70K in savings(obviously won't use all toward a down payment) should qualify for additional +10,000 toward down payment for local grant, 90k combined gross. Looking in the range of 250-300k.
Only debt is my student loans to the tune of $2000 (almost paid off, stopped touching it entirely when interest rates were non-existent to low), no credit card debt, no car payment because our car is paid off, and is a 2018 Honda and very reliable. Currently paying about 1850 in rent each month and it's comfortable.
No kids, no plans for kids, both my husband and I are very frugal homebodies lol, I work from home but will RTO in a few months more than likely, really our highest expenses month to month is health insurance, rent, and our senior dog(an expense which, unfortunately, won't be forever 😭).
Is it worth beginning to look in about 6 months time? Should be able to put away another 6000(underestimating for safety, and not sure if I'll be visiting my family this year for the holidays yet which will eat some savings potential. we've been managing about $1500-1800 savings/mo depending on if I pick up OT or not, which I almost always do, but don't want to count on that ALWAYS existing just in case) in that time. If not, what are some suggestions, how much longer should we focus on building our savings etc? Anybody with a similar financial situation and lifestyle that has made it work? Anybody that regrets it, or wishes they waited longer? Obviously I'd like to have a smaller loan cost, but housing is also quite expensive in our area, my husband cannot drive (but thankfully has many other options to get to work in this area) and with a looming RTO I don't want to roam too far from our current location.
Thanks everybody! Happy to answer any questions/give more information/context.
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Have you spoken to lenders about preapproval? Any credit score issues?
Not yet, trying to get more of a basic idea before we start making more moves. No credit score issues, both of us are over 750. Took a bit of a hit during the pandemic but came back up pretty quick.
We make 120k and bought a home at 6.1% for 289k in MN with a 20k down payment. We pay $2,250 on our mortgage/property taxes/mortgage insurance. If that sounds doable to you since it’s right in the middle of your house buying budget I would say look at getting pre approved! You’re not that far off from where we were BUT we also pay $1,800/mo in daycare so I’m sure your salary at 90k would be comfortable still. Also any savings? We had to throw down $3,000 of that 289,000 in earnest money to have a strong enough offer and paid ~$3k in the first two months on plumber, radon mitigation, a few furniture items, blinds, etc.
That's good to know! And woof, yeah, that daycare cost sounds rough. We're not planning on kids (and can't have any anyway, so a "whoops" isn't possible). $2250 with all that rolled in sounds doable 🤔 And yeah, thankfully our savings are pretty decent. we moved cross country not so long ago so that ate a good chunk, but we recovered from it fairly quick. And yeah, at first my husband was saying we should throw more at the down payment, and I was like... in this job market I'd prefer more emergency savings even if it's a lower down payment, y'know? How long before looking did you look into getting pre approved, as well, out of curiosity?
If that local grant is the NJ First time home buyers grant (which offers 10k) you would be below the income requirement. However another requirement is you can not have more than 20% of the purchase price of the home in your liquid assets or else they view you as having too much money. I got burned by this so just be aware if it’s the NJ or any other state for that matter to check before assuming you were eligible like we did
No worries, not NJ, we thankfully would still qualify at least based on the terms readily available, trying to more assume that as a "bonus" just in case, and our realtor friend also said funds for it tend to run out in the first quarter of the year so I don't want to rely on it fully being there. Thank you though, it's always good keeping those things in mind. Couple years back I couldn't get insurance because I just barely squeaked above the income limits, but still couldn't afford anything.
I took the advise of buying no more than 3x your gross income a couple of years ago. Our combined income was 125k or so at the time and bought a place for 348k 6.99% with 30k down and we have been pretty comfortable. With your income that's 270k. You could put 30k down on a 300k house and still be following that rule. Just don't buy a place that needs a lot of work.
Makes sense! And yes, I have a friend that has a townhome that was cheap on paper, but is a disaster when it comes to repairs. I'll keep that in mind for sure. We would likely try to buy outside of the city proper, because city taxes are crazy on top of county in our area. I'll ask around with friends for what home insurance rates are and try to research that as well. Thank you!
This is what I went off of and stayed well below it. About 100k below. I didn’t put much down though, income 150k, bought for 350k with 3% down. Kept some cash reserves
My only concern would be does your total income include OT, if it does, then I would look at my budget without the OT. You just never know when/if it will go away. I know someone who didn’t and when it was drastically cut back she found herself in a very bad spot and nearly lost her house behind it.
Very good point! My workplace has been running insane OT for 5+ years, but I am also trying to think of it only as "bonus" cash. Plus you never know if you are laid off and hired somewhere that's stingy with it, and hire you still based on your previous hourly rate. Husband also works part time, and is able to move to full at any point should he ask (great relationship with his boss) so that affords us a little cushion as well. Thanks for your advice!
I also made 90k when I bought my house last year. Our PITI including HOA is around 2150 and personally it feels a little tight. Especially now that my car died (needed new engine) so we now have a car payment we didn't before. We are technically doing fine but not saving as much for retirement and such as I'd like. We also have no kids but do have 4 dogs.
On a $250,000 home 20% down your mortgage payment will likely be less than your current rent. For a $300,000 home you might be slightly above. I think you’ll be fine.
I'm at 140,000 looking at 1.3 million and apparently I'm approved...
I make $90k base and I’m looking at the $280-300k budget with 5% down but I’m holding off for a few more months so I can have an extra $15-20k in the bank for when the dust settles after closing.
My husband and I make about 110k combined after 401k deductions and insurance. We were looking in the 275k-325k price range. 20% down. Ended up finding a very well-maintained home at the very top of that price range. Mortgage came out to just under 2k/month. High city taxes, but low insurance cost. You make less than us, but you're already comfortably paying just $100 under our mortgage. If we made 90k/year here we would have qualified for closing costs and down payment assistance, but we paid cash with our ~95k savings (20k left over, minus investments). If we had to pay PMI, we would have had to find a cheaper home. We just bought our house, so I can't give you much information from experience, but figured you'd want to hear from someone in the same boat. No kids, no debt (your student loan debt is quite small imo), biggest expenses come from our senior cats. Big homebodies, so worth it for us going into the top of our price range for our dream home. It's recommended to save 1-3% home value for housing expenses and 3-6 months emergency fund. We are working on doing that saving 10% of our salary/year in a joint account and individually investing 5-10% more. You're already saving close to 20%. We feel comfortable doing this because we get at least a 2% raise a year (partner and I have the same job) that can cover insurance or tax increases. We also have good job security and don't rely on OT or other variable income.