based on our income what price of home is affordable?

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We live in the cleveland area, my husband’s salary is 80,000 and mine is about 70,000. Just want to see what you guys say to kind of guide us in the home buying process. What price of home would be affordable. aka, not so cheap but also not so we’re broke…

  1. Reply
    Jenna H
    June 26, 2011 at 10:07 am

    your rent/mortage/ect is not suppost to exceed 10-15% of ur monthly income.

  2. Reply
    June 26, 2011 at 10:12 am

    You need to google an amortization chart and fill in amounts with a reasonable interest rate and the year term you want to pay and it will give you an amount. You will probably have to figure in an escrow amount for taxes also though.

    I figure one weeks pay for ours and we are doing fine.

  3. Reply
    Robert F
    June 26, 2011 at 10:56 am

    30 % of your net income or better 25 % so you can save for a rainy day fund or pay extra on the principle to save money.

    If you cannot live comfortable on $ 70,000 you are over spending

    Not saving at least some Is a part of the financial problems today

  4. Reply
    June 26, 2011 at 11:56 am

    You will probably get approved for around $ 400,000 but the number one rule is to purchase a home that is no more then double your total income and NO MORE then 3 times your salary. I don’t know your situation but I would say $ 255k or under would get you all the bells and whistles especially in Cleveland Ohio. This will also give you leverage incase one of you happen to lose your job or become ILL to still live comfortable and still save money for your future and other expenses.

    Make a list of all your monthly bills such as car payments, medical, utilities, insurance…etc and don’t forget when your looking at homes to find out how much taxes are for the home your buying and that your utilities may differ then your current home. As you know Cleveland has gone under with all the foreclosures going on and home prices are dropping by the day so you can pretty much buy a mini mansion or new construction with 2500-3400 sq foot for $ 255-$ 300k in most cleveland suburbs where it would have cost you double that amount 2 – 3 years ago.. I bought a foreclosed house for $ 44,000 and it was apprassied for $ 113k but it sold for $ 134,000 5 years ago in one of clev suburbs so get a good realtor and have fun house huntng!

  5. Reply
    June 26, 2011 at 12:37 pm

    You should probably have an idea of how much you are comfortable paying every month to start.
    Here is a break down for you but these numbers are estimates.
    $ 400,000.00 purchase price – 3.5% down payment for an FHA loan =
    a loan amount of $ 386,000.00 + the upfront mortgage insurance premium of 1.75% = a loan amount of $ 392,755.00 at rate of 5.125% = a principle and interest payment of $ 2,138.50.
    Now we need to add the following.
    1) Home owners insurance of $ 125.00 ( estimate )
    2) Property taxes of $ 300.00 ( estimate )
    3) Mortgage insurance of $ 160.83
    This gives you a total monthly payment of $ 2,724.33
    I hope this helps.

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