How can I afford a 1.5m dollar home in the Bay Area?
My wife and I are shopping around for homes in the Bay Area. We have settled on the type of home and neighborhoods we want and they are priced at around $1,500,000. Assuming a 20% down payment, I am looking at ~$7,500/month PITI for a 1.5m dollar home. What is the minimum TC if I want to afford such a home and not be house broke? Answers from those who have recently purchased a ~1.5m dollar home would be greatly appreciated! TC: 350k
When you say 1/3 your mortgage, do you mean the loan value (i.e. 80% of the price of the house in my situation)?
Yes, but I‘d like some clarification to make sure I am understanding this correctly.
2 year pre tax income is the max
So you need 750k that's too much, what if you are single?
buy 1.5million u need 750k combined tc
b.s.
google it.
bing it.
duck duck...hmm. That’s kind of awkward to say.
You can buy that with 200K TC
Of course with 80% down!
I dont disagree with being conservative given current market. A couple years ago buy a house 5-6x TC is normal.
Your monthly mortgage will be around $6100 and property taxes $1500 per month. So the $7500 you had is right. That would be $90k per year. Your debt cannot be more than 38% of your TC. So your TC should be $210k per year. To be safe $220k per year.
38% gross or net?
That’s post tax. So $400k gross. At least.
Move to Austin, you can get it for 500K double the size. Invest your cash on others and live the American dream. Bay Area is only for folks who wanna enjoy their retirement unless you make 400K+
What’s the Bay Area retirement logic ?
Bay Area for retirement? Not a chance. Get out of CA if you are living on a fixed income and outside of the low income class. This state has so many neverending ways of sucking money from its residents.
Just rent.
Even more than what you listed, except if that’s all base. That’s if you only want to spend 1/3 post tax.