How do you afford

I live in the area in a TH and hope to move to a bigger SF home at some point with the family getting bigger. I'm always curious with the housing prices in the area, what kind of household situation and mortgage budget owners of single family homes are willing to take on. I know that this can be a sensitive question to some and can completely understand if you don't want to answer, but if it's not would appreciate some insight in terms of:

- single or dual income (husband, wife, or both)
- household gross annual income
- loan amount and monthly payment

 

We moved from a TH to a SFH almost 7 years ago. At the time, townhouses were going for about $150,000 to $200,000 less than single family homes. It's probably about the same now. We noticed that, even with the real estate market fluctuations, the differences in prices remained the same. We had to make the decision to take on the higher payments in exchange for more space and a yard.

We rolled in all the appreciation from the sale of the townhouse into the single family home. Had we stayed in the townhouse, we could have definitely survived on one income. Since the move, it would be very tight to not have the second income.

I think it really depends on your personal financial situation and what you're comfortable paying.

 

do you have and do you stick to a monthly budget now? That is the best way to answer this question for yourself as you can't compare your situation to others.

Our story: when we were renting, we developed a budget to save for a down payment on our first house. We had to push hard to save and there's always a need for some flexibility. By going through that experience for a year+, we knew what mortgage payments we could live with, what amount was out of our reach, etc. In addition, going through this allowed us to prioritize what was important to us -- both work versus one, vacations, auto purchases, etc. Only you can make these decisions and in turn, determine the best way for you to "make the move." I wouldn't base my biggest purchase in life on what other's have done, but on what I know I can do.

 

I think it also depends on how much you plan to put down and what area of Blands, as prices vary on SFHs in the neighborhood. Remember to look at past tax records of the property you are interested in purchasing as well as the increase to your homeowners insurance.

In our situation we had a very healthy nest egg (based on the sale of our former TH) which we applied towards our current SFH mortgage. We budgeted our mortgage on a single income, partly because we knew that we would be starting a family and I would most likely stay home. That said we were lucky enough to put down a large amount and it eliminated the PMI (2ndary mortage if you elect to not put down 20%).

Also I would look into loan rates from Credit Unions. Case in point we went with USAA and qualified for a much lower interest rate. Partly because we have multiple insurance packages with them as well as several banking/savings accounts. I hope this helps.

 

It does not matter too much what you "think" you can budget and afford... and what comfort you have... You will not get there unless you can fit into a certain formula and have a certain credit background.

Anyone who is seriously thinking about getting a mortgage - I would suggest talking to a mortgage broker or loan officer. With credit harder to get get these days, you will need a decent debt to income ratio. If you can not qualify for a traditional mortgage you may be able to get an FHA loan, with a higher interest rate.

I think the benchmark banks are looking for is between 38% - 42% for debt to income ratio. Above that, I would think it is hard to qualify these days. And I think the typical family would have a hard time living on a budget with a mortgage payment that takes up 50% to 55% of your income.

It can be done but I am just saying that it would be hard to get a loan with those conditions. We would have a hard time living on 1 income now while trying to save for retirement, college and doing things like family vacations etc.

 

I also forgot to add - I would also factor in the following for budgetary purposes:
HOA dues (based on what area of the neighborhood they vary from $78-$250+, the $250 mark applies towards courtyard style homes in SouthernWalk)
Increase in utilities
Furniture budget
Account for general upkeep (such as painting, caulking, windows and/or an aging HVAC system or appliances)

 

I think that banks are still pretty tight with credit. I'm guessing they're still looking for a 32% mortgage to gross income ratio.

Example: If you gross $105,000 a year, then your monthly mortgage payment (principal, interest, and possibly escrow amounts) - should be under $2,800 [105,000x.32/12].

And don't forget those wonderful Loudoun County Property taxes.

 

I'm not sure this is what he is looking for?

From a previous post of his: "I live nearby in Loudoun Valley Estates and licensed in mortgages/refinance, investments, mutual funds, IRAs/401K rollovers, annuities, and term/permanent insurance."

 

Fishing... OR informal marketing survey!

 

If you go to my website you will find a bunch of stats on any area. From population density to average house hold income. Follow this link and plug in any zip code.

There is also a mortgage prequalification calculator.

Hope you find that helpful.

Happy New Year,
Steve Campot
Real Estate Broker
www.sgcrealestate.com

 

I didn't take the post as advertising. In fact, I found it very interesting and useful. Seems a little bit of an over reaction to me. In fact, I just came back to get another look at the link, and it was censored. Sure would be nice to get it back.

 

He is an advertiser on our main HOA web page so if you go to the main page and click on the top logo you will be able to navigate to the same information again.

Staci

 

Sounds good thanks. Jeez, what a way to treat those who support the operation. I still don't think he was advertising.

 

I appreciate your support but it is a fine line. While I was trying to be helpful I can see how it may have come across as advertising. Formadmin does a great job and volunteers a huge amount of his time.

Thanks again and I will PM those links to you and any one else who would like them.

Thanks
Steve Campot
Real Estate Broker
www.sgcrealestate.com

 

Mr. Linux, I've been here long enough to know that. I also know if I push this any farther I'll get banned, I've learned my lesson from before. Carry on, and thank you for reminding me of the rules. This is the last you'll here from me on this subject, I promise. And I apologize for any issues I may have caused.

 

What have you done with the REAL AFGM?!?!