How comfortably can we afford this house? 99k income, $235k house

[dccordell]

We are seriously thinking about buying a house that we really like in a great neighborhood with great schools and is closer to work. The house needs little bits of maintenance here and there, maybe some paint, but as far as we can tell, there is nothing major wrong with it (pending inspection of course). 

My wife and I are worried about if we can really afford this house comfortably or not. I know this isn't an easy question to answer, as everybody's situation is different. Let me just give some basic financials and see what you guys and gals think.

Combined gross income: $8250 monthly / $99000 yearly

Monthly spending including estimated new house utilities: $2420

Leftover actual cash in the bank monthly: $3410

So, not including a house payment (PITI), we have $3410 leftover.

The house we are thinking about buying is around $235000 (hopefully can get around $225k). That would put our monthly house payment around $1450/month.

That would leave us around $2000/month for spending on stuff like shopping, saving for trips, house maintenance, etc. 

What do you all think? Would we be "house poor?" I have read on more than one site that spending less than 25% of your monthly gross on a house note will prevent being house poor, but that's a blanket statement that may not apply to us.

The bank has approved me for at least that much on my income alone (I only asked for a pre-approval of $240k for now). But I know that just because I'm approved doesn't mean we can afford it.

Help!!! We need some opinions... we are hoping to make a decision within a few days. Thanks!

[Anonymous]

Only you truly know your spending/saving patterns, but you should be able to be very comfortable at that price. 

[Anonymous]

It will all come down to your spending habits.  But you should be comfortable with an income like that.

[dccordell]

Thanks for the opinions guys...

Just so happens that the house in question went into contract last night! After sitting vacant on the market for over 7 months, they accepted an offer the same week that we started looking at it. Just out luck! 

But I guess we have a better idea of where our limit sits and can move forward looking for other houses. 

Thanks!

[Anonymous]

Cordell thinkin about buying a house and wondered-

Would we be "house poor?"

Given the stats, maybe a little at first.  I was in that boat in 1977 when I bought a new spec home with a 325 dollar monthly payment.  Family said we'd go broke.  My first year in the fire dept I made 10,000 and wife worked only part time.  So yeah we had to shuffled money around, but we did ok because we knew it would get better, and it did.

It depends on what kind of stuff you like to do.  If you have expensive hobbies ( like golf) you have to adjust from playing every weekend to just every other.  I'm thinking if you love your home, and you like it, and if you have to give up the movies a few times a year or Disney W to live there, then so be it.  Just don't be the guy in a nice house but nothing in the fridge cause you're too broke to go to the store.

If your house prevents you from really doing the things you like, then you will grow to resent it.  That doesn't always mean just the payment either.  Take a big yard, you gotta cut it, rake it,  trim it and water it.  Been there, done that, and no longer want all that.  So I made sure I moved to home where I can literaly cut the grass in 10 min, or pay a guy 20 to take care of it as needed.  There is always something going in a house, that you must take in consideration.

Your potential payment and mine are close.  Coming from a mortgage payment free life last 8 years (prior the payment was 350) I was staggered when they gave me the numbers on my new, because I was one of those jokers who said, "how does a guy make a 1500 house payment?"  I still looked at life in many ways with 1977 glasses.  But now I know 1500 common nowdays, but the country is a much richer place than 1977.

Good luck and I think you're gonna be ok no matter what y;all decide.

[InvincibleSummer3]

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@Anonymous wrote:

Cordell thinkin about buying a house and wondered-

Would we be "house poor?"

Given the stats, maybe a little at first.  I was in that boat in 1977 when I bought a new spec home with a 325 dollar monthly payment.  Family said we'd go broke.  My first year in the fire dept I made 10,000 and wife worked only part time.  So yeah we had to shuffled money around, but we did ok because we knew it would get better, and it did.

It depends on what kind of stuff you like to do.  If you have expensive hobbies ( like golf) you have to adjust from playing every weekend to just every other.  I'm thinking if you love your home, and you like it, and if you have to give up the movies a few times a year or Disney W to live there, then so be it.  Just don't be the guy in a nice house but nothing in the fridge cause you're too broke to go to the store.

If your house prevents you from really doing the things you like, then you will grow to resent it.  That doesn't always mean just the payment either.  Take a big yard, you gotta cut it, rake it,  trim it and water it.  Been there, done that, and no longer want all that.  So I made sure I moved to home where I can literaly cut the grass in 10 min, or pay a guy 20 to take care of it as needed.  There is always something going in a house, that you must take in consideration.

Your potential payment and mine are close.  Coming from a mortgage payment free life last 8 years (prior the payment was 350) I was staggered when they gave me the numbers on my new, because I was one of those jokers who said, "how does a guy make a 1500 house payment?"  I still looked at life in many ways with 1977 glasses.  But now I know 1500 common nowdays, but the country is a much richer place than 1977.

Good luck and I think you're gonna be ok no matter what y;all decide.

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This is a great post, and totally makes me feel better about my perspective. (I am agonizing over the question of being "house-poor" myself, but I think it's the worried single mama in me that is causing most of it.)

Also, I love hearing these stories. $325 a month house payment! That's a hoot, I can't imagine. I work with a guy who bought his first home in my area during the early '80's and his interest rate was 17%.