How much should we budget for buying a home
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.
That's a lot of monthly expenses
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.
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.
Which places in East Bay. You might be able to find in Mountain House in range of 500 to 600k
We are looking at Oakland, Hayward and San Leandro
I would avoid mountain house if you work in the Bay Area. There is at least Livermore to try before resorting to that.
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.
We're looking specifically in Oakland, Hayward, San Leandro.
two people 6k expense and no mortgage? wow.
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.
Here I was thinking we were conservative. Guess not.
Updated my post with our monthly spend.
Budget too low. You won't get anything below 500k in bay area
Your monthly spending seems just fine for two people. 6k is not exorbitant. Obviously you’re no Dave Ramsay or anything but not like you’re spending every nickel either. But 500k is too low for the areas you’re looking. There are still over bids in those places so you will need to account for that and stretch your budget to at least 800k. You can punch in the numbers to a loan calculator to decide if you can afford it.
650-700K is enough for those areas
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.
Good point updated it with our down payment info