<p>notrichenough, I just ran 2.5x our current income at 4% for a 30 year fixed, and the payment is 17.9%. Ran our numbers against the purchase price of the house, our 1998 income and interest rate for a 30 year mortgage (5.625%) when we actually bought this house and it was also 17%. We are in a very high COL area. Had we gone as high as the calculators indicated or USAA authorized, we’d be rather house poor. The difference between the mortgage we actually have and 30% of income helped pay for a good chunk of college.</p>
<p>“Yes, not to derail the current talk of real estate prices, there is a blood test.”</p>
<p>That’s interesting, @dragonmom. I wonder if they typically do that on people. Well, if something weird happens to us, I’m starting a thread here!</p>
<p>Is it 30% of after tax income you’re supposed to put toward housing? Our mortgage significantly exceeded that and we put down a 60% down payment. We were paying nearly 50% of our take home pay when mortgage interest rates were high 9-12%. It was very scary and uncomfortable. </p>
<p>2.5x annual salary doesn’t buy you much in our city, sadly. Our median incomes are very low ($50k) while our median housing prices are very high (>$500k). It’s a bad mismatch and causes a lot of multigenerational houses. </p>
<p>Assuming two people earning $50k x 2.5, that’s only $250k–not much available at that price, sadly. </p>
<p>HIMom, it’s 30% of gross earnings. Housing here is really expensive, too (median is $459k in our county), and with apartments near us (an hour’s commute to downtown) running $1600/mo these days, a lot of college folks are living at home after graduation. It seems to be the norm in our neighborhood in recent years. Neighbors on both sides of us have three generations living together, too. Grandparents watch the younger kids while parents are at work. </p>
<p>We were lucky to have bought at the bottom of the market in 1998 and that we didn’t pull out equity over the years. This is not a snazzy house by any means, but it has worked for us. At this point the house definitely needs some maintenance and updating (windows are original from the mid-60s, A/C and heating units are 23 years old, electrical and plumbing need to be updated, etc.) that will need to wait til S2 is off the payroll. </p>
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Oh well, traffic there is terrible.
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<p>that is something I want to avoid as much as possible. </p>
<p>Anyone concerned about night-vision issues as we age?</p>
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<p>I’m going to go out on a limb here and guess that there are far more injuries to the elderly as a result of falling down stairs than there are on elevator incidents. </p>
<p>I’m a bad worrier, but this is not going to cause me an ounce of distress. Servicing our elevator at intervals and keeping a working phone in it is going to be more than sufficient to keep me confident that having and using an elevator is relatively safe.</p>
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Hmm, assume $100K income -> $250K mortgage, my mortgage calculator gives a payment of $1194, x12/100K = 14.3%.</p>
<p>At 11%, where my first mortgage was, the payment would be $2572, which is 30.9%.</p>
<p>So back in the day when rates were horrible, 2.5x income and 30% were about the same. </p>
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<p>30% of gross is like 50% of net. That sounds way way too high. I’m pretty sure I’ve always seen that advice as 30% (or 33%) of net, not gross. And even that advice, I’ve always heard as “no more than,” not a target. </p>
<p>Most say, hope to have 1 million dollars in retirement. Let’s say you want to have a 50K income for 20 years - which is not alot - that 1million right there… Scary… Suzy Orman always says ‘pay yourself before others’. That bonus or anything you get, put that away for retirement. Financial Advisor says we should try to have 3 sources of income - social security, 401k and something else like a pension. So many rely solely on social security, very scary. We are making sure our kids go to a college that we can pay for NOW, not somewhere we’ll have to take out a huge second mortgage to pay for - that would give us a mortgage in our retirement and don’t want that. </p>
<p>“Night vision”??? Heck I feel like ALL my vision is going fast. Near, far, in between, day, night…only time I don’t have a problem is nap time.</p>
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If you can earn 3% per year on your million, it will last 31 years, not 20. If you can get 4%, it will last 42 years. If you can get 5% it will last forever.</p>
<p>It wasn’t all that long ago that bank savings accounts were paying 5%.</p>
<p>Of course, this doesn’t consider inflation.</p>
<p>Regarding the heart attack/blood test question. Yes, there is a blood test for markers of cardiac damage, which rises over time. There are also indicators of heart ischemia, or lack of blood flow, on an EKG as well as indicators of cardiac damage. With certain types of EKG changes, you’re sent to the cath lab immediately. If the EKG is ok, the blood test is ok, you may need to have a stress test prior to hospital release. Many things can cause chest pain, and sometimes sorting it out is not easy. </p>
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<p>LOL, isn’t that the truth. The other day, one of our smoke detectors was chirping. This is the first time I’ve had to change a battery since we moved into this house. I got a new battery, a ladder, and took the detector off the ceiling (still connected with wires, though, so couldn’t hold the thing in my hand). Even with my trifocals on, I could NOT read how to get the dang thing open to change the battery! I finally had to take a photo of it and enlarge the photo in order to read the instructions of how to jimmy the battery door open. SO FRUSTRATING!!!</p>
<p>Guess I need to get to the eye doctor for a new prescription.</p>
<p>Hey, gang! I’m retired as of 1:00PM today!!</p>
<p>Regarding housing costs, it’s my understanding that under the new rules that became effective in January of this year, the total housing payment (prin., int., tax & ins.) cannot exceed 31% of gross monthly income and total debt service (PITI + all other monthly debt payments) cannot exceed 43% of gross monthly income. The first time I heard someone mention this rule, I had to verify it because I could not believe that anyone, much less the CFPB, would suggest that most home buyers could manage such high debt loads. </p>
<p>Back when I was a retail banker, in the dark ages of the '70s, our rule was that PITI must be no more than 25% of gross monthly income and total debt service could not exceed 33%. Even then, people still got into trouble with borrowing more than they could manage to repay. </p>
<p>Let’s say a hypothetical borrower pays approx. 12% of their gross for federal and state taxes and 5% for health insurance. We’re up to 60% of gross monthly income if they max out their debt service, and this is before considering expenses such as car insurance and utilities. Add in food, gas, car maintenance, and clothing, and there’s not a lot left for luxuries much less for home repairs or emergencies. </p>
<p>It seems that some people choose to forgo saving for retirement rather than give up movies, smart phones or trips to the beach. I’ve certainly witnessed that behavior by a few of our relatives. They could not retire at 65 as hoped but had to keep working full time or get part time jobs to cover the gap until full retirement benefits are available. </p>
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Congrats!!</p>
<p>Do you have enough money? ;)</p>
<p>notrichenough,</p>
<p>Fortunately, yes, unless I live 40 more years. 38 years of wise spending/investing/and various retirement accounts.</p>
<p>Congratulations, gloworm! </p>
<p>Congrats, gloworm! </p>
<p>What the heck are you doing on CC? Go out and celebrate!</p>
<p>Congrats, gloworm.</p>