Reply to What can I afford with 210K joint income and $300K down payment?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Why not calculate how much of a mortgage would give you a $2600 payment?[/quote]

This would be stupid. The tax breaks associated with the mortgage would push this to around $3,500 or so, easily, and be economically equal.[/quote]

I disagree, housing costs are more than just a mortgage, there are property taxes, repairs, renovations.  I think figuring out what you can afford based on a $2600 mortgage is a good starting point. [/quote]

Well, the $3,500 figure I gave there assumes principal, interest and taxes. The interest and taxes throw off tax deductions. Assume around $33,600 a year in deductions. Plus, they get to deduct any state and local income taxes and charitable donations, so call it $45,000 in tax deductions, all in. At the 28% tax bracket, this is a tax savings of $12,600 a year. So call that $1,000 a month. So, yeah, my $3,500 figure is perfectly in line with $2,600 in rent....

Repairs are a good point -- should budget an extra 1% of home value a year for repairs/maintenance, including landscaping.

But I wouldn't include "renovations" in regular housing costs. Those would be capital improvements, presumably performed if and when they have other resources.

The other factor in this is other than increases due to property taxes, their payment will now be fixed, while rents rise.[/quote]

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