How much should we budget for buying a home

Jan 12 44 Comments

My SO and I (no kids) are looking at purchasing our first home together in the East Bay. We're looking in the 400-500 range but not having good luck getting what we want.

Our real estate agent told us to come back with the absolute max we would spend on a house. Realistically we could increase the budget but we are two very conservative spenders.

Our finances are:

My TC 110K
SO TC 150K
Monthly expenses (grocery, credit card, rent, car etc) 6K
Savings for down payment 100K

What's the absolute most we should increase our budget to? Please give reasoning.

Edit*** monthly budget break down

$2500 rent
$200-300 grocery
$200 bills
$300 car + gas + tolls
$1000 travel - we travel almost monthly for fun. Probably will reduce this soon.
$500 - charity.

Our monthly expenses range from 4k-6k a month.


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TOP 44 Comments
  • New HXwF46
    That's a lot of monthly expenses
    Jan 12 9
    • Indeed fGVu77
      OP
      Yea we try to reduce where we can but right now our rent is $2500. Then we have to help out family and pay bills so it adds up .
      Jan 12
    • Roku pikman
      Childcare alone is like 2k/kid
      Jan 12
  • Facebook LkTh38
    You should spend some time on Zillow getting an idea of what is realistic for home prices and styles in that area. Then see if you can afford that range.

    Your current budget seems to fit your income / savings level. If you want a one bedroom condo, you have a shot in that budget, but anything else will be tough at the moment.
    Jan 12 0
  • Cisco / Eng
    f=ma_

    Cisco Eng

    BIO
    Hands on developer, hardworking, leader, influencer, extremely committed to work, like to learn new things, level head in times of pressure
    f=ma_more
    Budget too low. You won't get anything below 500k in bay area
    Jan 12 2
    • BlackRock LTB
      The OP said East Bay. At $500k I'm assuming they are looking at Bay Point/Pittsburg/Antioch.
      Jan 16
    • Cisco / Eng
      f=ma_

      Cisco Eng

      BIO
      Hands on developer, hardworking, leader, influencer, extremely committed to work, like to learn new things, level head in times of pressure
      f=ma_more
      For me East Bay ends at Dublin... Those 3 places you said is the south of another bay 😋😏
      Jan 16
  • Gracenote 0ddba11
    I too was in similar situation couple ago. Ended up buying 3 story SFH in Dublin for 900k. We did 10% down, 10% HELOC rest Jumbo mortgage

    U can get older SFH in Dublin/Plstn in 850k to 950k. Three story townhouses go for about 900k now.
    Jan 12 1
    • Indeed fGVu77
      OP
      We're looking specifically in Oakland, Hayward, San Leandro.
      Jan 13
  • Your total TC let say is about 250k, assuming thats guranteed money. Then usually people buy about 2.5 times their salary so you should be able to afford like 650 to 700k easily. Assuming you guys have stable job. If you are SWE you should not have any problem getting jobs and raise.
    Jan 12 3
    • Amazon SnLeandro
      And afforded*
      Jan 13
    • Indeed fGVu77
      OP
      Thank you. Finally someone with a helpful answer!
      Jan 13
  • Microsoft usernameOo
    two people 6k expense and no mortgage? wow.
    Jan 12 2
    • Intel / Legal
      Esq.

      Intel Legal

      BIO
      JD Esq.
      Esq.more
      Agree. OP needs to explain so we can truly help. Assume rent for SFBA is $2-3k so what is the other $3-4k? $1000 for cars? $500 a week for food? These numbers for two young DINKs doesnt scream "conservative spenders" as claimed. Think OP needs to use YNAB to break down budget and tighten up. 500k housing budget in bay area is nothing. Can you even get a 1br condo for that? If so why even waste the money on that, keep renting and save for a house.
      Jan 12
    • Indeed fGVu77
      OP
      Here I was thinking we were conservative. Guess not.
      Jan 12
  • Depends on how much you have saved as a down payment. Also, I don’t factor in TC for my house payments. You don’t want to guarantee bonuses or stocks. Go off your salary, especially if you are conservative spenders, as you mentioned. Your TC is similar to my and my husbands salary. We spent a little over $750k on our house but we put almost $300k down.
    Jan 12 1
    • Indeed fGVu77
      OP
      Good point updated it with our down payment info
      Jan 12
  • Google kaikailee
    $500 charity that's really nice of you
    Jan 12 0
  • Wells Fargo angel32
    Which places in East Bay. You might be able to find in Mountain House in range of 500 to 600k
    Jan 12 4
    • ServiceNow mbot
      Why avoid Mountain House?
      Jan 12
    • Salesforce brHq56
      They are a DINK couple working in San Francisco. I imagine buying a house 3 commute hours away, no matter how nice, will take a massive toll on their lifestyle. The mountain house area is very uninteresting and only suits people who can really take that massive sacrifice of time or already work all the way out in that area like Tracy/Stockton.
      Jan 12
  • Confluent udTC08
    Biggest red flag here is thinking you can buy anything but a spot in a trailer park for $400-$500k. Get real.
    Jan 12 2
    • Indeed fGVu77
      OP
      There's decent places in East Bay from mid 300's.
      Jan 13
    • Confluent udTC08
      Anything listed for $300k is going to go for $500k to an all-cash buyer. Anything that doesn't is a spot in a trailer park where you don't own the land your "house" sits on.
      Jan 13

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