Reply to The seven paths to DC-area home ownership

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]$156K is a good salary for the region. $375k on that salary is too conservative. Even with a 5% mortgage and 0 down, 30 year fixed on that is $2k a month. Add in 350 for taxes and insurance and you are looking at only 18% debt to income ratio, *FAR* shy of the 28%-33% ratio that most people subscribe to. Using 28% as a ratio, your "affordability" figure jumps to about $580k, which can buy you a nice townhome in Fairfax, or even a single family in some of the older but still nice neighborhoods like Burk.

I am not a Realtor, just someone who has done enough of these types of calculations to know when people are over/under extending themselves. [/quote]

you're out of your damn mind[/quote]

Your calculations are confusing me - are you confusing gross and net? Because we make about what OP and spouse do, and after taxes/insurance etc. on our take-home, a mortgage of "only" $2350/month comes pretty damn close to being 33%.

Being conservative is really tough in this area, but it is definitely a positive thing and not one to necessarily advise against. [/quote]

Not the PP, but the 28-33% recommendations are of gross income, not net.

I guess by your list we were house poor--we bought our house for $475k, with $50k down when our combined income was about $140K. Never had the slightest problem making the mortgage payment and still were putting money in savings each month. We had minimal student debt (scholarships and state schools)and no kids though, and since we were on upward income trajectories we were used to not spending large amounts of money. Interest rates were a lot higher then though--so we were paying more per month than you would be on an equivalent size mortgage now.

Some people would probably also sneer at our house (3 bedrooms, 1360 sq feet, very small yard) and/or our neighborhood (Alexandria City) but we can walk to tons of stuff, only need one car, are metro accessible, and like the local elementary school--so we feel pretty good about it even if others might consider it undesirable.
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