Scenario 1
By Chris G
Brett makes $60,000 a year, and has a monthly car payment of $450. With 30% of his income going to taxes, Brett takes home $42,000 a year. Brett makes $3,500 a month. Subtracting $450 from that amount, Brett keeps $3,050 a month. Brett can afford to make maximum payments of $1,220 a month, which is 40% of his income per month, which leaves him with $1,830 for gas, food, and spending money. Averaging $60 per trip to the supermarket every week, he spends $240 on food. Adding to that, he fills his car up once a week for $60, adding another $240, he still has $1,350 to do with what he wants.
Home Buying
Brett can get a loan at 4.5% with Wells Fargo. He is in the market for a $200,000-$250,000 home. He has found a house for $225,000, and has saved up a down-payment of $25,000. The house is at 11552 Carter Street, Overland Park, KS, and the realtor is Gigi Perry. IT has 3.5 baths and 4 bedrooms. The monthly payment for the house is $1,013, well within his budget. If he increases his monthly payment by 15%, and pays $1,403, he pays off the house in 17 years. He would be paying 46% of his monthly income as house payment, leaving $1,647 for gas, food, and other expenses.
Citings
(2013 December 26). 11552 CARTER Street, Overland Park, KS. Retrieved from: http://www.remax-midstates.com
(2013 December 26). Wells Fargo Home Mortgage- Today's Rates. Retrieved from: http://www.wellsfargo.com
(2013 December 26). Tour 123477. Retrieved from http://www.seetheproperty.com
(2013 December 26). Wells Fargo Home Mortgage- Today's Rates. Retrieved from: http://www.wellsfargo.com
(2013 December 26). Tour 123477. Retrieved from http://www.seetheproperty.com