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Top things to know before buying a house

Mrs. dleeny Posted: Feb 13, 2006 04:31 PM+

Mrs. dleeny MEMBER SINCE: 3/05 TOTAL POSTS : 12387 WEDDING DATE: Nov 06, 2005

Posted: Feb 13, 2006 04:31 PM

Top things to know before buying a house

CNN Money link

#3 is so depressing!

diluvchu Posted: Feb 13, 2006 04:38 PM+

diluvchu MEMBER SINCE: 9/05 TOTAL POSTS : 2436 WEDDING DATE: May 05, 2006

Posted: Feb 13, 2006 04:38 PM

Re: Top things to know before buying a house

I like that list...I should provide that to a few people I know....

SomethingBlu Posted: Feb 13, 2006 04:43 PM+

SomethingBlu MEMBER SINCE: 10/04 TOTAL POSTS : 10523 WEDDING DATE: May 27, 2005

Posted: Feb 13, 2006 04:43 PM

Re: Top things to know before buying a house

Yup...seen it before and agree...this is a great list!

Blu-ize Posted: Feb 13, 2006 04:47 PM+

Blu-ize MEMBER SINCE: 8/04 TOTAL POSTS : 8304 WEDDING DATE: Feb 28, 1998

Posted: Feb 13, 2006 04:47 PM

Re: Top things to know before buying a house

great list....scary stuff though.

Beth1210 Posted: Feb 13, 2006 04:50 PM+

Beth1210 MEMBER SINCE: 6/05 TOTAL POSTS : 4059 WEDDING DATE: Dec 10, 2005

Posted: Feb 13, 2006 04:50 PM

Re: Top things to know before buying a house

:( Jake just informed me last night that I wont be getting my own house for 18 months to 2 years!

even if I find a good deal-

I kind of figured that anyway-everything I like is over $900K anyway- and not worth it -

Nina Posted: Feb 13, 2006 05:56 PM+

Nina MEMBER SINCE: 11/05 TOTAL POSTS : 11621 WEDDING DATE: Sep 03, 2007

Posted: Feb 13, 2006 05:56 PM

Re: Top things to know before buying a house

great list....sad..but great

DjPiLL Posted: Feb 14, 2006 11:24 AM+

DjPiLL MEMBER SINCE: 4/04 TOTAL POSTS : 4198 WEDDING DATE: May 28, 2005

Posted: Feb 14, 2006 11:24 AM

Re: Top things to know before buying a house

Posted by dleeny

CNN Money link

#3 is so depressing!

YES!

So many people buy way beyond their means! Remember the 28% rule. If your total housing payment is more than 28% of your gross income... you are buying out of your league.

Mrs. dleeny Posted: Feb 14, 2006 11:32 AM+

Mrs. dleeny MEMBER SINCE: 3/05 TOTAL POSTS : 12387 WEDDING DATE: Nov 06, 2005

Posted: Feb 14, 2006 11:32 AM

Re: Top things to know before buying a house

Posted by DjPiLL

Posted by dleeny

CNN Money link

#3 is so depressing!

YES!

So many people buy way beyond their means! Remember the 28% rule. If your total housing payment is more than 28% of your gross income... you are buying out of your league.

I thought it was based on net income.... ?

103005FallBride Posted: Feb 14, 2006 04:54 PM+

103005FallBride MEMBER SINCE: 2/05 TOTAL POSTS : 7249 WEDDING DATE: Oct 30, 2005

Posted: Feb 14, 2006 04:54 PM

Re: Top things to know before buying a house

Great article Dina! Thanks for posting! One to keep on file for the future!

DjPiLL Posted: Feb 14, 2006 06:03 PM+

DjPiLL MEMBER SINCE: 4/04 TOTAL POSTS : 4198 WEDDING DATE: May 28, 2005

Posted: Feb 14, 2006 06:03 PM

Re: Top things to know before buying a house

Posted by dleeny
I thought it was based on net income.... ?

No its always gross income for the mortgage calculators.

Mrs. dleeny Posted: Feb 14, 2006 08:04 PM+

Mrs. dleeny MEMBER SINCE: 3/05 TOTAL POSTS : 12387 WEDDING DATE: Nov 06, 2005

Posted: Feb 14, 2006 08:04 PM

Re: Top things to know before buying a house

Posted by DjPiLL

Posted by dleeny
I thought it was based on net income.... ?

No its always gross income for the mortgage calculators.

that's strange... since you don't see a lot of that $$, it should not be factored into what you can afford. JMO

Meaghan729 Posted: Feb 14, 2006 08:39 PM+

Meaghan729 MEMBER SINCE: 1/06 TOTAL POSTS : 2456 WEDDING DATE: Jul 29, 2007

Posted: Feb 14, 2006 08:39 PM

Re: Top things to know before buying a house

Posted by DjPiLL

Posted by dleeny
I thought it was based on net income.... ?

No its always gross income for the mortgage calculators.

Yep - gross income.

Mrs. dleeny Posted: Feb 14, 2006 08:58 PM+

Mrs. dleeny MEMBER SINCE: 3/05 TOTAL POSTS : 12387 WEDDING DATE: Nov 06, 2005

Posted: Feb 14, 2006 08:58 PM

Re: Top things to know before buying a house

Posted by Meaghan729

Posted by DjPiLL

Posted by dleeny
I thought it was based on net income.... ?

No its always gross income for the mortgage calculators.

Yep - gross income.

well if that's the case, we can 'afford' way more than we thought. but honestly, I would rather base what I can afford on what we actually take home and can spend.

Blu-ize Posted: Feb 14, 2006 09:11 PM+

Blu-ize MEMBER SINCE: 8/04 TOTAL POSTS : 8304 WEDDING DATE: Feb 28, 1998

Posted: Feb 14, 2006 09:11 PM

Re: Top things to know before buying a house

that's the key-you have to feel comfortable with the finances. Don't let a mortgage calculator talk you into anything. You have to be ok with the money and comfortable spending it!

We based our decisions on our take home pay. We used the calculators as a guide.

DjPiLL Posted: Feb 15, 2006 03:43 PM+

DjPiLL MEMBER SINCE: 4/04 TOTAL POSTS : 4198 WEDDING DATE: May 28, 2005

Posted: Feb 15, 2006 03:43 PM

Re: Top things to know before buying a house

Posted by dleeny

Posted by DjPiLL

Posted by dleeny
I thought it was based on net income.... ?

No its always gross income for the mortgage calculators.
that's strange... since you don't see a lot of that $$, it should not be factored into what you can afford. JMO

Its not strange.

You pay mortgage interest and property taxes with GROSS income. Not net.

Mrs. dleeny Posted: Feb 15, 2006 04:07 PM+

Mrs. dleeny MEMBER SINCE: 3/05 TOTAL POSTS : 12387 WEDDING DATE: Nov 06, 2005

Posted: Feb 15, 2006 04:07 PM

Re: Top things to know before buying a house

Posted by DjPiLL

[Its not strange.

You pay mortgage interest and property taxes with GROSS income. Not net.

how do you mean?

Blu-ize Posted: Feb 15, 2006 04:20 PM+

Blu-ize MEMBER SINCE: 8/04 TOTAL POSTS : 8304 WEDDING DATE: Feb 28, 1998

Posted: Feb 15, 2006 04:20 PM

Re: Top things to know before buying a house

Posted by dleeny

Posted by DjPiLL

[Its not strange.

You pay mortgage interest and property taxes with GROSS income. Not net.

how do you mean?

What he probably means is that you are using your mortgage interest and property taxes as a deduction and should see a large part of that back so it's actually net income.

snowprincess805 Posted: Feb 15, 2006 04:20 PM+

snowprincess805 MEMBER SINCE: 4/04 TOTAL POSTS : 1936 WEDDING DATE: Aug 13, 2005

Posted: Feb 15, 2006 04:20 PM

Re: Top things to know before buying a house

because your interest is a decution on your taxes which lowers the tax you owe

Mrs. dleeny Posted: Feb 15, 2006 04:22 PM+

Mrs. dleeny MEMBER SINCE: 3/05 TOTAL POSTS : 12387 WEDDING DATE: Nov 06, 2005

Posted: Feb 15, 2006 04:22 PM

Re: Top things to know before buying a house

got it, thanks.

which brings me to this question...

what percentage of the interest you pay on your mortgage and property taxes do you actually get back from Uncle Sam?

25%, 50%, all of it?

TIA

DjPiLL Posted: Feb 15, 2006 06:57 PM+

DjPiLL MEMBER SINCE: 4/04 TOTAL POSTS : 4198 WEDDING DATE: May 28, 2005

Posted: Feb 15, 2006 06:57 PM

Re: Top things to know before buying a house

Posted by dleeny

got it, thanks.

which brings me to this question...

what percentage of the interest you pay on your mortgage and property taxes do you actually get back from Uncle Sam?

25%, 50%, all of it?

TIA

Whatever your tax bracket happens to be. For most people... its around 15-20%.

This is the easy way to look at it. You pay mortgage interest and taxes with gross income.

So lets say your household makes 100k a year gross. You have 8k in property taxes and about 15k of mortgage interest a year. That gets paid with gross income... so after you pay these two... you are actually making about 77k a year and thats what you are taxed on.

So in the end... you are lowering the amount of tax you owe to the government because you are lowering your taxable income.

This is why all the calculators take gross salary.