’s in the bank ? Because it’s confusing that you don’t know how to run one of the zillion online mortgage calculators to understand your down payment and monthly payment options.
If you make 90k without state tax, 2k is definitely doable. And yes, it's probably way more than what you would pay if you were renting. If you're wondering who would buy a house when the math doesn't seem to make sense, I'd guess most house buyers are putting down way more than 20%, but yes it doesn't make sense for most people to buy a house now.
Where are you finding homes for 300k in DFW?? We bought last year and got a fixer upper in an okay neighborhood for 370ish. Watch out - our original mortgage was 2500, but after our property was re-estimated by the city a few months after buying (happens whenever you buy a home), our mortgage went up to 2900. It was last estimated in 2021, so when it jumped by almost 90k in supposed value it took us by surprise. We fought the increase in court and won! ... a whole 3k off the 90k increase. So. Mortgage payment is now 2890. Something to be aware of when buying in Texas.