Quoted: I made about $70k, my Fiance made about $30. Thats about $110k. After tax and dedections (30% average) that was about 6500/mo.
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You may (or may not) be overwithholding. Adjust your W4s so you don't get a refund from IRS & FTB. (Ballpark W.A.G - @ $110K, I think you should be a few hundred higher per month, closer to $7K.)
Furthermore, those #s of yours assume no mortgage & prop tax deduction. For the first decade of your loan, most of the payment is deductible interest. For $3100 principal + interest + tax, only around $400ish (avg) is principal for the first years (even after year 10, only $800 is principal).
So for the numbers I gave you in prior post, $2600 - $400 = $2200 deductible interest, with $430ish or so deductible property tax. So your notch down some tax brackets!!
When you adjust your withholding properly, that near-$7000 combined income will be closer to (exceeding!) $8000/mo since over 1/3 of your mtg payment will shift from IRS withholding to mortgage interest pmt. (Not sure on the spot here how extra SS tax for 2nd person in dual income setting, vs capped SS tax for single person, plays against 2nd exemption for 2nd person).
So, round numbers, your income will, combined be $8Kish/mo...
My Fiance had/has student loans of $150, carpayment $212, insurance $100, debt (prior living expenses while in college) $350. Then figure in gas, food, personal, medical bills, entertainment. I was saving 10% of my salary, about $700/mo, insurance, food, gas, etc etc.
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Let's see...
$8000 - monthly income after W4 adjustment after mortgage.
-$3100 - mortgage principal, taxes, insurance on $430ish-K loan
- $150 - student loan
- $212 - fiance's car
- $100 - fiance's car insurance
- $350 - fiance debt
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$4088 take-home after mortgage and fiance's "former overhead" :)
Now, this doesn't reflect any 401K deductions, which are also pretax and can bring down your bracket even further.
Tighten down the expenditures (no new cars for awhile), you can do this.
I figured I had about $5k/mo of spendable income.
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Well, you're getting hitched so it's about sharing. You still have $4K of income to work with after the mortgage, etc. Not that many 'big things' for you to spend on - just basics like electricity & water and food, which you were paying twice for before.
Since my fiance couldn't even help with rent at the time because of her debt and student loans, she was more of a hinderance than a help with the loan apps.
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I assume that's improved a bit, she's got $30K of income/year as a contribution, with an upcoming reduced tax bracket. Remember you're applying
combined. She would not be a hindrance unless she had really really crappy credit. Even then, with good credit from you and combined numbers above, the worst case would be a possible 1/4% hike in interest rate.
My 800 credit score was a help, but the prices in ventura where i was living for a fixer uppper were running about 475-550k. that put payments at about 4150/mo (PITI).
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I was figuring $440K and was assuming you're putting something down. For $488K that's $48K - 10% - down. You should be able to do that.
I had so many people tell me to buy a house even though I couldn't afford it, but thats not the way I operate. The QUALITY of your life is way more important than what you own.
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Um, buying a house is an enforced savings plan.
I'm kicking myself for not buying earlier.
You can't be saving much renting (you're saving a few hundred on payment, perhaps - but throwing the rest down the drain).
Bill Wiese
San Jose