Base 181k Bonus 30k Stock 40k per year or so Single no kids no divorce How much should I consider spending for a house that I buy?
I just googled your question and literally dozens of calculators came up.
Talk to a loan officer. They will give you the ceiling number. In general, save for 20% down payment. Pick a number and calculate the mortgage amount online. Move the number up or down according to what you can afford. Once you know the monthly payment number, you should have that times 6 as reserve. (401k, stocks, liquid, etc). Note that the mortgage payment is sum of loan payment + property tax of the home. The property tax and interest that you pay on the loan are tax exempt.
I disagree with kwueu. considering you are a first time home buyer I believe you should always start with small. You can always upgrade, but not so easy to downgrade. My thumb rule is no more than 1/4th of your take-home should go towards your house emi (including taxes) for 30 year fixed. I did the same and pretty happy with the decision so far
With that mentality you can never buy a home in Bay Area
assuming a 30 yr loan ?
I have low expenses (2-3 k a month)
@superuser has a good rule of thumb. Another one is 3x your salary. So for you it would be 543k house
I do have 1M or so in stocks and 401k although after taxes that number is more like 650k
Less than the bank is willing to lend you is a good start. Banks do not have your best financial health interest in mind. Percentage of income guides only work if your budget is “typical”. I would say if you’re completely debt free (no credit cards or loans) then you can afford to spend much more on house payments than others who have debt for example (even if you both have the same “disposable” income). My advice (50 years old and bought/sold 6 houses around he country as we’ve moved for jobs) is to get as much house as your comfortable with for payments on a 15 year fixed interest loan. Most important point is the 15 year loan (not 30). Why? In 30 year loan, you typically pay back to the bank 100% of original loan amount in first 7 years. The rest is interest (which amounts to about 3x original loan amount if paid in full). 15 year mortgage will save you a bundle in interest and keep you from over extending on purchase price.
Could you please elaborate on how you define comfortable on 15 year mortgage ? What should be the maximum mortgage payments as a function of your take home pay ?
There are no houses within 6 mile radius (30 mins drive) of Intuit for my budget (800k or so). What should I do
Buy the most expensive one you can afford, don't check the price for 10years, you will be happy about your decision
Unless you did this in 2006 or 2007