Lets calculate the monthly payment according to the San Diego county tax rates and local Carlsbad assessments (https://www.sdctreastax.com/ebpp3/Search.Aspx):
Lets use the CNN "Home Affordability" (http://cgi.money.cnn.com/tools/houseafford/houseafford.html) calculator to determine what annual gross income you need to afford this home with 20% down and having zero debt:
Final Analysis:
Your income should be $170,000 a year with no debt (best case). The thing that really hits home is even if you paid your home in full, your monthly payment is about $950.00 a month and will continue to grow. Thats scary! I'm keeping far away!
3 comments:
so who knows the best way to figure out how much one can afford? fool.com has culculators but they can be anywhere up or down. I know the traditional financial advice: "3 times your annual income" but in SD you really have to believe in 4-6 times income...otherwise everybody would rent.
Just because it is more expensive in SD, that does not mean you can just change assumptions and say that 4-6 times income is now appropriate.
It is akin to saying "it's different this time", like in the late 90's with tech stocks and in the last few years with housing.
The traditional financial advice is still sound, but if you extend that to 4-6 times income, you and everyone else is just paying for something they can not really afford......and people probably should be renting rather than spending above their limits.
Its time to show the other side of the state. Their are many places that are still very affluent. But many that are not.
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