What kind of TC should one have to buy 2milion house?
Have about 900k after tax in stocks or cash. #mortgage #housing #sanfrancisco #newark
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So the “rule” is that housing shouldn’t exceed 28% of your gross monthly income, and your total debts (credit card/utilities/loan repayments/any recurring monthly costs like school for kids/etc) Shouldnt exceed 36% of your gross monthly income (gross is pretax).
Im a very pessimistic immigrant so I typically calcúlate affordability for things based on guaranteed comp vs variable comp (bonus, stock grants, commission).
My personal opinion is that for a 2M house, your guaranteed (salary) income should be combined 450-500k a year, depending on what other debts you have.
The benefit of calculating this way is that you’ll never be in any trouble - you’ll have your stock/bonus money as a really solid cushion in case a recession hits and times get hard for 12-18 months
But to your point they also care about investment accounts, other assets, money in the bank, FICO score, etc. But TC is a huge factor.