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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Patricia who wrote (1992)2/28/2002 11:28:14 AM
From: J. P.Read Replies (3) of 306849
 
Thanks Patricia,

Thanks for the calculation link. So you'd be paying about 2K a month for a 300K house and deducting 18K from your gross. So you'd save about 6K or so if you're in the 33% tax bracket.

Ideally, you'd want the payment to be 25% of your gross, so for a 300k house you want a 96,000 a year family income.

This brings down the numbers from my initial post, but in my way of thinking this is still stretched. I still don't believe the majority of families in the Chicago suburbs make 96K but I could be mistaken. It would probably mean that both the husband and wife work, and then you have day care issues. Then you are basically paying nothing but interest for 10 years on a 30 year loan, crazy in my book (unless, of course property values double in 5 years like they have in some 'burbs, then you're set, but how long can that go on?).

I am actually going to buy a house in the City that would be more like 5-10% of my gross income. Then pay off the sucker in less than 5 years, paying little interest. Might not be a trendy home, but it's the only way I can think of to get true value out of this Chicago market in my crazy way of thinking. Wish I'd bought 5 years ago, but I was single and irresponsible and too busy losing money on the stock market!
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