Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I work in foreclosures I daily see people with 700K mortgages getting thrown out of their homes despite their 250K salaries. Looking at people's financials, most can at MOST sustain their expenses for 3 months after a job loss. Overwhelming all of these people losing their homes have kids. They are digging into their retirements just to stay aflot. I think people severely underestimate what happens when someone gets sick or loses their job, only to have to take one for less money.

People get crushed with taxes, utilities, and a certain lifestyle they are maintaining. They are living a lie, lying to themselves and eveyone else.

Being in banking, truly, the solid people taking out 700K mortgages actually have incomes in the mid 500s, few and far between do we see people riding the edge of their front and back end ratios. You are certainly NOT in the majority if you have a sub 300K income and a 700K mortgage, you are the exception to the norm.

you do not work in banking. this post is a lie.

Agreed. i don't believe that for a second. Plus, he/she can't spell "afloat"

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:the key thing, to me, is not so much the income to debt ratio. lenders are pretty conservative now, and they are still approving loans for those ratios. those ratios are very doable. You have plenty of money to live off after housing costs. The worry is if you lose your job, but that is a worry for most no matter the income or house cost.

The key things are (i) putting enough money down, (ii) getting super low interest rates, (iii) having a stable job and (iv) having cash savings for 6 months plus. If you do those things, then you are fine.

Exactly, 100% right.

I would add buying a house at those price-points putting a premium on location matters if you ever need to sell your home quickly due to job loss or change in circumstances, i.e. the 2500 square-footer for 900k in N Arlington will probably turn over faster than the 10,000 sq foot mansion in Chantilly for the same price.

We've had a few friends in close-in desirable areas who needed to relocate quickly and were able to sell their homes in these price ranges very quickly over the last couple years-- and yes they were all sub-300 folks.

Anonymous wrote:

Anonymous wrote:the key thing, to me, is not so much the income to debt ratio. lenders are pretty conservative now, and they are still approving loans for those ratios. those ratios are very doable. You have plenty of money to live off after housing costs. The worry is if you lose your job, but that is a worry for most no matter the income or house cost.

The key things are (i) putting enough money down, (ii) getting super low interest rates, (iii) having a stable job and (iv) having cash savings for 6 months plus. If you do those things, then you are fine.

Exactly, 100% right.

Anonymous wrote:the key thing, to me, is not so much the income to debt ratio. lenders are pretty conservative now, and they are still approving loans for those ratios. those ratios are very doable. You have plenty of money to live off after housing costs. The worry is if you lose your job, but that is a worry for most no matter the income or house cost.

The key things are (i) putting enough money down, (ii) getting super low interest rates, (iii) having a stable job and (iv) having cash savings for 6 months plus. If you do those things, then you are fine.

Anonymous wrote:Also think about it this way. Once you reach a certain income spending 40-50% on housing isn't that big of a deal.

If I make 100k a year spending 50% of my housing would leave me only 50k to live off of.

If I have 250k a year spending 50% of my income would leave me 125k a year to live on.

Anonymous wrote:

Anonymous wrote:I work in foreclosures I daily see people with 700K mortgages getting thrown out of their homes despite their 250K salaries. Looking at people's financials, most can at MOST sustain their expenses for 3 months after a job loss. Overwhelming all of these people losing their homes have kids. They are digging into their retirements just to stay aflot. I think people severely underestimate what happens when someone gets sick or loses their job, only to have to take one for less money.

People get crushed with taxes, utilities, and a certain lifestyle they are maintaining. They are living a lie, lying to themselves and eveyone else.

Being in banking, truly, the solid people taking out 700K mortgages actually have incomes in the mid 500s, few and far between do we see people riding the edge of their front and back end ratios. You are certainly NOT in the majority if you have a sub 300K income and a 700K mortgage, you are the exception to the norm.

you do not work in banking. this post is a lie.

Anonymous wrote:I work in foreclosures I daily see people with 700K mortgages getting thrown out of their homes despite their 250K salaries. Looking at people's financials, most can at MOST sustain their expenses for 3 months after a job loss. Overwhelming all of these people losing their homes have kids. They are digging into their retirements just to stay aflot. I think people severely underestimate what happens when someone gets sick or loses their job, only to have to take one for less money.

People get crushed with taxes, utilities, and a certain lifestyle they are maintaining. They are living a lie, lying to themselves and eveyone else.

Being in banking, truly, the solid people taking out 700K mortgages actually have incomes in the mid 500s, few and far between do we see people riding the edge of their front and back end ratios. You are certainly NOT in the majority if you have a sub 300K income and a 700K mortgage, you are the exception to the norm.

Anonymous wrote:Also think about it this way. Once you reach a certain income spending 40-50% on housing isn't that big of a deal.

If I make 100k a year spending 50% of my housing would leave me only 50k to live off of.

If I have 250k a year spending 50% of my income would leave me 125k a year to live on.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
A sub.300k income and 700k mortgage is irresponsible

What an ignorant blanket statement to make. Come on.

Agree- an assessment about what's financially prudent depends on a careful evaluation of an individual household's finances.

Given the high housing costs in the DC area, a front-end ratio (percentage of gross monthly income to housing costs, standard measure to assess financial eligibility for mortages) of 28-33% is entirely reasonable. Assuming it works with your back end ratio (% to total debt obligations), a sub-300k household can responsibly service a mortage of 700k.

A 30 year fixed jumbo at 3.875 would yield a PITI payment of around $4050 which could potentially be affordable to household incomes well below $300k assuming low levels of other debt.

If you are not comfortable with it then you're lucky no one is going to force you to take out a mortgage of that size. I work alongside plenty of professionals with 200-300k HHIs with $700k range mortgages. Most of them have one or more graduate degrees and are in professions with very low unemployment levels and have long-term income growth potential- they are perfectly responsible in taking on mortgage debt of this size after they have been carefully vetted by a lender.

Anonymous wrote:

Anonymous wrote:
A sub.300k income and 700k mortgage is irresponsible

What an ignorant blanket statement to make. Come on.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
A sub.300k income and 700k mortgage is irresponsible

What an ignorant blanket statement to make. Come on.

What is ignorant is a sub 300k income and a 700k mortgage. However avearge Americans are not exactly known for making sound financial decisions.As illustrated by all of the short sales and foreclosures.