Does owning a home really cost this much per month?!

Adore · Jan 28th, 2007, 02:08 PM

I'm getting out of college in a year from now! My job will I think pay $60-$80,000 a year? That could be off, or maybe after experience, but we'll just say, starters would be... $45,000 to be safe though I've been told my my academic advisor it would start at 60-80. My boyfriend makes maybe $50,000 a year, and maybe more by a year from now, I don't know.

Well, we have been talking about owning a home, and it of course all comes down to money. He says "when you can pay $3,000 a month, then we'll talk."

Does a $400,000 - $500,000 home really cost me $3,000 a month?? We'd do everything split down the middle, so would that mean $6,000 a month??

Couturegrl · Jan 28th, 2007, 02:50 PM

^I think it depends on the purchase price of the home and your credit rating. The higher your credit rating, the lower your interest will be on your home loan. Also, being able to put down 20% of the home's price is a good idea.

I don't own my own home yet (not finished with school...bleh!!) but hopefully some of the other ladies on the forum can help you out with exact costs, etc.

It might be helpful if you posted the general area you want to live in (Example: living in LA is lots more $$ than, say, Texas), the industry/job you will be in, the size home you want, etc. That way they can narrow it down a bit for ya.

Good luck! :)

lorihmatthews · Jan 28th, 2007, 04:10 PM

There's a ton more to owning a home than just the mortgage payment. If you pay less than 20% down, you'll have to pay PMI costs (private mortgage insurance), and that can cost several hundred dollars on top of your payment monthly. Also you'll need to figure in homeowner's insurance. Then you'll need to maintain the exterior. If you live in a place that has snow, you'll need to keep up with it, whether you do it yourself or have someone to the maintenance for you. In the summer, it's the grass and fall it's the leaves. And what will the property taxes be? This will be several thousand dollars annually.

Then you'll also need to factor in Murphy's Law. You'll need to absorb costs when the furnace goes out, the refrigerator dies or the basement floods. The unexpected costs are what can really put you under.

So absolutely, this endeavor can cost you $3K/month. If you're wanting to do some research on your own, try going to Realtor.com. They have listings and also calculators that can help you out. Good luck!

Swanky Mama Of Three · Jan 28th, 2007, 04:13 PM

^she's right, there's a TON of extra $ that goes along w/ owning.
insurance, maintenance, property taxes, etc. . . .

lorihmatthews · Jan 28th, 2007, 04:22 PM

Quote:

Originally Posted by Adore

Well, we have been talking about owning a home, and it of course all comes down to money. He says "when you can pay $3,000 a month, then we'll talk."

Another thought: this quote from your BF makes me think he is definitely not ready to own a home yet (with you or by himself) which is why he gave you that $3K number.

Adore · Jan 28th, 2007, 04:24 PM

Yeah that's what he meant-- all together, not just the mortgage. And of course we're not ready right now, but a year+ from now-- I'm not out of college yet and have $0! After 7 years together, other than that, yea we're pretty damn ready

I had no idea it was really actually around that much, but I mean $3,000+ all together? Because then it would be half whatever for the both of us and things like that. I'm just curious how soon it can actually be. A year from now would be nice, but I think it might have to be longer so we can put money down... =\ I would imagine that is a better thing to do... it seemed so possible before but I didn't think it cost that much, to be honest. I never had to really think about it I guess until now that I'm getting closer to graduating college.

Swanky Mama Of Three · Jan 28th, 2007, 05:12 PM

where do you live?
If you'll be buying a home in an area w/ very high property taxes, $3k is possible. . . but it really depends on how much you put down.
Chances are unless you live in a very expensive home w/ high taxes it wouldn't be $6k.

I won't say #s but our home is considered very expensive and we live in an area where our property taxes were about $30k this year. . . we don't spand $6k/month. . . but we also have close to 90% of our home paid off.

marietouchet · Jan 28th, 2007, 05:15 PM

It is worse than that you also need

- about 10-20 % downpayment
- closing costs - variable - but maybe $5000
- figure on 1-2 % just to maintain the place every year (new roof, furnace, appliances - whatever wears out)
- annual tax and insurance payments - but those might be included in the monthly payments already
- boocoo to "make the place yours"eg ditch the horrid carpet, get color coordinated towels, new countertops whatever, the list is endless

Christiflora · Jan 28th, 2007, 05:24 PM

House expenses:
Adore, I do not know where you live. Judging from the $400,000-$500,000 price for 1st home, I would guess that your property tax would be at least $1000 per month for a $500K home. Then, there are utilities: gas, electricity, grabage pick up, water and sewage, lawn mantenance, telephone, cable, internet, snow shoveling, and etc, about $400 monthly. Did we forget house insurance (add $50 per month)? Assuming minimum 20% down, (and thus no PMI insurance) and 6% fixed rate interest for a $400K mortgage, the monthly mortgage payment is $2,400. Total = $1000 + $450 +$2,400 = $3,850.
Where do you intend to buy a home?

Expected Salaries:
$60K-$80K is the above-average range for starting salaries (BS degree with no work experience). It is reasonable for engineering and finance jobs in the east/west coast area. $50K sounds reasonable averages for other industries/fields and in other locations.
In which industry will you be seeking jobs? What location?

You are very wise for thinking about purchasing a home early to take advantage of the income tax deductions.

Adore · Jan 28th, 2007, 09:23 PM

Blaah.... it sounds so impossible! I was hoping my boyfriend was wrong, haha.
We talked about it more today and he mentioned the lists of things to consider that you all posted. He said something else though that I didn't know about which was not mentioned: credit. I don't think I have bad credit... (?) I have student loans... own my car... and I have credit cards that all total beyond maybe $15,000 limit, and I am holding a balance of about $3,000 on one of them, the others have nothing. I don't know if that matters! But I figure if it's something to get figured out, then now would be good.

I don't know... maybe a year from now is unreasonable. The houses around here are typically $280,000-$500,000 for just your average house, east coast. Some are obviously more but I mean in any neighborhood, not the patches of the more expensive houses that there are here and there in each town kind of.

Virgo · Jan 28th, 2007, 10:17 PM

The other members gave you some good points to consider but I'd also like to say don't be in such a rush to get a house. Why not rent for a year and focus on your new career? It would lessen your stress load and give you time to figure out what you realistically afford. Not sure if you already do, but you may want to live with BF in a rental prior to making a huge financial commitment with him. HTH.

Christine · Jan 28th, 2007, 10:22 PM

Again.. where do you live?

Adore · Jan 28th, 2007, 10:40 PM

I live in Massachusetts, but we don't want to rent... or at least, I used to want to, but now I'm considering against it only because for the two of us to get a house, the money I'd put into rent (I'd either live with him, which he won't rent, or alone-- I don't want roommates and things like that) would go towards nothing to own... it would be nice, but I would rather put it towards things we'd need for a house, because it would add up.
I don't think there's anything wrong with renting an apartment, but... it really is just that, to rent versus to own our own house. I suppose the difference in that would be time being number one, and two, just the whole bit with responsibilities and upkeep and unexpected things that we'd have to fix and not a landlord or something.

Christine · Jan 28th, 2007, 10:52 PM

Quote:

Originally Posted by Adore

I live in Massachusetts, but we don't want to rent... or at least, I used to want to, but now I'm considering against it only because for the two of us to get a house, the money I'd put into rent (I'd either live with him, which he won't rent, or alone-- I don't want roommates and things like that) would go towards nothing to own... it would be nice, but I would rather put it towards things we'd need for a house, because it would add up.
I don't think there's anything wrong with renting an apartment, but... it really is just that, to rent versus to own our own house. I suppose the difference in that would be time being number one, and two, just the whole bit with responsibilities and upkeep and unexpected things that we'd have to fix and not a landlord or something.

Renting and saving (as others have mentioned) is not a bad thing. I did this for a while and managed to save up 20 percent down for my home so am now making up for the rent by not paying PMI and a low interest rate.

Having said that I live in a far less expensive state than you (Texas) so it was pretty easy for me (it's understandibly harder to save up 20 percent on a 500K home.. mine was significantly less). Have you considered relocating to somewhere less expensive? (no, not necessarily Texas - lol). Good luck!!!

lorihmatthews · Jan 28th, 2007, 11:57 PM

Another thing to think about: if you and/or boyfriend lose a job -- do you have savings to cover the mortgage? If not, you need to have 3-6 months in savings to cover yourself. It would be a good idea to pay off your credit cards first.

Also, with regard to your credit score, it's easy to find out. Go to myfico.com and purchase it online. There are 3 credit bureaus, and each one costs about $15. This way you'll have a good starting point.

Jan 28th, 2007, 02:08 PM	#1
Adore Member Location: USA	Does owning a home really cost this much per month?! I'm getting out of college in a year from now! My job will I think pay $60-$80,000 a year? That could be off, or maybe after experience, but we'll just say, starters would be... $45,000 to be safe though I've been told my my academic advisor it would start at 60-80. My boyfriend makes maybe $50,000 a year, and maybe more by a year from now, I don't know. Well, we have been talking about owning a home, and it of course all comes down to money. He says "when you can pay $3,000 a month, then we'll talk." Does a $400,000 - $500,000 home really cost me $3,000 a month?? We'd do everything split down the middle, so would that mean $6,000 a month??

Jan 28th, 2007, 02:50 PM	#2
Couturegrl Addicted to Tiffany's Location: Arizona	Re: Does owning a home really cost this much per month?! ^I think it depends on the purchase price of the home and your credit rating. The higher your credit rating, the lower your interest will be on your home loan. Also, being able to put down 20% of the home's price is a good idea. I don't own my own home yet (not finished with school...bleh!!) but hopefully some of the other ladies on the forum can help you out with exact costs, etc. It might be helpful if you posted the general area you want to live in (Example: living in LA is lots more $$ than, say, Texas), the industry/job you will be in, the size home you want, etc. That way they can narrow it down a bit for ya. Good luck! :) __________________ Chihuahua (and Chihuahua Mix!!) Snob Only 1 out of 10 dogs born ever get a home. Only 1 out of 12 cats born ever find a home. 800 dogs & cats are KILLED each HOUR in the U.S. because there are not enough homes for them. Spay and neuter your pets! Do NOT buy dogs from pet stores...rescue, rescue, rescue! Help save a life at www.dogsindanger.com

Jan 28th, 2007, 04:10 PM	#3
lorihmatthews Persian Love Location: San Francisco	Re: Does owning a home really cost this much per month?! There's a ton more to owning a home than just the mortgage payment. If you pay less than 20% down, you'll have to pay PMI costs (private mortgage insurance), and that can cost several hundred dollars on top of your payment monthly. Also you'll need to figure in homeowner's insurance. Then you'll need to maintain the exterior. If you live in a place that has snow, you'll need to keep up with it, whether you do it yourself or have someone to the maintenance for you. In the summer, it's the grass and fall it's the leaves. And what will the property taxes be? This will be several thousand dollars annually. Then you'll also need to factor in Murphy's Law. You'll need to absorb costs when the furnace goes out, the refrigerator dies or the basement floods. The unexpected costs are what can really put you under. So absolutely, this endeavor can cost you $3K/month. If you're wanting to do some research on your own, try going to Realtor.com. They have listings and also calculators that can help you out. Good luck!

Jan 28th, 2007, 04:13 PM	#4
Swanky Mama Of Three Location: Dallas Area	Re: Does owning a home really cost this much per month?! ^she's right, there's a TON of extra $ that goes along w/ owning. insurance, maintenance, property taxes, etc. . . . __________________ Holy inappropriateness!!! - a la Bethenny

Jan 28th, 2007, 04:24 PM	#6
Adore Member Location: USA	Re: Does owning a home really cost this much per month?! Yeah that's what he meant-- all together, not just the mortgage. And of course we're not ready right now, but a year+ from now-- I'm not out of college yet and have $0! After 7 years together, other than that, yea we're pretty damn ready I had no idea it was really actually around that much, but I mean $3,000+ all together? Because then it would be half whatever for the both of us and things like that. I'm just curious how soon it can actually be. A year from now would be nice, but I think it might have to be longer so we can put money down... =\ I would imagine that is a better thing to do... it seemed so possible before but I didn't think it cost that much, to be honest. I never had to really think about it I guess until now that I'm getting closer to graduating college. Last edited by Adore; Jan 28th, 2007 at 04:28 PM.

Jan 28th, 2007, 05:12 PM	#7
Swanky Mama Of Three Location: Dallas Area	Re: Does owning a home really cost this much per month?! where do you live? If you'll be buying a home in an area w/ very high property taxes, $3k is possible. . . but it really depends on how much you put down. Chances are unless you live in a very expensive home w/ high taxes it wouldn't be $6k. I won't say #s but our home is considered very expensive and we live in an area where our property taxes were about $30k this year. . . we don't spand $6k/month. . . but we also have close to 90% of our home paid off. __________________ Holy inappropriateness!!! - a la Bethenny

Jan 28th, 2007, 05:15 PM	#8
marietouchet Member Location: au delà des cinq mers	Re: Does owning a home really cost this much per month?! It is worse than that you also need - about 10-20 % downpayment - closing costs - variable - but maybe $5000 - figure on 1-2 % just to maintain the place every year (new roof, furnace, appliances - whatever wears out) - annual tax and insurance payments - but those might be included in the monthly payments already - boocoo to "make the place yours"eg ditch the horrid carpet, get color coordinated towels, new countertops whatever, the list is endless __________________ from the famous Hermes scarf - Cheval de Smiley

Jan 28th, 2007, 05:24 PM	#9
Christiflora Member	Re: Does owning a home really cost this much per month?! House expenses: Adore, I do not know where you live. Judging from the $400,000-$500,000 price for 1st home, I would guess that your property tax would be at least $1000 per month for a $500K home. Then, there are utilities: gas, electricity, grabage pick up, water and sewage, lawn mantenance, telephone, cable, internet, snow shoveling, and etc, about $400 monthly. Did we forget house insurance (add $50 per month)? Assuming minimum 20% down, (and thus no PMI insurance) and 6% fixed rate interest for a $400K mortgage, the monthly mortgage payment is $2,400. Total = $1000 + $450 +$2,400 = $3,850. Where do you intend to buy a home? Expected Salaries: $60K-$80K is the above-average range for starting salaries (BS degree with no work experience). It is reasonable for engineering and finance jobs in the east/west coast area. $50K sounds reasonable averages for other industries/fields and in other locations. In which industry will you be seeking jobs? What location? You are very wise for thinking about purchasing a home early to take advantage of the income tax deductions.

Jan 28th, 2007, 09:23 PM	#10
Adore Member Location: USA	Re: Does owning a home really cost this much per month?! Blaah.... it sounds so impossible! I was hoping my boyfriend was wrong, haha. We talked about it more today and he mentioned the lists of things to consider that you all posted. He said something else though that I didn't know about which was not mentioned: credit. I don't think I have bad credit... (?) I have student loans... own my car... and I have credit cards that all total beyond maybe $15,000 limit, and I am holding a balance of about $3,000 on one of them, the others have nothing. I don't know if that matters! But I figure if it's something to get figured out, then now would be good. I don't know... maybe a year from now is unreasonable. The houses around here are typically $280,000-$500,000 for just your average house, east coast. Some are obviously more but I mean in any neighborhood, not the patches of the more expensive houses that there are here and there in each town kind of.

Jan 28th, 2007, 10:17 PM	#11
Virgo Member	Re: Does owning a home really cost this much per month?! The other members gave you some good points to consider but I'd also like to say don't be in such a rush to get a house. Why not rent for a year and focus on your new career? It would lessen your stress load and give you time to figure out what you realistically afford. Not sure if you already do, but you may want to live with BF in a rental prior to making a huge financial commitment with him. HTH. __________________ Virgo

Jan 28th, 2007, 10:22 PM	#12
Christine Back in 5 minutes..	Re: Does owning a home really cost this much per month?! Again.. where do you live?

Jan 28th, 2007, 10:40 PM	#13
Adore Member Location: USA	Re: Does owning a home really cost this much per month?! I live in Massachusetts, but we don't want to rent... or at least, I used to want to, but now I'm considering against it only because for the two of us to get a house, the money I'd put into rent (I'd either live with him, which he won't rent, or alone-- I don't want roommates and things like that) would go towards nothing to own... it would be nice, but I would rather put it towards things we'd need for a house, because it would add up. I don't think there's anything wrong with renting an apartment, but... it really is just that, to rent versus to own our own house. I suppose the difference in that would be time being number one, and two, just the whole bit with responsibilities and upkeep and unexpected things that we'd have to fix and not a landlord or something.

Jan 28th, 2007, 11:57 PM	#15
lorihmatthews Persian Love Location: San Francisco	Re: Does owning a home really cost this much per month?! Another thing to think about: if you and/or boyfriend lose a job -- do you have savings to cover the mortgage? If not, you need to have 3-6 months in savings to cover yourself. It would be a good idea to pay off your credit cards first. Also, with regard to your credit score, it's easy to find out. Go to myfico.com and purchase it online. There are 3 credit bureaus, and each one costs about $15. This way you'll have a good starting point.