Budgeting 160K for newbs

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guano
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Re: Budgeting 160K for newbs

Postby guano » Sun Oct 13, 2013 7:11 pm

Anonymous User wrote:
guano wrote:
Anonymous User wrote:Where does saving for a down payment on a house fit into this? Paying rent continuously is not a good idea, as you growing NO equity!


I just realized thus wasn't addressed properly.

The above is a freaking retarded boomerism.
Renting is cheaper than buying and traditionally home appreciation tracks inflation. Doesn't mean buying is always wrong (homeowner here). But the above is a bad reason. Don't even think about buying unless you're committee to spending at a minimum the next 5 years there - 10+ would be better


Look at the Texas housing market before you jump to such illogical conclusions!

Yeah, cause housing booms are guaranteed to go up forever.

There are better ways to speculate in real estate

Edit I realize that wasn't what was being referred to.
The way mortgages and closing a work the value of the home needs to increase by about 10% to break even. This takes time.
Compare the purchase price to renting. If the purchase price is more than 15 times the annual rent, it's probably a bad idea.

Yes, these are broad statements and yes there are exceptions, but do the research
Last edited by guano on Sun Oct 13, 2013 7:17 pm, edited 1 time in total.

Anonymous User
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Re: Budgeting 160K for newbs

Postby Anonymous User » Sun Oct 13, 2013 7:12 pm

Anonymous User wrote:
guano wrote:
Anonymous User wrote:Where does saving for a down payment on a house fit into this? Paying rent continuously is not a good idea, as you growing NO equity!


I just realized thus wasn't addressed properly.

The above is a freaking retarded boomerism.
Renting is cheaper than buying and traditionally home appreciation tracks inflation. Doesn't mean buying is always wrong (homeowner here). But the above is a bad reason. Don't even think about buying unless you're committee to spending at a minimum the next 5 years there - 10+ would be better


Look at the Texas housing market before you jump to such illogical conclusions!


I was in Houston this summer, be careful buying right now, places are definitely going for a premium at the moment. We cant be sure how long this will last.

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mr. wednesday
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Re: Budgeting 160K for newbs

Postby mr. wednesday » Sun Oct 13, 2013 7:24 pm

Buying can be legit and I'm pro-homeownership for myself but it should be seen less like an investment and more like a lifestyle choice. There are closing costs in buying and selling, property tax, upkeep, plus lack of mobility and dependence on a market outside of your control to determine the value of your home without the ability to easily shift to another type of asset in a poor market. Maybe you make some smart/lucky decisions and come out ahead, maybe not. But I don't think the potential return is enough to make the added stress, inflexibility, and risk worth it as a pure investment. You have to actually want to own a home.

Florence Night
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Re: Budgeting 160K for newbs

Postby Florence Night » Sun Oct 13, 2013 7:29 pm

guano wrote:
Anonymous User wrote:Here is one example budget (switch investments for debts if your situation so requires / allows)

Pre-tax paycheck: $13,333 / month
401(k) contribution: $1,400 / month
Paycheck after taxes, health care, and benefits: $6,700 / month
Housing: $1,800 / month
Food + predictable necessities (utilities, etc.): $1,000 / month
Leftover: $3,900 / month for paying down debt, investments, vacations, moving expenses, models, bottles, lifestyle inflation, etc.

Many pay more for housing / food in major cities, plenty pay even less. Car/transportation/health care costs can be very situational.

I used to pay full price for healthcare. Ok coverage was about $700 a month for an individual, $1600 for a family. Cadillac plan cost about 1.5 times as much. My understanding is that Prices have gone up about 20-30% since then


Is this a mistake? What am I misunderstanding here? Premiums for a healthy young person can go for less than a couple hundred bucks per month.

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guano
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Re: Budgeting 160K for newbs

Postby guano » Sun Oct 13, 2013 7:37 pm

Florence Night wrote:
guano wrote:
Anonymous User wrote:Here is one example budget (switch investments for debts if your situation so requires / allows)

Pre-tax paycheck: $13,333 / month
401(k) contribution: $1,400 / month
Paycheck after taxes, health care, and benefits: $6,700 / month
Housing: $1,800 / month
Food + predictable necessities (utilities, etc.): $1,000 / month
Leftover: $3,900 / month for paying down debt, investments, vacations, moving expenses, models, bottles, lifestyle inflation, etc.

Many pay more for housing / food in major cities, plenty pay even less. Car/transportation/health care costs can be very situational.

I used to pay full price for healthcare. Ok coverage was about $700 a month for an individual, $1600 for a family. Cadillac plan cost about 1.5 times as much. My understanding is that Prices have gone up about 20-30% since then


Is this a mistake? What am I misunderstanding here? Premiums for a healthy young person can go for less than a couple hundred bucks per month.

Unsubsidized? Not in my neck of the woods.
If your insurance through work is less than $200/month, odds are your employer is picking up part of the tab.

Florence Night
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Re: Budgeting 160K for newbs

Postby Florence Night » Sun Oct 13, 2013 7:49 pm

guano wrote:
Florence Night wrote:
guano wrote:
Anonymous User wrote:Here is one example budget (switch investments for debts if your situation so requires / allows)

Pre-tax paycheck: $13,333 / month
401(k) contribution: $1,400 / month
Paycheck after taxes, health care, and benefits: $6,700 / month
Housing: $1,800 / month
Food + predictable necessities (utilities, etc.): $1,000 / month
Leftover: $3,900 / month for paying down debt, investments, vacations, moving expenses, models, bottles, lifestyle inflation, etc.

Many pay more for housing / food in major cities, plenty pay even less. Car/transportation/health care costs can be very situational.

I used to pay full price for healthcare. Ok coverage was about $700 a month for an individual, $1600 for a family. Cadillac plan cost about 1.5 times as much. My understanding is that Prices have gone up about 20-30% since then


Is this a mistake? What am I misunderstanding here? Premiums for a healthy young person can go for less than a couple hundred bucks per month.

Unsubsidized? Not in my neck of the woods.
If your insurance through work is less than $200/month, odds are your employer is picking up part of the tab.


Maybe we have different definitions of what "ok coverage" is. I buy direct from the insurance co and 700/month is unfathomable to me (healthy 20-something non-smoker)....Granted, I'm not on either coast; maybe that has something to do with it? Not sure.

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Tiago Splitter
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Re: Budgeting 160K for newbs

Postby Tiago Splitter » Sun Oct 13, 2013 8:01 pm

Florence Night wrote:Maybe we have different definitions of what "ok coverage" is. I buy direct from the insurance co and 700/month is unfathomable to me (healthy 20-something non-smoker)....Granted, I'm not on either coast; maybe that has something to do with it? Not sure.

Nah you're right. $200-$300 will get you a good plan at e-health insurance's website, or at least it would a few years ago when I had to buy my own insurance.

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guano
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Re: Budgeting 160K for newbs

Postby guano » Sun Oct 13, 2013 8:04 pm

Tiago Splitter wrote:
Florence Night wrote:Maybe we have different definitions of what "ok coverage" is. I buy direct from the insurance co and 700/month is unfathomable to me (healthy 20-something non-smoker)....Granted, I'm not on either coast; maybe that has something to do with it? Not sure.

Nah you're right. $200-$300 will get you a good plan at e-health insurance's website, or at least it would a few years ago when I had to buy my own insurance.

Man, it sucks to be me. I couldn't find anything around those prices when I looked (5 years ago?)

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Tiago Splitter
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Re: Budgeting 160K for newbs

Postby Tiago Splitter » Sun Oct 13, 2013 8:07 pm

guano wrote:
Tiago Splitter wrote:
Florence Night wrote:Maybe we have different definitions of what "ok coverage" is. I buy direct from the insurance co and 700/month is unfathomable to me (healthy 20-something non-smoker)....Granted, I'm not on either coast; maybe that has something to do with it? Not sure.

Nah you're right. $200-$300 will get you a good plan at e-health insurance's website, or at least it would a few years ago when I had to buy my own insurance.

Man, it sucks to be me. I couldn't find anything around those prices when I looked (5 years ago?)

I just looked and the prices in NY are outrageously high. Don't know if that was always the case but $700 might not be far off. A few years ago when I was out of work for a little while I just wanted catastrophic coverage and only had to pay like $30/month, but the cheapest one I could find here in NY is $158.

EDIT: Cheapest plans in my old zip code are $43, so I guess the state really does make a difference.

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guano
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Re: Budgeting 160K for newbs

Postby guano » Sun Oct 13, 2013 9:12 pm

Tiago Splitter wrote:
guano wrote:
Tiago Splitter wrote:
Florence Night wrote:Maybe we have different definitions of what "ok coverage" is. I buy direct from the insurance co and 700/month is unfathomable to me (healthy 20-something non-smoker)....Granted, I'm not on either coast; maybe that has something to do with it? Not sure.

Nah you're right. $200-$300 will get you a good plan at e-health insurance's website, or at least it would a few years ago when I had to buy my own insurance.

Man, it sucks to be me. I couldn't find anything around those prices when I looked (5 years ago?)

I just looked and the prices in NY are outrageously high. Don't know if that was always the case but $700 might not be far off. A few years ago when I was out of work for a little while I just wanted catastrophic coverage and only had to pay like $30/month, but the cheapest one I could find here in NY is $158.

EDIT: Cheapest plans in my old zip code are $43, so I guess the state really does make a difference.

LOLJersey

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kalvano
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Re: Budgeting 160K for newbs

Postby kalvano » Sun Oct 13, 2013 10:53 pm

Anonymous User wrote:
guano wrote:
Anonymous User wrote:Where does saving for a down payment on a house fit into this? Paying rent continuously is not a good idea, as you growing NO equity!


I just realized thus wasn't addressed properly.

The above is a freaking retarded boomerism.
Renting is cheaper than buying and traditionally home appreciation tracks inflation. Doesn't mean buying is always wrong (homeowner here). But the above is a bad reason. Don't even think about buying unless you're committee to spending at a minimum the next 5 years there - 10+ would be better


Look at the Texas housing market before you jump to such illogical conclusions!


I own a home in the Texas market. Buying isn't a great idea, nor is it a terrible idea. It's more a choice you make when you're tired of living in an apartment or townhome. Housing prices within the city (Dallas) are pretty expensive, so renting is usually a much less expensive option. I wouldn't recommend anyone in their early 20's in Dallas be thinking about buying a home.

Great use of anon, bee tee dubs.

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unc0mm0n1
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Re: Budgeting 160K for newbs

Postby unc0mm0n1 » Mon Oct 14, 2013 2:15 am

kalvano wrote:
Anonymous User wrote:
guano wrote:
I just realized thus wasn't addressed properly.

The above is a freaking retarded boomerism.
Renting is cheaper than buying and traditionally home appreciation tracks inflation. Doesn't mean buying is always wrong (homeowner here). But the above is a bad reason. Don't even think about buying unless you're committee to spending at a minimum the next 5 years there - 10+ would be better


Look at the Texas housing market before you jump to such illogical conclusions!


I own a home in the Texas market. Buying isn't a great idea, nor is it a terrible idea. It's more a choice you make when you're tired of living in an apartment or townhome. Housing prices within the city (Dallas) are pretty expensive, so renting is usually a much less expensive option. I wouldn't recommend anyone in their early 20's in Dallas be thinking about buying a home.

Great use of anon, bee tee dubs.


What about outside of Dallas? I may be working outside of Dallas and the prices in places like Richardson or Plano look amazing. For ~300K you can get a pretty nice place. I mean like 4 Bedrooms, 4 bathrooms, big backyard and inground swimming pool.

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kalvano
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Re: Budgeting 160K for newbs

Postby kalvano » Mon Oct 14, 2013 7:14 am

Yeah, prices outside of Dallas are pretty good. But then you're in suburbia, which would be unpleasant for a young and single person. Prices a little further out are even better.

For Texas, make sure to keep in mind the rather high property taxes, which can almost double your mortgage payment.

And pools sound nice in theory, but tend to be very expensive. And they break on a regular basis because the soil around here is so dry and it shifts, causing cracks in the pool. Expect to fix that every few years.

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unc0mm0n1
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Re: Budgeting 160K for newbs

Postby unc0mm0n1 » Mon Oct 14, 2013 12:31 pm

kalvano wrote:Yeah, prices outside of Dallas are pretty good. But then you're in suburbia, which would be unpleasant for a young and single person. Prices a little further out are even better.

For Texas, make sure to keep in mind the rather high property taxes, which can almost double your mortgage payment.

And pools sound nice in theory, but tend to be very expensive. And they break on a regular basis because the soil around here is so dry and it shifts, causing cracks in the pool. Expect to fix that every few years.


Great point. It does look nice though but I can't even swim so I don't think the pool is a necessity. Kalvano since you know a lot about the personal finance can you answer a question for me. If I move down there I'll have enough for a decent down payment (~40K). I'm also a vet so I qualify for a VA loan. The VA does have a funding fee that decreases with larger down payments. For a no money down loan the fee is 2.15% of the cost of the house, %5-10% down loan the fee is 1.5%, and 10%+ is 1.25%. Assuming I get a 300K mortgage do you think it would be better to use money as a down payment or invest the money.

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ScottRiqui
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Re: Budgeting 160K for newbs

Postby ScottRiqui » Mon Oct 14, 2013 12:43 pm

kalvano wrote:
For Texas, make sure to keep in mind the rather high property taxes, which can almost double your mortgage payment.


They're high, but to have your combined property taxes come close to your mortgage would require doing something strange like putting 50% down on your house and choosing to finance the rest over 30 years.

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unc0mm0n1
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Re: Budgeting 160K for newbs

Postby unc0mm0n1 » Mon Oct 14, 2013 2:22 pm

ScottRiqui wrote:
kalvano wrote:
For Texas, make sure to keep in mind the rather high property taxes, which can almost double your mortgage payment.


They're high, but to have your combined property taxes come close to your mortgage would require doing something strange like putting 50% down on your house and choosing to finance the rest over 30 years.


Yeah I checked some places near Dallas and for 300K home it's like 525/month. Which isn't Ideal but would be acceptable. I'm not sure what the taxes in Dallas are like.

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guano
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Re: Budgeting 160K for newbs

Postby guano » Mon Oct 14, 2013 2:33 pm

ScottRiqui wrote:
kalvano wrote:
For Texas, make sure to keep in mind the rather high property taxes, which can almost double your mortgage payment.


They're high, but to have your combined property taxes come close to your mortgage would require doing something strange like putting 50% down on your house and choosing to finance the rest over 30 years.

Here in northern NJ they run 2-4% of the assessed value of the home; in my case more than half my mortgage payment

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ScottRiqui
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Re: Budgeting 160K for newbs

Postby ScottRiqui » Mon Oct 14, 2013 2:53 pm

guano wrote:
ScottRiqui wrote:
kalvano wrote:
For Texas, make sure to keep in mind the rather high property taxes, which can almost double your mortgage payment.


They're high, but to have your combined property taxes come close to your mortgage would require doing something strange like putting 50% down on your house and choosing to finance the rest over 30 years.

Here in northern NJ they run 2-4% of the assessed value of the home; in my case more than half my mortgage payment


In Texas, they run from 2-3%. When you say that property taxes are more than half of your mortgage payment, do you mean that the taxes are more that half as large as your mortgage payment (such as $500 tax / $900 mortgage), or that more than half of everything you pay each month is property tax (such as $1000 tax, $900 mortgage)?

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kalvano
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Re: Budgeting 160K for newbs

Postby kalvano » Mon Oct 14, 2013 3:01 pm

My total monthly payment is about $1380. Of that, my actual mortgage is only about $750. My tax rate is about 2.7% of assessed value. Dallas proper is a little lower.

I'll get back to the other questions later on.

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guano
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Re: Budgeting 160K for newbs

Postby guano » Mon Oct 14, 2013 6:33 pm

kalvano wrote:My total monthly payment is about $1380. Of that, my actual mortgage is only about $750. My tax rate is about 2.7% of assessed value. Dallas proper is a little lower.

I'll get back to the other questions later on.

Proportionally I'm about the same

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ScottRiqui
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Re: Budgeting 160K for newbs

Postby ScottRiqui » Mon Oct 14, 2013 7:06 pm

guano wrote:
kalvano wrote:My total monthly payment is about $1380. Of that, my actual mortgage is only about $750. My tax rate is about 2.7% of assessed value. Dallas proper is a little lower.

I'll get back to the other questions later on.

Proportionally I'm about the same


I must be having a math fail or something, then. Because if that $1380 is just mortgage and property tax, then that's $630/month in property taxes nd $750/month for the mortgage. At a 2.7% rate, the property tax corresponds to an assessed value of $280,000. But the $750 mortgage payment is more in line with a $165-170k loan (assuming a 3.5%, 30-year fixed mortgage).

So I'm back to not understanding how someone's property tax can be almost as much as their mortgage, unless the home is wildly overappraised compared to the selling price, or they put down something like a 40% down payment.

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kalvano
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Re: Budgeting 160K for newbs

Postby kalvano » Mon Oct 14, 2013 7:23 pm

ScottRiqui wrote:
guano wrote:
kalvano wrote:My total monthly payment is about $1380. Of that, my actual mortgage is only about $750. My tax rate is about 2.7% of assessed value. Dallas proper is a little lower.

I'll get back to the other questions later on.

Proportionally I'm about the same


I must be having a math fail or something, then. Because if that $1380 is just mortgage and property tax, then that's $630/month in property taxes nd $750/month for the mortgage. At a 2.7% rate, the property tax corresponds to an assessed value of $280,000. But the $750 mortgage payment is more in line with a $165-170k loan (assuming a 3.5%, 30-year fixed mortgage).

So I'm back to not understanding how someone's property tax can be almost as much as their mortgage, unless the home is wildly overappraised, or they put down something like a 40% down payment.


Built into the payment is about $70 a month in MIP, which I can almost get rid of. There is also about $143 a month for homeowner's insurance, which is dirt cheap for Texas. If you don't qualify for USAA, then it will likely be a lot more. My home is appraised around $185K, and the actual property taxes run about $5K a year. I guess I should have been more specific (I was trying to do it on my phone) but what I meant was the actual payment that includes taxes, homeowner's insurance, and MIP if required will close to double the actual mortgage payment. I've been paying it long enough that I think of my total escrow payment as simply "taxes." But there's no getting around insurance, which is stupidly expensive in Texas thanks to deregulation and common hailstorms and tornadoes and such.

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ScottRiqui
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Re: Budgeting 160K for newbs

Postby ScottRiqui » Mon Oct 14, 2013 7:31 pm

Thanks makes sense - thanks. And yeah, I know what you mean about the hailstorms. I had a car damaged in a Texas hailstorm once. The insurance adjuster said it was right on the borderline for being totaled, so I could elect to have it fixed if I wanted. I asked him what it would take to fix it, and when he got to "cut off the roof and weld on a new one", I told him to just total it.

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kalvano
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Re: Budgeting 160K for newbs

Postby kalvano » Mon Oct 14, 2013 7:41 pm

I had State Farm run a quote on my homeowner's insurance and it was almost double what USAA is charging me. A reasonable expectation for that would likely be over $3000.

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Re: Budgeting 160K for newbs

Postby Anonymous User » Mon Oct 14, 2013 8:15 pm

kalvano wrote:I had State Farm run a quote on my homeowner's insurance and it was almost double what USAA is charging me. A reasonable expectation for that would likely be over $3000.


I used to love USAA and would recommend all my troops get them but they have changed considerably. their credit products are terrible, auto loans are not competitive unless you have a 750+ CS, I saved nearly a $400 per six months by switching to Geico on car insurance and their Cd rates are low. I haven't tried their home insurance but as a whole I think you can do better than USAA for almost everything else.




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