KillJoy Posted February 8, 2011 Report Share Posted February 8, 2011 why the fuck should i have to pay more than the average joe for federal or state taxes??. ..... because you are short. KillJoy Quote Link to comment Share on other sites More sharing options...
KillJoy Posted February 8, 2011 Report Share Posted February 8, 2011 IMO-if your yearly Gross could not pay off your house, you should not be in the house. I have never heard this, and know of NO ONE who falls into this category. KillJoy Quote Link to comment Share on other sites More sharing options...
AWW$HEEET Posted February 8, 2011 Report Share Posted February 8, 2011 I have never heard this, and know of NO ONE who falls into this category. KillJoy +1111 Quote Link to comment Share on other sites More sharing options...
nurkvinny Posted February 8, 2011 Report Share Posted February 8, 2011 +1111 Agreed. 2.5x is more a norm. Quote Link to comment Share on other sites More sharing options...
KillJoy Posted February 8, 2011 Report Share Posted February 8, 2011 Agreed. 2.5x is more a norm. Yeah... I have always "heard" 3 year gross income = Home Mortgage. KillJoy Quote Link to comment Share on other sites More sharing options...
kirks5oh Posted February 8, 2011 Report Share Posted February 8, 2011 ..... because you are short. KillJoy rofl. Quote Link to comment Share on other sites More sharing options...
wnaplay1647545503 Posted February 8, 2011 Report Share Posted February 8, 2011 No job for 2 years and spending it all faster than it comes in. Quote Link to comment Share on other sites More sharing options...
evan9381 Posted February 8, 2011 Report Share Posted February 8, 2011 Yeah... I have always "heard" 3 year gross income = Home Mortgage. KillJoy sounds about right. when i bought my house i was at about 2 years gross income, second year i was here about 1.6 years. im just glad i bought my house on what i could afford on my hourly income, and didnt factor in any monthly bonus, since they were never guaranteed. i could have bought a house 2x as much, but if i had a month with no bonus, or 2-3 months without, i'd be fucked. Quote Link to comment Share on other sites More sharing options...
Nitrousbird Posted February 8, 2011 Report Share Posted February 8, 2011 yeah, then i won't be able to claim the loan interest. this is the first year that i've worked a whole year at my current job. staring at my W2 makes me sick to my stomach to think of the money i've paid in taxes this year---and the fact that i won't see anything for that money. why the fuck should i have to pay more than the average joe for federal or state taxes?? i understand what that money goes to (improving infrastructure, police/fire/public service salaries, etc.)--am i entitled to use those services more, if i pay more for them?? can i veer my car into the 'coned off' lane of an unfinished freeway 6 months before they open that lane to the rest of the public?? can't deduct student loans, can't deduct interest on a new car. bullshit. I feel your pain. Just like if you sell any stocks, they will tax the shit out of that if you made any money, but you can only offset that with selling other stock at a loss. Yet if you lose your ass selling stocks and don't make any selling, you are just SOL. Flat tax is the only fair tax. Because I make 2x what someone else does shouldn't mean I pay in 3x as many taxes. You could deduct interest on a new car if you take a home equity loan out and use that money to purchase the car. The only reason I even purchased my first house was because I was raped so badly in taxes the previous year that I was desperate for a deduction! Quote Link to comment Share on other sites More sharing options...
Got-Boost? Posted February 8, 2011 Report Share Posted February 8, 2011 So i have been working realy hard to pay off my bills. I have had 7300 in debt ( 1700 was credit cards) in 2010. By march i will be paying off the remaining amount of 5700. This has been a burden for my life in 2010, i am excited to see this go away and i did it all without touching my savings account. now its time to start making double payments on my car and get that paid off as well. who else has paid down or off unnecessary debt this year? Congrats OP! Good to see people taking control of there life/debt and planning for the future, not the minute! http://www.columbusracing.com/forums/../ubb/cool.gif Maxing out 401, two roth ira's, and college funds for kids each month You might want to check into your Roth's, if you make over $177k ($179k in 2011) you are out of luck on a Roth IRA... http://www.columbusracing.com/forums/../ubb/wink.gif I have never heard this, and know of NO ONE who falls into this category. KillJoy No, but it would be good practice for some people! I think he was just prepping for the "don't live outside your means speech!" j/k Quote Link to comment Share on other sites More sharing options...
coltboostin Posted February 8, 2011 Report Share Posted February 8, 2011 No he can't. There is an income cap on claiming school loan interest...I haven't got to claim mine for a couple years now. Luckily it will be paid off in a couple of months. Last I checked the limit is 70k single, 145k married you get nothing. They start reducing the deduction from 55k to 70k single, 115k to 145k married until you hit the nothing limit. Its a total finance (interest) charge, not just an income cap. And I dont believe the income cap is that high, but dont quote me. Quote Link to comment Share on other sites More sharing options...
coltboostin Posted February 8, 2011 Report Share Posted February 8, 2011 I have never heard this, and know of NO ONE who falls into this category. KillJoy Its MY personal rule of thumb, and lets be serious in Ohio its not that difficult. You have to realize I make my living on people not following this rule, and really doing everything they can in their power to live beyond their means. I don't mind people's lack on financial understanding. Quote Link to comment Share on other sites More sharing options...
Rotarded1647545491 Posted February 8, 2011 Report Share Posted February 8, 2011 (edited) Yeah... I have always "heard" 3 year gross income = Home Mortgage. KillJoy It's this line of thought that has placed us in the current housing mess. Banks and Builders have combined to fool the general public that someone making $30k a year can afford to finance a $200k house. I understand that the afore-mentioned numbers are on the extreme end and well out of the "3x" range, but it's the truth. Over the last 20 years it's been apparent, especially in Muirfield, that a large majority of people are mortgaged to the eyeballs, and when thier income dips even a small amount due to the economy, for sale signs pop up like mushrooms after a spring rain. These mid-managers reach $200k a year and buy a $400k house only to lose it within 3 years. My rule of thumb is that my mortgage payment will never exceed a two week gross paycheck, with a threshold of $2k a month, and/or for a total mortgage amount not to exceed 1/10th my total retirement savings, no matter what my current income level would be. Edited February 8, 2011 by Rotarded Quote Link to comment Share on other sites More sharing options...
coltboostin Posted February 8, 2011 Report Share Posted February 8, 2011 It's this line of thought that has placed us in the current housing mess. Banks and Builders have combined to fool the general public that someone making $30k a year can afford to finance a $200k house. I understand that the afore-mentioned numbers are on the extreme end and well out of the "3x" range, but it's the truth. Over the last 20 years it's been apparent, especially in Muirfield, that a large majority of people are mortgaged to the eyeballs, and when thier income dips even a small amount due to the economy, for sale signs pop up like mushrooms after a spring rain. These mid-managers reach $200k a year and buy a $400k house only to lose it within 3 years. My rule of thumb is that my mortgage payment will never exceed a two week gross paycheck, with a threshold of $2k a month, and/or for a total mortgage amount not to exceed 1/10th my total retirement savings, no matter what my current income level would be. I like the stance, and yes the 3xGross is a great laymans way to look at it. But- how can you stand on your soap box, then follow it up with My rule of thumb is that my mortgage payment will never exceed a two week gross paycheck, Your saying you'd put yourself in a 50% front end DTI scenario?! I see that as being doomed to fail. I could not even get something like that past underwriting unless you put 20% down and it was table funded! Quote Link to comment Share on other sites More sharing options...
AWW$HEEET Posted February 8, 2011 Report Share Posted February 8, 2011 agreed, 50% of gross is a trainwreck. 50% of net is still pushing it. Quote Link to comment Share on other sites More sharing options...
coltboostin Posted February 8, 2011 Report Share Posted February 8, 2011 Just for reference, most "good" rates cant be touched unless you are under 31% on the front end, the best under 24% (all borrowers combined) and 740+FICO. If your over 38%, you qualify (depending on lender and servicer) for the HAMP program, Obama's homeowner bailout that gets you to a 2% mortgage rate with some principal payoff. That means over 38% uncle Sam even sees you as being pretty fucked. Quote Link to comment Share on other sites More sharing options...
Got-Boost? Posted February 8, 2011 Report Share Posted February 8, 2011 My rule of thumb is that my mortgage payment will never exceed a two week gross paycheck, with a threshold of $2k a month, and/or for a total mortgage amount not to exceed 1/10th my total retirement savings, no matter what my current income level would be. WOW! That is crazy.... ....I always based it off of your mortgage being 25% or less of your take home pay. Quote Link to comment Share on other sites More sharing options...
Nitrousbird Posted February 8, 2011 Report Share Posted February 8, 2011 Its a total finance (interest) charge, not just an income cap. And I dont believe the income cap is that high, but dont quote me. There is the cap on how much interest you can claim and the income cap. Maybe the income cap is even lower - I just know I don't qualify. WOW! That is crazy.... ....I always based it off of your mortgage being 25% or less of your take home pay. Think about this. Let's say you take home $4000/month after taxes (which would also be after health insurance, 401k, etc.). You are telling me you should only have 1000/month or less for a home loan. You couldn't even buy a 200k home at that rate for 30 years @ 4.5%. Even if you save/invest 25% of your take home, WTF are you blowing 2k/month on? Quote Link to comment Share on other sites More sharing options...
Rotarded1647545491 Posted February 9, 2011 Report Share Posted February 9, 2011 (edited) I like the stance, and yes the 3xGross is a great laymans way to look at it. But- how can you stand on your soap box, then follow it up with Your saying you'd put yourself in a 50% front end DTI scenario?! I see that as being doomed to fail. I could not even get something like that past underwriting unless you put 20% down and it was table funded! I apologize, I was thinking of my own personal income (the 50%# i was referring to) without including my wife's income in as well (which is 2/3rds of mine in addition). 650mg of OXYCODONE every 4-6 hours will do that to you. Although we can live without want on the other 50%, which we did when when we were unemployed , not at the same time, for a total of 2.25 years within the last 5 years. I'm saying mortgage payment period. You were correct in that you are not taking into account is the percentage down, which I always put a significant % down, and always having savings that well exceed the amount of the loan (actually the value of house). This discussion has been predicated in the payment amount as a percentage of income, which is exactly the wrong way to look at it. What one really has to look at is how far they are LEVERAGED in the amount they owe on a house. You shouldn't focus as whether you can afford to make the monthly payments should your income collapse, but if you are positioned to protect your investment, and way of life, when it happens. My current situation: $40k down, $125k financed, Monthly payment <15% of monthly gross( nowhere NEAR $2k), House will be payed off in 17 years total (or 6.5 years from now) as I pay extra each month. Retirement and savings could pay off mortgage multiple times over after penalties and taxes. Should I want to upgrade to a $300k+ house, I would not leverage myself by financing all of it, just enough to keep all the parameters in line with my current status. Edited February 9, 2011 by Rotarded Quote Link to comment Share on other sites More sharing options...
Got-Boost? Posted February 9, 2011 Report Share Posted February 9, 2011 (edited) Think about this. Let's say you take home $4000/month after taxes (which would also be after health insurance, 401k, etc.). You are telling me you should only have 1000/month or less for a home loan. You couldn't even buy a 200k home at that rate for 30 years @ 4.5%. Even if you save/invest 25% of your take home, WTF are you blowing 2k/month on? No, I'm saying you need to make more money if you want that kind of home... $4k a month is about $60k a year so NO you can't afford it. $200k @ 4.5% with taxes is around $2k mo. You must not be a home owner. Lets go over basics: Water/trash $100 Electric $200 Gas $50 Phone/Cable/Internet $150 Groceries $400 ($100wk) Gas (car) $250 Cell $100 Car insurance $100 These are estimates of course: $1,350 just on BASICS! $2k + $1,350 = $650 left over for the month. Do you have a car financed? $300-400+ note? Now you are up to $3,600-3,800 out of your $4k! Plan to go out to dinner at all? Want to buy anything for the wife/girl/kids/yourself? What if something breaks on the house? Water heater, furnace, A/C, washer/dryer, furniture, etc? You aren't doing much with $200-300 left over a MONTH not including savings, spending money, entertainment, etc... That crap adds up quick so NO you can't afford it.... Edited February 9, 2011 by Got-Busa? Quote Link to comment Share on other sites More sharing options...
evan9381 Posted February 9, 2011 Report Share Posted February 9, 2011 Think about this. Let's say you take home $4000/month after taxes (which would also be after health insurance, 401k, etc.). You are telling me you should only have 1000/month or less for a home loan. You couldn't even buy a 200k home at that rate for 30 years @ 4.5%. Even if you save/invest 25% of your take home, WTF are you blowing 2k/month on? i gotta agree with most of what that guy that just responded to this said (except $2k/mo for a $200k home with taxes...at 4.5% a 200k loan would be $1013/mo with 0 down. taxes at 3% of value would be 6k/yr or $500/mo)...but i made $57k in 09...i just pulled up my W2, my take home pay after federal, soc sec, medicare, state, local, and medical/dental (and mind you, this is with no retirement contributions) was $40,210.80, or $1,546.57 if you look at it on an every 2 weeks basis, $3,350.90 if you look at it as 12 equal months, so im just under your example. so i was at 83.77% of the 4k you put down. how much was my mortgage? $713.xx, or 21.xx% of my take home pay, and i was comfortable with that. i wouldnt have felt comfortable with anything over maybe $825-$850. could i have pulled it off? probably, but its all about the "living within your means". not everyone needs a $200k house or a 4k sq/ft house on an acre+ in powell with 2 people and a couple dogs living in it. but talking about spending money in a month, lets think here...if i was at $3350.90 (and i'll figure some weekly/biweekly AND a monthly average mortgage - $713.xx/mo (now down to $667.xx after complaint of valuation) lets say $35-40/wk on lunch which is $151-$173/month (VERY easy to do, and i did it regularly, if not more. i probably could have gotten by on wendys value menu, but i preferred less shitty lunch. lol) groceries - we usually shopped every 2 weeks, spent $175-$200, split that in half (gf and i), thats $87.50-$100/wk or $189-$217 gas - maybe $75-100/month, more if i drive my SUV over my beater ass kia car insurance - $79/mo cell phone - $94/mo dinner out 2-3x a month might be $80-120, or more gym membership - $30/mo so thats right at $1526 alone. now, lets say i lived on my own, and my gf didnt cover the utilities. id have (at that time, cable is down a little since) $135 cable/internet bill $25/mo in water (lessening this if it was just me using it) billed every 3 months average on a year maybe $70/mo gas average on a year maybe $90/mo electricity up to >$1800 now throw in a car payment, we'll say $350/mo, a cheap(er) car, up to $2150 entertainment (bars with friends, etc), hobbies (shooting, cycling, i know you love boating, and im sure thats not cheap), vacations, house upkeep, pay the kids $20 every couple weeks to mow the lawn, repairs that need to be done or you want to have done, etc...all this will eat into that... so, could i have swung a larger mortgage payment? probably, but i also would have had to make cuts elsewhere so i could live the lifestyle i wanted to. it took me all my life up until about a year ago to realize i needed to save money incase the shit hit the fan. luckily i did, and when the shit did infact hit the fan in october and i got laid off, my spending habits didnt really change much. i still went out to the bar with friends a couple times a week, i still went out and had decent dinners a few times a month, i still did some home improvement projects Quote Link to comment Share on other sites More sharing options...
Got-Boost? Posted February 9, 2011 Report Share Posted February 9, 2011 You didn't factor taxes into your lower budget which is why I estimated the higher payment (3-4% down here in TX). $1k principal mortgage $700 taxes est.(4%) Not to mention if you don't have 20% down you normally have to have PMI which is a couple hundred. Depending on your community you've got HOA fees, home insurance, etc...the list goes on.... $2k isn't far off for $200k! Quote Link to comment Share on other sites More sharing options...
evan9381 Posted February 9, 2011 Report Share Posted February 9, 2011 You didn't factor taxes into your lower budget which is why I estimated the higher payment (3-4% down here in TX). $1k principal mortgage $700 taxes est.(4%) Not to mention if you don't have 20% down you normally have to have PMI which is a couple hundred. Depending on your community you've got HOA fees, home insurance, etc...the list goes on.... $2k isn't far off for $200k! i guess i see how you show it to be that much. Quote Link to comment Share on other sites More sharing options...
Nitrousbird Posted February 9, 2011 Report Share Posted February 9, 2011 No, I'm saying you need to make more money if you want that kind of home... $4k a month is about $60k a year so NO you can't afford it. $200k @ 4.5% with taxes is around $2k mo. You must not be a home owner. Lets go over basics: Water/trash $100 Electric $200 Gas $50 Phone/Cable/Internet $150 Groceries $400 ($100wk) Gas (car) $250 Cell $100 Car insurance $100 These are estimates of course: $1,350 just on BASICS! $2k + $1,350 = $650 left over for the month. Do you have a car financed? $300-400+ note? Now you are up to $3,600-3,800 out of your $4k! Plan to go out to dinner at all? Want to buy anything for the wife/girl/kids/yourself? What if something breaks on the house? Water heater, furnace, A/C, washer/dryer, furniture, etc? You aren't doing much with $200-300 left over a MONTH not including savings, spending money, entertainment, etc... That crap adds up quick so NO you can't afford it.... Actually, I own two homes...and your estimates are WAY off. 1st, if you make 60k a year, how are you bringing home $4,000? I mean maybe if you have good deductions, don't save anything in 401k, no health insurance, etc. But that's not realistic. Your property tax estimate is insane. No where in Ohio would you pay that kind of rate on a 200k home. In a nicer area of Columbus, 200k home is more like $3600/year. Let's add $1000/year insurnace on the home, and PMI on that 200k loan = $1500/month. Your utility average is high. My house is all electric (inefficient), and is bigger than most anything you are going to buy for 200k in Columbus, and I average $250/month. More realistic, gas/electric for the year is $150-$175 Water/trash are high too. We have a septic tank here with trash/water service, never averages more than $50/month. With sewage at my other home, never higher than $75/month, and that was with HEAVY useage. Keeping your other numbers, that puts you @ $2750/month. Leaving you $1250 for car payments, savings, and play money. Quote Link to comment Share on other sites More sharing options...
Got-Boost? Posted February 9, 2011 Report Share Posted February 9, 2011 I was basing it off your numbers for $4k take home (figured all that other stuff was already deducted in your estimate). Either way doesn't matter.....$4k take home is what it's based off of... Those are property taxes you can expect down here in Houston so that's the estimate I provided. Again, all depends on the house but they are estimates and even then they aren't far off what you would pay in Houston for the other stuff. So $1,250 left over. Married/girlfriend? Say you both have $20k cars.....$400ea X2 a month brings you down $450 left over. You've got to have insurance on both of them plus that means gas cost is going up, etc...etc... Still not a lot left over....you may be okay with that by I sure as heck am NOT living that strapped... Quote Link to comment Share on other sites More sharing options...
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