Quote:
Originally Posted by urban1
Assume a price of $400,000 for a house (lower than the average price of $460,000). And assume this family was able to save a 5% downpayment before they had their kid and will put $20,000 down. The mortgage principle is $380,000.
Assuming a rate of about 6.5% and 25 year ammort, your mortgage payment is going to be about $2,500 per month. Depending on their exact tax situation, the familys $80,000 gross income might be about $54,000 net which is about $4,500 monthly.
That $4,500 monthly minus $2,500 for your mortgage is only $2,000 left for all your other expenses like car payment, daycare for a couple of days per week, and then utilities, and food, and kids arent cheap.
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Or, start looking at houses for under $300K. I just looked on MLS and found about 20 three bedroom homes that weren't in Forest Lawn (or comperable areas.) And look at a more realistic interest rate of 5.5%. Now your mortgage is $1750. Or even take that mortgage and span it out over a longer period.
It can be done- it just can't be done if you feel you have to keep up with the Jones'.
Of course, having said all of that, I happen to be quite lucky to have bought when I did.