Reply to What monthly PITI would you be comfortable with?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]$2500 PITI[/quote]

sounds about right to me too.[/quote]

I think 2500 is the conservative amount.  Run one of those mortgage estimators to figure out ballpark what is the top of your range that a bank would lend you.  Then to find the true number, look at your budget, what do you spend on groceries, gas, utilities (bump this up for the house), cell phone, amd tv/inertnet/home phone.  Then add insurance like car, outside life Insurance (we both have 1.2 million, 20 year term policies cheaper than group life at work for the coverage amounts and had to get disability insurance for one of us outside work), and personal property insurance.   Assuming you don't want to reduce that spending subtract that from your available net income.

Next look at what savings you want to maintain/do outside of 401K.  For example your general saving should cover 4-6months salary.  You probably want to save something for car replacements, not sure if you put big downpayments, plan to pay in cash, or have a 500-700/month car note etc.  Are you going to save for college?  Do you have money set aside/will set aside for home repairs and improvements at least for the necessary like new roof, new HVAC, new washer and dryer and desires like eventually updating the bathroom or kitchen.  There is some flexibility you just want to make sure you still can save beyond retirement savings with the house and for something like a must do house repair you have cash on hand when needed.

I think where people are the most open to trimming is for things like vacation(s), buying furniture, services like cleaning or lawn, and eating out.

Last thing is looking at how much you are looking at spending on mortgage PITA and how much you spend in general and run it thru the what if scenarios.  What if parents can't watch the child (health reasons, if you have a second it is too much) or one person loses his/her job.  Do you feel like between savings and where you can tighten your belt you would be okay?  If you cut your spending to the bone and lock in to an expensive mortgage, there may not be much that can be cut should something happen.  [/quote]

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