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      05-29-2020, 10:34 AM   #95
C2YT
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Drives: 2011 e90 335i
Join Date: Dec 2017
Location: Taylor, MI

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Quote:
Originally Posted by Savageenterprise View Post
I'd really like to know where homes cost $150k that are not in the ghetto. Please advise, thank you.
Everywhere... you just have to look. Honestly this comes across a little closed minded. There is a extraordinary amount of people who live in sub $150,000, or even sub $100,000 homes.

Yeah, we don't have an HOA, or lawn-care service, or whatever other features and benefits come with living in a subdivision. The houses are older, and sometimes not maintained as they should be. It is far from the ghetto though.

I don't know what lens you are viewing this though, or where you live, but I recommend going and experiencing different parts of the country. Especially in the midwest where many families are supported by blue collar manufacturing jobs.

Quote:
Originally Posted by zx10guy View Post
The more refined rule of thumb to measure where you are in purchasing a particular home lies in what's called front end and back end ratios.

Front end ratio is your PITI (principle/interest/taxes/insurance) divided by your gross monthly income. A conservative look at this number says if your front ed ratio is 28% or less, then you can afford the home. More aggressive means anywhere from 32 to 36%.

Back end ratio is your PITI plus your long term monthly expenses (typically measured by expenses you expect to be paying past a few months) divided by your gross monthly. Conservative number for affordability is anything below 36 to 38%. Aggressive would push this out to 42%. Anything above 42% is really pushing it.

Front end and back end ratios are used by loan officers and financial advisors to determine home affordability.
This is an interesting ratio, and I did the same thing when I was budgeting for my first home. Comes out to a little over 10%, so not to shabby! Allows me to save towards the next place and focus towards retirement savings / 401k.
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