Various financial advisors say, it should not exceed 30-40% of base. Would you agree? Should RSU be also included in this calculation? Been on the fence about housing and I am wondering if I should take the plunge. Asking because the bay area is quite different from the rest of America. 165 base + 100k RSU
I think 30-40% of just base pre tax, excluding rsu. You don't want to put too much pressure on the monthly bill. If one needs to sell rsu to cover mortgage, I would be nervous when the stock goes down.
According to some other posts, your mortgage should be half of the average rents in the Bay Area. Go figure how you're going to do that. For that income, go buy in Modesto or something and commute. /s
This recommendation is for people who: 1) buy organic food, candy, soda, alcohol, expensive forms of protein, and other unnecessary, but desired food items 2) have a gym membership 3) eat out 4) pay for entertainment 5) buy cloths and other non-essential things 6) pay for commute and car insurance 7) pay for cable tv 8) pay for unlimited mobile plan 9) have kids or relatives that require monthly expenses 10) pay a lot of taxes 11) contribute to 401k or other regular investments 12) have a car loan The bank will give you a loan as long as you are capable of paying âinterestâ and âtaxesâ portions of your mortgage with your base, you have had reliable sources of income for 2-3 most recent years that should help you cover the principal portion, and you have large cache reserves on hand (12 months of payments at least). Now, all things considered, your base salary will go up, the mortgage payment will stay the same (unless property taxes skyrocket), so it will get better eventually. Buy it if you can live a modest life for a year or two. Donât buy if you are an average Bay Area consumer that I described above.
Best to hide your savings, buy with very little down, and if the market tanks or you lose your job, file for bankruptcy.
Below 30%
Well, since you said âBay Areaâ. đ
36%
Outside the Bay Area, people in the top 10% of income discuss a somewhat different problem: how much of your net worth should be tied up on your house (generally the goal is < 20%). In the Bay Area, people on the extreme end of the spectrum talk the way lower middle class people talk elsewhere - no more than 30% of your income, etc. Really amazing how much wealth transfer happens here - in one pocket from tech companies (and indirectly, through dilution, investors) and out the other to landlords and real estate sellers. Crazy.
Do what you feel comfortable with. Will it be an investment or lifestyle choice? Do you have other debt or monthly expenses? Can be anywhere from 0 to over 100% of your take home.
âCan be anywhere from 0 to over 100% of your take home.â, said a genius.
Yep, most people don't realize this and assume 30 to 40% is the max. My first property was about 150% of my take home which again most folks fail to consider. Not sure that makes me a genius but gaurantee many folks fail to consider 100%.
I feel comfortable at a house that costs 3x yearly TC
Mobile homes then ?
Sounds like you need a referral, Workday