Save Money, Make Money Challenge

Hey there!  I honestly say spend no more than 40% of your combined total monthly income on mortgage (and that includes homeowner's insurance, HOA fees, etc. - ANY mortgage related fees).

I had a house with my ex, and the broker and the mortgage company all said "oh no more than 75% of your income", and I kept hearing that.  We got laid off and lost our home.  It sucked, as you can imagine.

You've probably heard this all before... but make sure:

*  You have 3 months of mortgage payments in savings and you NEVER touch them unless they're needed for the mortgage - and NOTHING ELSE!
*  Your basic costs can be covered by ONE salary - that means if you get laid off, your bf/husband can pay the bills until you can get back on your feet - or vice versa.
*  You get a good home inspection and make sure the homeowners get ANY problems fixed before you take ownership of the property - and make sure you get paperwork for ANY work done!

If I'd gone by those 3 rules of thumb, I'd probably still have my house. :) 

Good luck!  I'm in Seattle, and home prices here are just about as nutty as in NY. 

Hey! I'm new to this board, but I saw this thread and wanted to chime in. My fiancee and I are in the process of buying a house in Chicago (just did the inspection on Saturday) and we are definitely at the higher end of the suggestions. Our mortgage payment is about 40% of our net income each month. That said, we're bot in our 20s and we expect our salaries to increase. Also, we have no kids, no debt, etc. So, our house and amusement is really all we need to spend our money on.

I think that in a city spending only 10% of your income on a mortgage is nearly impossible. When I bought my condo 3 years ago my housing expenses (mortgage, tax and assessments) accounted for nearly 50% of my net income. However, I got promotions and raises and now it is a much smaller portion (although not for long). Even in this market though, I made a substantial profit on my condo and sold it without any trouble.

I definitely think buying more of a fixer upper is the way to go. I did that with my condo and while it was a lot of work, in the end the condo was exactly what I wanted and I made money on it. I couldn't ask for much more from a house, really. I did 99% of the work myself though, which makes it a TON easier to ensure your work is profitable (assuming you can do quality work).

Anyway, good luck! You are definitely not alone in feeling the financial pinch of home ownership in a major city.

Wow, you guys are lucky!  The housing market went absolutely nutty where we live.  Two years ago they said our house was worth 30,000 more than it is now.  We are one of those unfortunates who got the variable rates.  Whatever you do, DON'T DO THAT!!  We use to pay about 30% of our income, now we pay 70%.  It is sickening and we can't refinance because of the market.

We had to refinance when Hubby lost his job a few years back so we wouldn't loose everything.  Looking back, we should have let them repo the cars and kept our nicer house payment!

I don't know about percentages, but ours is approximately $1200 a month.  We live in eastern Tennessee, though.  We used to live in California (about 30 minutes from San Francisco), and our rent was exactly the same for a tiny tiny apartment in a safe area.  We hated living there.  As soon as we were able, we moved back southeast to North Carolina, then wound up here because of my husband's career.  I am originally from western NC, and I've never seen anything like the crazy business that is going on with housing in California.  I know CA is one of the worst in the country for housing prices anyway.  I don't know about New York.  It seems like it would be an expensive place, too.  We live on about an acre and a half of land with some wooded, our house is a split level with I would guess about 2000 square feet total, and there are only two of us, myself and my husband.  For us, this is plenty of space.  The house has 3 bedrooms and 2 bathrooms and a cute deck out back.  Our yard is roomy.  We like it here.  I know sometimes city people might think living in the country is dull or stinks, but we're not far from Knoxville, we literally hope to build a front porch and put a couple of rocking chairs on it (a la Mayberry), and we love the peace and quiet, plus we have friendly neighbors.  I came from a small town of about 3000 people, so to me this area is a metropolis.  And Knoxville has all kinds of attractions.  I know we southerners are sort of grateful people think we're hillbillies because it means they won't come put their house in our yards!  (Joking)  My husband is English, and his background involves a lot more people than mine.  He loves country living.  That's where he says is most desirable to live in England, but you have to be rich to be able to accomplish it.  Here, people have an image of larger cities and want to go there, but small areas with "personality" can more than compensate for living in a large city at much much lower prices for homes and great standard of living.  You would be surprised what homes go for here, seriously.  It's great, really.