spiderman Posted January 19, 2006 Share Posted January 19, 2006 Looking to buy a townhome/duplex in the SW Chicago subuubs, and need some help! This is my first place, and I don't want to bite off more than I can chew from a financial standpoint. Anyone know of any affordable areas in the SW burbs that are also good neighborhoods, affordable taxes, etc ? ? ? I'll be on and off, so let me know if you need more info! Thanks for any help in advance as well! Quote Link to comment Share on other sites More sharing options...
Steff Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(spiderman @ Jan 18, 2006 -> 06:41 PM) Looking to buy a townhome/duplex in the SW Chicago subuubs, and need some help! This is my first place, and I don't want to bite off more than I can chew from a financial standpoint. Anyone know of any affordable areas in the SW burbs that are also good neighborhoods, affordable taxes, etc ? ? ? I'll be on and off, so let me know if you need more info! Thanks for any help in advance as well! Talk about putting the carriage before the horse.. Affordable to me - or others-, might not be affordable to you. Call a lender, get pre-qualified, know what you can handle with the finances you have to work with, then look for a place. Good luck. Quote Link to comment Share on other sites More sharing options...
Iwritecode Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(Steff @ Jan 19, 2006 -> 08:16 AM) Talk about putting the carriage before the horse.. Affordable to me - or others-, might not be affordable to you. Call a lender, get pre-qualified, know what you can handle with the finances you have to work with, then look for a place. Good luck. When we bought our first home we were told that, as a general rule of thumb, the price of the house shouldn't be more than double your yearly income. Quote Link to comment Share on other sites More sharing options...
Chisoxrd5 Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(Iwritecode @ Jan 19, 2006 -> 01:56 PM) When we bought our first home we were told that, as a general rule of thumb, the price of the house shouldn't be more than double your yearly income. Really...I would like to know what percentage of current homeowners actually would fall under that category? Quote Link to comment Share on other sites More sharing options...
Steff Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(Chisoxrd5 @ Jan 19, 2006 -> 01:00 PM) Really...I would like to know what percentage of current homeowners actually would fall under that category? Yea, me to. Cause it's BS. Quote Link to comment Share on other sites More sharing options...
southsider2k5 Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(Chisoxrd5 @ Jan 19, 2006 -> 02:00 PM) Really...I would like to know what percentage of current homeowners actually would fall under that category? My wife and I do. We are barely over our incomes added up. Quote Link to comment Share on other sites More sharing options...
Balta1701 Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(southsider2k5 @ Jan 19, 2006 -> 11:03 AM) My wife and I do. We are barely over our incomes added up. I take it that's possible when you're in Mich City (that's where you're at correct?) but somehow I doubt that people living closer to the city, or for another example anywhere in the state of California, are following those guidelines. Quote Link to comment Share on other sites More sharing options...
Chisoxrd5 Posted January 19, 2006 Share Posted January 19, 2006 So apparently by this logic I would be able to move into this: Quote Link to comment Share on other sites More sharing options...
Steff Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(Balta1701 @ Jan 19, 2006 -> 01:06 PM) I take it that's possible when you're in Mich City (that's where you're at correct?) but somehow I doubt that people living closer to the city, or for another example anywhere in the state of California, are following those guidelines. The average home price is over $250K... While the average income is just over $70K... (going from memory on that - let me go find a link) So I would say that folks are finding a way to buy bigger and make it work. Quote Link to comment Share on other sites More sharing options...
Steff Posted January 19, 2006 Share Posted January 19, 2006 Average home price. http://usgovinfo.about.com/od/consumerawar...homeprice04.htm Average income. http://www.census.gov/hhes/income/4person.html According to that link the average was $65K in '03. Quote Link to comment Share on other sites More sharing options...
southsider2k5 Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(Balta1701 @ Jan 19, 2006 -> 02:06 PM) I take it that's possible when you're in Mich City (that's where you're at correct?) but somehow I doubt that people living closer to the city, or for another example anywhere in the state of California, are following those guidelines. Yeah, good ol Michigan City. It is very possible, but it definately helps that I work in Chicago and live in MC. I would say most jobs in MC are about where two earners would be able to be at about the double income rule for a decent place. We pretty well stuck to our budget when we bought our place, and got lucky to find the price we did for our place. In Chicago or the near burbs, this would be pretty impossible unless you were rich or living in a complete dump/bad area. Quote Link to comment Share on other sites More sharing options...
southsider2k5 Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(Steff @ Jan 19, 2006 -> 02:12 PM) The average home price is over $250K... While the average income is just over $70K... (going from memory on that - let me go find a link) So I would say that folks are finding a way to buy bigger and make it work. Low interest rates have a lot to do with that. Once interest rates start to go up, is when you will really see that start to change back towards the 2Xs figure. Quote Link to comment Share on other sites More sharing options...
Steff Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(southsider2k5 @ Jan 19, 2006 -> 01:17 PM) Low interest rates have a lot to do with that. Once interest rates start to go up, is when you will really see that start to change back towards the 2Xs figure. What does that have to do with buying now...? Going over my homes, I was never anywhere near that rule. Never heard it before either. Too many variables to apply to everyone. Quote Link to comment Share on other sites More sharing options...
southsider2k5 Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(Steff @ Jan 19, 2006 -> 02:21 PM) What does that have to do with buying now...? Going over my homes, I was never anywhere near that rule. Never heard it before either. Too many variables to apply to everyone. There could be a sizable difference between buying today and 3 months from now... Who knows how long it will take the guy to find a place. Mortgage rates haven't gone up nearly as much as interest rates, so eventually there is going to be an evening out of things. Quote Link to comment Share on other sites More sharing options...
Steff Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(southsider2k5 @ Jan 19, 2006 -> 01:24 PM) There could be a sizable difference between buying today and 3 months from now... Who knows how long it will take the guy to find a place. Mortgage rates haven't gone up nearly as much as interest rates, so eventually there is going to be an evening out of things. Right, but even still.. the 2x rule would still not apply across the board. A better more accurate (IMO) rule is not to exceed 20% of your monthly income towards paying a house payment. Quote Link to comment Share on other sites More sharing options...
RockRaines Posted January 19, 2006 Share Posted January 19, 2006 If that rule was really something realistic, then the development of chicago residential markets would never have happened. In my nieghborhood alone, most condos are now a minimum of 405k. Quote Link to comment Share on other sites More sharing options...
Kyyle23 Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(RockRaines @ Jan 19, 2006 -> 02:34 PM) If that rule was really something realistic, then the development of chicago residential markets would never have happened. In my nieghborhood alone, most condos are now a minimum of 405k. There are alot of people that follow that rule, it is realistic. It isnt a groundrule for getting a mortgage, its just a recommendation for people buying a house. It doesnt stop people who want to buy a house if their 2 year combined income doesnt equal the worth of the house, its just something for people to think about. There are so many different "rules of thumb" for different people buying a mortgage. My father told me he used the "old way" in regards to his mortgage. You get it, you pay it off, you dont refinance. That doesnt mean its right, its just the way he does it. Quote Link to comment Share on other sites More sharing options...
Iwritecode Posted January 19, 2006 Share Posted January 19, 2006 I'm just repeating what I was told by a grand total of one person. It's worked for us so far... QUOTE(Steff @ Jan 19, 2006 -> 01:27 PM) A better more accurate (IMO) rule is not to exceed 20% of your monthly income towards paying a house payment. I'm paying closer to 30% of my monthly income towards my house payment. Yet the total cost is still less that double my yearly... Quote Link to comment Share on other sites More sharing options...
Steff Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(Iwritecode @ Jan 19, 2006 -> 03:01 PM) I'm just repeating what I was told by a grand total of one person. It's worked for us so far... I'm paying closer to 30% of my monthly income towards my house payment. Yet the total cost is still less that double my yearly... I'm not saying it's wrong at all. Whatever works. But disposable income is different for everyone based on priorities. We could be living in a way bigger house.. but we like our Sox and Bears season tickets, cars, vacations, my shopping problem :rolly , etc, etc... and seriously.. without several kids there is no need for more then 3k sq feet, imo. We pay more then 20% also and our house didn't cost double. Quote Link to comment Share on other sites More sharing options...
kapkomet Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(Iwritecode @ Jan 19, 2006 -> 06:56 PM) When we bought our first home we were told that, as a general rule of thumb, the price of the house shouldn't be more than double your yearly income. gross or net? Actually, in Fort Worth where we are, after my wife quits work, I'll be right at 2x my gross salary, so I don't feel so bad after seeing this thread. Quote Link to comment Share on other sites More sharing options...
Iwritecode Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(Steff @ Jan 19, 2006 -> 03:12 PM) I'm not saying it's wrong at all. Whatever works. But disposable income is different for everyone based on priorities. We could be living in a way bigger house.. but we like our Sox and Bears season tickets, cars, vacations, my shopping problem :rolly , etc, etc... and seriously.. without several kids there is no need for more then 3k sq feet, imo. We pay more then 20% also and our house didn't cost double. We need a bigger house. IIRC we are just under 1K sq feet. What's really sad is that for what we are paying, we could probably get a bigger one and still spend about the same amount. I just don't think we'd be able to sell our current one for the amount we'd need to pay it off... Quote Link to comment Share on other sites More sharing options...
Iwritecode Posted January 19, 2006 Share Posted January 19, 2006 (edited) QUOTE(kapkomet @ Jan 19, 2006 -> 03:18 PM) gross or net? Actually, in Fort Worth where we are, after my wife quits work, I'll be right at 2x my gross salary, so I don't feel so bad after seeing this thread. Not sure. It's just something somebody said (I think it was when we were applying for our loan) when we were house hunting and it's stuck in my brain ever since. The other one was that house payments are typically 1% of your total mortage. Including taxes and insurance. That's about right for us as well... Edited January 19, 2006 by Iwritecode Quote Link to comment Share on other sites More sharing options...
Chisoxfn Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(southsider2k5 @ Jan 19, 2006 -> 11:17 AM) Low interest rates have a lot to do with that. Once interest rates start to go up, is when you will really see that start to change back towards the 2Xs figure. Rates aren't going up, not on mortgages. Plus that figure may work in certain areas, but not many people are going to make the median price in the Orange County or LA area and my guess is that works in Chicago too. The median price of homes (was in the paper today on the real estate front page) is over 600K. However, California real estate over the past 16 years has seen an average apprecaition of 7.1% (pretty damn good). I'm sure if you factored in SoCal alone it be even more ridiculous. Quote Link to comment Share on other sites More sharing options...
Chisoxfn Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(southsider2k5 @ Jan 19, 2006 -> 11:24 AM) There could be a sizable difference between buying today and 3 months from now... Who knows how long it will take the guy to find a place. Mortgage rates haven't gone up nearly as much as interest rates, so eventually there is going to be an evening out of things. I could get someone the same loan today that I could a year ago. The media likes to hype a lot about the rate and sure the fed rate has adjusted, but that has a minimal effect on the rate you can get for mortages. What would change is if they made qualifications stricter on loans cause right now almost anyone can get a loan (regardless of how much money they can put down). Plus the programs out there (which are so liberal in a sense) allow people to pay a lot less on homes (low start rates, etc). Quote Link to comment Share on other sites More sharing options...
Chisoxfn Posted January 19, 2006 Share Posted January 19, 2006 QUOTE(Steff @ Jan 19, 2006 -> 11:27 AM) Right, but even still.. the 2x rule would still not apply across the board. A better more accurate (IMO) rule is not to exceed 20% of your monthly income towards paying a house payment. The typical ratio is 50%, but its not the ratio of the price of the home. Has more to deal with the actual payment and how it figures. YOu have two ratio's when you do a loan and depending on the loan program you want you need to get them into whack (most of the time people just bs the ratio's anyway cause they are for the most part garbage). Just think about when you go buy a car, most of the time the dealers will tell you to just make up a figure (if you are getting a loan through them) thats higher. If people actually had to properly qualify for these loans (and they got strict on it), than you'd see the price of homes fall big time. Quote Link to comment Share on other sites More sharing options...
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