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My wife and I live in a small condo with our dog and son. It's about 650 sq ft. I believe we could honestly live here until older son is maybe 5-6 years old, even if we had another child, but we still want to buy land and build something a little more comfortable in the long run. I'd like to be able buy land outright and then build and pay off as I go within a few years.
Husband and I are DINKs (dual income, no kids). We bought a house we could qualify for on just one income. Was very glad we did when my husband lost his job a few years ago with no unemployment and was out of work for a year. Now we are actively saving/investing/working on paying off the house about 12 years early.
We no longer own a house, but we had bought and sold a total of 9 houses in four decades. I can't remember the qualification vs. the actual loan, but I do know that 8 houses had mortgage payments that were less than 40% of one income, and one of the last two houses we purchased after retirement, we paid cash. We never relied on both incomes when it came to mortgage or rent. We didn't realize how wise our practice was until I decided to retired early at 47, and husband was still able to continue paying the mortgage with his sole income until his retirement 4 years later, at 54.
The money we didn't pay the bank for the mortgage was better spent on our lifelong passion: travel.
Last edited by Ol' Wanderer; 03-17-2013 at 08:06 PM..
Qualified for 3 times the purchase price of my first home. It was a cute 3 bedroom Cap Cod with a fenced in yard for my precious pups. The entire mortgage qualification process pushed/pushes people to believe they should buy more than they could smartly/realistically afford. I think more people get it now.... keeping up with the Jones's debt ratio to impress people who either don't notice or don't care is not worth sacrificing your precious time. Work less and enjoy more
Every one I bought was for less than I qualified. Last one, I was able to pay off in 6 years. I only lived in it for 2, moved due to work. It was easy to rent and did a rent with option to a young couple.
I'm now renting and waiting for prices where I am to fall, which I expect they will in the next year. If not, I'll look for a project house.
Yes, I bought my second home so that they payment could be made with of our two incomes. My current home is small but not ultra small. I love it. It is easy to keep clean and everything is of high quality - wood floors, fixtures, paint, cabinets.
Yup. Every time. We have bought what one could afford should the other lose their income even though for many years, that was a very distant possibility. However now, I am living it. And glad that I've always been cautious and conservative in this regard.
I bought the home I wanted and it was below our means.
But price was part of the criteria.
Saw others who were house poor and wasn't falling for that.
And, btw, what you "qualify" for and what you can afford (your means) are not the same thing. So buying less than what you qualify for isn't necessarily buying below your means.
I know what you mean here.... back when we bought, we used the 2.5 times your salary formula, and that was 150k. We pre-approved for that amount, but we could have gone higher according to bank and realtors. But we REALLY didn't feel comfortable with that.
Although, out here, I really wished we would have pushed it and gotten a house in a really good neighborhood. I would have been sitting pretty if I had -- those house values haven't crashed and burned like ours.
But on the other hand, if I had had that major increase in my house value, would have we fallen prey to the using your house like an ATM?
So Who bought a lower priced house when they were approved for way more?
All the homes I've lived in -- rented or owned -- were/are well below what the bank told me I could afford.
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