I'm 52 and a realtor. I've been a homeowner for 25 years, and I'll spare you the torturous tale of our personal experience. Suffice it to say that with our first home we followed the wise counsel of a relative with a plan to help us financial with an arrangement that would allow us to buy a house that he would have renovated. He backed out after we got in the house sticking us with all the expenses and renovations. The second house we used our experience to get in a home we could easily afford on one income. Then the car died. The teenagers ended up costing more than we could have anticipated. Repairs and upgrades to the older house became necessary over the years ...

I personally question why newlyweds in their mid-20's need to buy a half million dollar home? The experience of the last five years with the mortgage market should help to inform your decision. Many of the foreclosed homes on the market were dreams that some family could afford on paper, but when they moved in, they were unable to handle the utility bills, the property taxes, furniture, groceries ...

Twice in our marriage, we have had our income unexpectedly halved. The first time was in 1993 when I lost my full time job which provided 49% of our gross income and I ended up being a stay at home mother by default. The second time was in 2007 when my husband unexpectedly retired due to disability on 60% of his gross income.

We've made it through by sheer perseverance. We got our first home with 100% VA financing of $54.5K in 1983 and sold the house 15 years later when he was transferred to Texas for $86K. We put part of the equity into the 20% down payment on our $109.9K house here in 1998. In ten years we've replaced the water heater and all the kitchen appliances. We've pretty much replumbed the house. We've put on a new roof and redone the entire HVAC system. We've done significant work to the electrical system. All of the work was anticipated, but just earlier than we had expected to have to do the work. The value of the home has increased, but there are still plenty of upgrades, i.e., new windows and doors, replaster the pool, new floors throughout, that are still on the boards.

You all can do a lot with $450K at this point in your life. If you buy a less expensive house, you can make double mortgage payments while your income is still substantial and build equity more quickly in your home. You can pay off your student loans in 5 or 10 years rather than 20 years. You can afford to have children and if you like, you could send them to the most exclusive private schools. You could put money into a college fund for your future children, so that they don't have to take out student loans for higher education. You can buy heirloom quality furniture a couple of pieces at a time and have some pieces to hand down to your children. You could save money for a down payment on the next house. You can invest the money in your 401K's at the highest percentage allowed before your income reaches the level where your company decreases or does away with its matching funds. You can afford to take in an aging parent or grandparent or help them financially to stay in their home as long as possible. You can take regular vacations to exotic places.

I wouldn't give up homeownership for anything. It was and is the right choice. There are ways to structure your financial future and your lives that will allow you both long term and short term benefits without sinking you into enormous debt. Financial problems are one of the number one reasons for divorce and marital strife. Give yourselves a wonderful wedding gift by making wise choices now about your future.

It depends on how you live. Your monthly debt after you own a home will consist of much more than stated here. Water/sewer/trash pickup, electric utility, gas utility, groceries, gasoline, home maintenance and car maintenance expenses, car payments, student loans, entertainment expenses (you do still want to travel, entertain, go to the movies, go out to eat, etc...?) Will you have an escrow account or pay your taxes and insurance yourself each year? Those will be new annual bills to get used to. $450k buys you a large home in Murphy. If this is your first house, you'll need to budget for furniture shopping and decorating your Mcmansion. Who will clean the house? $450k in Murphy gets you well above 3500 square feet of living space. Who will maintain the yard? Planning on children? They're an expense all their own. Are you still okay if gasoline shoots back up to $4.50/gallon in 2009? If groceries skyrocket again this year? If one of you loses your job?

One of the things a good real estate agent will do is find out enough about you to answer your very good question. Until you go through a thorough buyer interview, the answer is just 'it depends...'.
Ronda Allen, C.P.M., Realtor
C21 Judge Fite Fine Homes & Estates
at The Shops at Starwood

Based simply on the numbers, you should not have a problem. Of course, this is not a whole picture, so I would sit down with a mortgage professional and work over some numbers.

I am a mortgage broker. If I can be of service, please let me know!

Martin Smith

Precision Funding
877-238-6324 Ext 704
513-536-7184
877-238-6324 FAX
MSmith@PrecisionFundingUSA.com
http://www.PrecisionFundingUSA.com

All of these answers provide good information. You and your fiancee should speak with a mortgage professional to get the numbers crunched. You should also speak with a Realtor who can provide you with other home choices in the areas that you are interested in. There is no cost or obligation to you for either of these initial calls.

If you are looking in the Murphy area, I would recommend that you call Charlie Waller with WR Starkey for your mortgage needs. He is based in Wylie and works the Murphy, Parker, Lucas, Wylie, & Sachse areas. You can reach him at 972-442-3757. He can provide all the information you need regarding financing. For a Realtor I would recommend calling the North Texas Top Team Realtors based at Coldwell Banker in Wylie. You can call 214-418-0180 or 214-244-3664 to speak with an agent who can discuss the specific neighborhoods you are interested in.

As you move through the home buying process, please know that there is NO COST to you as a buyer for a real estate agent's services. (home sellers or builders pay the realtor fees). It's very important for you to have a professional represent you, and guide you through the process, as you make one of the largest purchases of your life.

I hope this information is helpful to you. Please let us know if there's anything we can do for you.
Melissa Hailey
Coldwell Banker Jane Henry Realtors
North Texas Top Team Realtors
214-418-0180
melissa.hailey@coldwellbanker.com

I think Tom's answer is right on.

A couple of things I would also consider.
Don't buy the house until you get married. If you just can't wait, make sure you have an attorney draw up a pre-nup. We see way too many problems without them. It does happen and probably more frequently than we even know about. The downside is if you break up then you have to sell the house. Maybe you sell at a loss and someone will have to cough up the dough. If you can't get the signature on the marriage certificate, believe me it becomes almost impossible to get it on a contract that involves a loss or cash call.

Everyone is different regarding finances. How stable are your jobs. Do either of you want to go back to school? What are the chances of getting transferred? Do you have any unusual expenses...such as big vacations? What kind of wedding are you planning, how much will it cost and who's paying for it? Does it add to the debt? Are the cars brand new or do they need replacement? Does commute and gas cost play any roll in your budget?

$450K in Murphy should be a lot of house. Do you really need that much? I hear from many of my buyers that they bought too much house. They could afford it, but don't use it, don't like paying the energy bills, and don't like the upkeep.

None of these are meant to talk you out of the house. Just give you some things to think about that we sometimes hear from other buyers.

Good luck and congratulations.

The only answer to this is staring back at you in the mirror.
No realtor or loan officer can tell you how much you can afford.
Some people are comfortable spending a high % of their income on housing. Others are more consaervative.
1. Get preapproved with an accurate good faith estimate of fees and total payment
2. See if it fits the budget

While it looks like your debt ratios will be relatively low.... You may elect to buy something that you can make payments on should one of the two incomes goes away for a while.... food for thought.
Ask any ex Nortel employee how much house they can afford.... It is much less than what they 'used to own.

Good luck!!

Tom

I am a Dallas realtor and Dallas mortgage loan officer, love to speak with you short / long term goals on purchasing a home. NOW is a great time too purchase Dallas homes for sale, interest rates are low, there great home foreclosures with equity.

You both would receive annual tax benefits. Properties will reverse go up Dallas has a fairly safe real estate market.

You would need to be qualified for a home loan prior to search for any property.

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