How much you will get approved for a loan will depend on your income.

Here is the math formula a lender uses to decide the max approval amount they say you can afford for a PITI mortgage payment ( Principal, Interest, Taxes, Insurances on PROPERTY and Insurance on LOAN ie the PMI)

Formula is X-Y =Z

X= Gross monthly incomes X .42

Y= the Sum of the minimum debt payments on all the liabilities you have in car notes, cred cards, student loans etc)

Z= the maximum PITI monthly mortgage a lender says you can afford

Mind you Z is the maximum at 50% debt to income and it’s not advisable to buy at your max you should always stay close to under 36% Debt to income, let’s call this A.

‼️Example at $55k ‼️

X= $4,583 x0.42 = $1,925

Y= $350 (student loan payment)

$1,925- $350= $1,575 max PITI Mortgage (Z) you would likey qualify for today in March 2023. poor.

This would be MAX a $180k house at 10% ($18K) down payment at 7% interest rate at a PMI rate of 0.80% at a 1% property tax rate.

The mortgage would be $1,480.

Are you really willing to barrow the loan for a down payment under the CalHFA Ca Dream for All Program.

You have to repay the loan eventually at sale/transfer or after 1 refinance or when the loan is paid off at end of term and then you have to share appreciate.

That shared appreciate can cost more than PMI.

If you live in a HCOL city than it may be worth it if houses will just appreciate and appreciate you will keep the house for a long time

My husband and I (28) just passed over making an offer last month on a 3x1 1200 sq feet house ($364K- remodeled home and one of the lowest priced in our county) with no garage because with a $75K down (which would have required a 401K withdrawal) the payment at 20% down at 6.5% interest would have been $2,300 per month and like $400 in utilities and ou condo I bought pre-marraige runs us $1,200 total. We could not justify $1,500 more a month for 1 more bedroom and a small grass backyard.

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$2K rent is alot but would possibly be a smaller monthly increase than buying in this market.

My husband and I have the similar numbers as you in income ($165K) and net ($7,400) and the same savings $60K for house . We only have $20K in student loans ($10K each). We have only been married 24 months and have only been saving for this long about $3K per month. Homes in our city are cheapest $350-$450K as well.

Owning our small condo (bought 2020 with $6K out of pocket at 2.5% interest rate at $150K sales prices) runs us $1,200 per month and we are staying and not buying a single family house for the next 2-4 years until we have our first kid because we want 2 kids back to back and I kids alone will be $2K per month ($1,500 FT day care and $500 for the cheapest family rate health pan among 6 options our jobs offer) 2 kids back to back will be like $3K per month)We both want to be working parents.

Depending on how this year goes we may have to start a fund for fertility treatment and or adoption in the future so we are not buying so we can actually afford a house and kids in the future. Our money is parked in a 5% AYP CD and 3.4% HYSA.

Hello,

28 year old female here. Supporting 2 adults off a W2 job that pays $75K in most major US cities is hard. Rents are $2K to $3K. Buying real estate when one perosn make only $75K and the other is self employed and only making $10K to $30K ( below $15 Minimum wage in some states) will likely not be possible.

28-year-old female here. Supporting 2 adults off a W2 job that pays $75K in most major US cities is hard. Rents are $2K to $3K. Buying real estate when one perosn make only $75K and the other is self-employed and only making $10K to $30K ( below $15 Minimum wage in some states) will likely not be possible.

I am Mexican and my hubby is Mexican too and he (28) has worked since he was 14 years old. From 14-19 he worked in the central valley fields of CA picking food and he has never expressed being tired of working even now as an Engineer in the corporate grind so it sounds like you really have a strong desire to be self-employed and work toward a better work-life balance. I have been working since 16 (housecleaning and retail until age 22) then for the government since then.

I would advise against buying anything if you want to grow your side projects into a business. 27 is young you have a good nest egg to follow your dreams. You can buy real estate at any point in time. The older you get the harder it becomes to follow your dream although still possible.

I would say move out with a roommate so your rent can be sub $1,400/month and you can still add generously to your savings for a future real estate purchase in SoCal or somewhere else.

I think option one is a better option because it avoid debts and give you time to explore. 23 is very young and so much can change in 2-5 years.

To be a consultant you need a great deal of experience and expertise. You can try Real Estate if you want. Typically all you have to do is take 3 classes and pass one state license test.

At 23 I graduated with $10k in student loans and I was so debt adverse I didn’t wanted to work for free doing practicum a for 2 years in an MSW Program or add $20k more in debt. I got a full time job that would allowed me to save and qualify for a home loan in 2 years. Then I bought my first property at 25.

I am 28 and I think I made the best choice to forgoe a Masters in my field of social work. I make $35/hour in a role that tops out at $46/hour and I didn’t need a Masters. I am a hiring manager and I interviewed Master Degree holders all the time.I might still get one in the future and pay cash for it so I’ll be a better candidate for executive program manager roles that pay $45-$60/hour.

What should you do about what? What’s the question? Refinance it if possible

I’m in CA so it’s a different market (unsure how competiré NYC is) but when I was looking for rental I did something unconventional and would write a letter(like homebuyers do to homesellers) and include the link to my FB which was always professional and to my LinkedIn so the home owner would get a glimpse into who I was on a “personal” and “professional level”.

Technically speaking because of fair housing policies they can’t ask for anything of the sort but I found I got more call backs for tours when I did this than when I did not.

If that seems too personal an alternative may be simply making a 3-5 page Canva of what you are looking for in a rental, the type of tenant you’ll be and maybe references idk how non conventional you want to be - IF at all.

In some states is this not allowed and I don’t think it’s a good idea because if there is an issue and you have legal stance to decduct rent or break the lease you are screwed bc you already paid upfront.

$95k in Alabama seems like really good money and presumably that number will continue to go up.

I personally would go for the $282k house that you really want even though in effect it’s 50% of your net pay. House price tags are lowering bc the IR rates are higher.

It def is scary buying when you know you will be spending 50% net on the housing but I think it’s worth it because when rates do go back down the values will go up again as more qualified and willing buyers hit markets again.

When I ( childless adult) bought In March 2020 my mortgage payment and utilities were 50% of my net but I was fairly certain in my city of Sacramento,CA demand during the pandemic would push prices up.

I also jumped into my purchase then because I was offered in March 2020 a 3.5% when in December 2019 I had almost bought at 5.5%.

In 2021 I refinanced down to 2.5% and dropped my PMI and my whole mortgage by $300 and that year I got a 5% raise and then in 2022 a 10% raise. Now my total housing cost with all utilities included is 30% of my net pay and I am very happy I bought when I did.I’d buy now and refinance later.

Mind you I am now married and the housing expense is now only 16% of mine and my spouses combined net pay. It’s even more affordable now.

Okay so that’s an 8% raise. I’d def argue for more at the yearly review but it wouldn’t hurt to bring it up now.

However if they will be stingy then it will be hard for you to convince them because they already decided that the “manager” position is not essential and they can just pay another worker a little bit more to do the higher level work the manager did.

At that point the only thing you would be able to do would be less efficient so garner OT. You’d also just have the option to quite like the Manager did.

To be honest they (leadership and HR) won’t care that you’d do not get overtime anymore. They benefit off not having to pay OT.

What was the raise they first gave you. At my work you get 5% raise for doing hiring duties.

As they just gave you a raise 6 months ago they likey won’t be willing to again until your next yearly review is due.

No difference both would be borrowers/ owners.

Helpful article for how non married couples can hold title of a house here

I take it if you both are on title and loan then if the worse happens you both are protected and entitled to the equity.

Many people will begin to comment” never buy a house with someone you are not married too” but I say , “ Congrats on your Millennial Wedding” It’s now somewhat common now to buy the house first and then have the wedding.

My cousin had a Small beach elopement in 2019 with just parents and siblings. They rented for 2 years and in 2021 bought a house and in 2022 had their wedding.

My friend that bought in 2020 with her bf. Engaged this year. Said they split down payment down the middle.

In my case I bought the condo my hubby and I live in with my own down payment before marriage so it my own separate property.

Got it. Still as a household the income is over $200k so I would think financially there is minimal stress over providing in terms of quality of life.

I’m in the capital of CA and median household income here is only $85k so even by expensive CA standards your household is fine at over $200k.

2 years until the 3 years old are 5 will pass by so fast I’d thinking hanging onto the flexibility especially with a special needs child with an IEP would be worth it.

My household without kids it at 140k and we net $7k so I would think with $200k and 3 dependents your net would be like $11k and per Zillow I saw rents are about $3K so I presume your mortgage is under that.

Only you can truly decide if more money now is worth giving up the flexibility. I personally would not money isn’t everything.

Presumably childcare is a lot right now ( my guess is $3k based on there being 3) but in 2 years it should go down right?

Per the 1.85 times comment I put you husband at $160,000 and you at $87,000 for a household income of $247,000

Is that correct?

I do not have kids but I think the flexibility is worthy staying another 2-4 years. They are only small once and you guys are already essentially at $250k.

Yes w larger down payment would be better and a purchase price of $90k to $120k would be better.

On $30k you max PITI is only $1,250 for a mortgage

$30k/12 months $2,500 gross monthly

$2,500x .50% is $1,250 the max mortgage payment you will get approved for on $30k salary and $0/monthly debt.

A big down payment will help but lenders use your salary in the math equation to pre-approve you.

Here is the math to show you why you can not afford a $200k house on approx $30k salary.

Here is the math formula a lender uses to decide the max approval amount they say you can afford for a PITI mortgage payment ( Principal, Interest, taxes, insurance on property and insurance on loan ie the PMI)

Gross monthly income/2 =X

X-( the SUMof the minimum debt payments on all the liabilities you have is car notes, cred cards, student loans etc) = Y

Y being the maximum a lender says you can afford

Mind you Y is the maximum at 50% debt to income and it’s not advisable to buy at your max you should always stay close to under 36% Debt to income, let’s call this Z

Example of a person making $25/ hour full time with the following debts($350 car note, $50 in minimum credit card payments)

$25x2080 hours (full time work) = $52,000 gross per year or $4,330/ monthly gross

$4,3330x50% = $2,166 (X)

$2,166- $400(monthly debt payments)

Y=$1,766= maximum mortgage they can affordable at 50% debt to income ratio.

Maximum property amount they would qualify for would be $200k and that would be buying at top limit.

This would mean 3% down payment of $8,000 at a 8% interest rate the payment would be $1,700