How much does my income need to be to afford a house and car?
November 29, 2008 · Print This Article
morelia_lady asked:
My husband and I live in Canada, are in our mid-twenties, and have a combined income of slightly more than $73,000.
We currently rent, have no debt, no car, and some small savings. Our expenses aren’t that high - normal TV / Internet / Phone, no alcohol or cigarettes and we don’t eat out that much.
We are contemplating buying the house, but it seems like it will be tight because we will also need a car to buy a house (not a townhouse) slightly outside of town.
So, I’m just wondering, in general, if you saw someone with a normal car, maybe a low end 2003-2005 model, and a small house, no kids, a few pets, how much would you think they have to earn to be able to afford that and continue to put a bit aside for RRSPs and such?
I tend to spend a fair bit on house stuff - we are still buying “essentials” like sheets, towels, blenders. Also minor expenses like bus pass, pet food, shampoo etc.
Plus what we put into our savings which is about 10-12% of our net income.
Caffeinated Content for WordPress
My husband and I live in Canada, are in our mid-twenties, and have a combined income of slightly more than $73,000.
We currently rent, have no debt, no car, and some small savings. Our expenses aren’t that high - normal TV / Internet / Phone, no alcohol or cigarettes and we don’t eat out that much.
We are contemplating buying the house, but it seems like it will be tight because we will also need a car to buy a house (not a townhouse) slightly outside of town.
So, I’m just wondering, in general, if you saw someone with a normal car, maybe a low end 2003-2005 model, and a small house, no kids, a few pets, how much would you think they have to earn to be able to afford that and continue to put a bit aside for RRSPs and such?
I tend to spend a fair bit on house stuff - we are still buying “essentials” like sheets, towels, blenders. Also minor expenses like bus pass, pet food, shampoo etc.
Plus what we put into our savings which is about 10-12% of our net income.
Caffeinated Content for WordPress
Josh Dunaway has been a certfied Realtor in the suburban Chicagoland area for over 20 years. Aside from starting his own real estate company, he also owns a mortgage company as well.
you make enough , its ppl making half that income, and purchased a home and car, so shop around
you should be able to buy a house quite comfortably. my concern for you right now is what you’re currently spending. You appear to have no budget, don’t smoke, don’t drink, etc. How do you spend all the money you have now. I’m not sure you can afford a home right now unless you seriously get into a budget and find out what you’re doing with all your money.
If your lifestyle is actually as you say it is then you should not have a problem. Talk to your bank manager about what would be a manageable mortgage and use that as your guide in choosing a house.
I would save up to buy the car in cash if you possibly can.. My insurance is higher then my car payment and it was one of the cheapest cars to insure and my husband and I have clean driving records. It’s the car insurance that will strangle you..
Otherwise though, I would think you would be in good shape to buy a house. Remember though, they will approve you for much more then is comfortable to make payments on. We got approved for a 150,000 mortgage with our income and things are tighter then we like in a 60,000 home.. Things happen, we had the plumbing freeze one year, the water heater went, we had the pump for the well go out..
We’re very glad we opted to live further out and buy a much cheaper house then the realtor was pushing… Even if one of us lost our job and had to work for minimum wage for awhile, we could still manage to keep our house..
We have friends that are just financed so heavily they’d lose it all if they lost their job..
I tend to budget deeply on the conservative side and would try to think about doing the essentials (food, mortgage/rent, etc.) on one income with the second one covering the frills of savings, internet, pets, etc.
I would hope to never DEPEND on both incomes to live.