My girlfriend and I have found the house of our dreams. It is an older home in a semi-dangerous neighborhood. She doesn't work, but I earn around $16,800 a year now, with prospects of a raise in January. The house costs $569,000 but we may be able to trim some, thanks to the real estate bubble collapse. Can someone please figure out what our strategy should be, in order to secure this house? We have a baby due in May 2008, and want a "nest" for our baby. Thanks.
2007-12-15 06:01:03 · 8 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
A very simple rule of thumb is that you can afford a house that is worth three times your salary. Thus, there's absolutely no way you can afford this house. Assuming you put down 20%, your monthly payments (principle and interest) would be just under $3,000. Depending on where you live, add another $500-$1000 per month for taxes and insurance.
Sorry, but this house is not for you. I would rent an apartment for awhile so you can build up some cash. I'd also consider getting a new job that pays more...$16,800 is very low. Look into getting a factory job with a union or maybe learn a trade such as plumbing or electricity.
2007-12-15 12:45:51 · answer #1 · answered by Dave C 2 · 0⤊ 0⤋
First you need to put 569,000 down. Then with your 16,800$ per year job, you might be able to pay the taxes and insurance on this house every year (barely). If that house is in CA, your taxes will run about 600$ per month. Insurance add another 100 per month. So you are making 1400 per month...take out another 200 for taxes and you are making 1200. Minus 700 for the taxes and insurance and you have 500 per month to live on. Subtract 300 for food and now you have 200 left to pay for non-essentials like electricity and gas. So if you want heat and air-con in your house, lets hope that last 200 covers it. Also better hope that nothing ever needs repairing.....so lets sum it up. If you did have 569,000 to pay for the house outright, you would still seriously struggle to get by.
2007-12-15 06:25:34 · answer #2 · answered by Anonymous · 0⤊ 0⤋
The house costs 33.8 times your annual income. A 30 year mortgage with 0% interest would have payment equal to 112% of your GROSS income. No strategy in the world can trump simple MATH.
2007-12-15 07:22:53 · answer #3 · answered by STEVEN F 7 · 0⤊ 0⤋
I hope this is a joke. A $500,000 house on $16,800 a year. Yeah, right.
2007-12-15 09:03:33 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Have your girlfriend work to raise some mor emoney.
If you can, take another shift to increase your annual salary.
Also, you can always take out a loan but remember, you have to pay it back eventually.
2007-12-15 06:14:17 · answer #5 · answered by H. 3 · 0⤊ 0⤋
is this a joke q? that will be around 4-5k mortgage a month with a downpayment. you never mentioned money in the bank...
2007-12-15 06:16:38 · answer #6 · answered by adcmtp 3 · 0⤊ 0⤋
SIgn up for http://catchdollars.com
Make easy money for just filling out surveys!
Its free and legit.
2007-12-15 07:28:16 · answer #7 · answered by Anonymous · 0⤊ 1⤋
You are either too dumb to reproduce or you are pulling my leg.
2007-12-15 06:07:22 · answer #8 · answered by Fred K 2 · 2⤊ 1⤋