2 ms·

Original was "affordable for a family making $60k" Drop the fam back to $60k, and that "$3,000 a month for saving and other expenses" drops to $2167--and I wou

Original was "affordable for a family making $60k" Drop the fam back to $60k, and that "$3,000 a month for saving and other expenses" drops to $2167--and I would put special emphasis on "expenses": few hundred a month for vehicles, a few hundred for groceries, occasional co-pays (that can get pretty big as you get older and have more things wrong with you), emergency repairs, school clothes, etc. There will probably be some left over if both parents are employed--not a lot though. I guarantee that the average family will go deep into the red if mom or pop are unemployed for more than a few months in the $200k house + $60k/yr combined scenario.

rayiner 7y ago
I said $60-70k, the idea being that the person making $40k is married to someone making $30k. Nonetheless, $60k is 24% of gross income is still well within the recommended affordability range, and well within the 31% lenders will qualify you to borrow. Even if one person is on unemployment (in Maryland it pays half salary for 6 months), that’s 32% of income. Tight, but on average that should last just a few months.
- jstewartmobile 7y ago
  Even if we pop it back up to $70k--still too close if you ask me. Shit happens. Most people would be better off economizing on the house a little, and locking those savings in, rather than micro-managing nickel-and-dime expenses. What the lenders will do is neither here nor there--given that most will do just about anything for a short-term buck. We all saw how that movie ends back in 2008. I just happened to see it over and over again. What is so objectionable about telling people to give themselves a little more wiggle-room?
  - rayiner 7y ago
    A $230,000 house on a $60-70k income is giving yourself more wiggle room. At $60k, you could qualify for something closer to a $300,000 house. That’s what most people do—yet the default rate for prime borrowers stayed below 5% even in 2008 (and is around 1-2% typically).

rayiner 7y ago

I said $60-70k, the idea being that the person making $40k is married to someone making $30k. Nonetheless, $60k is 24% of gross income is still well within the recommended affordability range, and well within the 31% lenders will qualify you to borrow. Even if one person is on unemployment (in Maryland it pays half salary for 6 months), that’s 32% of income. Tight, but on average that should last just a few months.

jstewartmobile 7y ago
Even if we pop it back up to $70k--still too close if you ask me. Shit happens. Most people would be better off economizing on the house a little, and locking those savings in, rather than micro-managing nickel-and-dime expenses. What the lenders will do is neither here nor there--given that most will do just about anything for a short-term buck. We all saw how that movie ends back in 2008. I just happened to see it over and over again. What is so objectionable about telling people to give themselves a little more wiggle-room?
- rayiner 7y ago
  A $230,000 house on a $60-70k income is giving yourself more wiggle room. At $60k, you could qualify for something closer to a $300,000 house. That’s what most people do—yet the default rate for prime borrowers stayed below 5% even in 2008 (and is around 1-2% typically).