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Nursing salary and buying a home?

I start school for my BSN in the Summer of 2015 after I have my second child. I'm not picking nursing for the salary, I've always had a passion for nurses and what they do and couldn't see myself doing anything else with my life!

BUT I'm a planner, dreamer, and have big goals and like to know what I'll be able to expect after I become a nurse. So is it any way possible to have a $400,000, maybe even $500,000 home on a nurses salary? I want a new styled home that I'll be happy to live many many years in so I don't mind it being one of my biggest investments and I don't want to wait late in life for it since my kids will already be growing older by the time I start house searching! So having my house (and student loans) as one of my first financial priorities (we don't need brand new expensive cars) would I be able to afford to pay a $500,000 30 year mortgage?

TheCommuter, BSN, RN

Has 14 years experience. Specializes in Case mgmt., rehab, (CRRN), LTC & psych.

Where are you located? Home prices vary drastically from region to region, as do nursing wages.

For instance, the RN in Arkansas only earns $19 hourly but lives in an area where nice houses are $90,000. On the other hand, the RN in Manhattan earns $45 hourly but lives in an area where a brownstone costs close to $1 million.

So to answer your question, we need more information.

Thank you! I didn't think about that. I live in Alabama. A RNs salary in alabama is estimated to be about 67,000 a year plus my husbands income of just 25,000 a year

LoveMyBugs, BSN, CNA, RN

Specializes in Pediatrics.

Other things to consider are location location location.

Family size. How much are your student loan payments.

I am in the process of buying my first home right now. I was preapproved for a modest amount. The house we are trying to buy is 4bed 2 bath move in ready. It is not a $500,000 house but it works for us

Very true. A lot of the homes in Alabama, although big, are the older style houses, like Antebellums, which their gorgeous homes but not my taste. So a good 4 br 2 bath, new styled, brick house like I would like, from what I've seen browsing around, are $400,000 to $500,000. Sometimes less! And sometimes more.

TheCommuter, BSN, RN

Has 14 years experience. Specializes in Case mgmt., rehab, (CRRN), LTC & psych.

mariah96 said:
Thank you! I didn't think about that. I live in Alabama. A RNs salary in alabama is estimated to be about 67,000 a year plus my husbands income of just 25,000 a year

I know you got that $67k figure from Indeed.com, but that is not accurate. People self-report bloated salaries on Indeed.

A new grad nurse in Alabama is going to start at anywhere from $18 to $23 per hour, depending on the city and specialty. The median RN wage in Alabama is $57k per year according to the BLS, but this is for experienced RNs only. The typical new grad in Alabama starts out at less than $50k yearly. Alabama is one of the lowest paying states in the US. In fact, most of the Southeastern states pay piddling nurse wages due to the low cost of living.

With an estimated starting salary of $45K for you along with your spouse's income of $25k, this results in a combined annual income of $70k. With good credit, most mortgage lenders will allow a married couple with a combined yearly income of $70k to borrow up to four times that amount, which would be $280k at the most. Then you must realize that your student loan debt might reduce the amount lenders will allow you to borrow because it affects your debt-to-income ratio.

Then you've gotta worry about funding your retirement, saving money for a rainy day in case you're fired, and all that good stuff. What are you going to do when you are 65 and your knees are bad from standing all those years? Do you seriously want to work as a nurse until you die? In essence, just because you can most likely qualify to obtain a $280,000 loan to buy a house doesn't mean it's a good idea.

I earn significantly more than the combined $70k income quoted above, but I live in a $100k house because I do not want to be blindsided with bills when certain events transpire (getting fired, getting injured, long term unemployment, etc.). By the way, it is 'newer' since it was built in 2004, and the 1900 square feet of space is more than enough room for me. Even when I was living in California I had an affordable house that cost about $150k.

There are plenty of nice $100k houses in Alabama. Live within your means. The $500k house is a disastrous idea if you will be living from paycheck to paycheck and unable to fund a retirement.

Thank you for giving me a realistic financial frame! Maybe after becoming a nurse and talking to realtors, I'll find an affordable cheaper house that comes close to the style of house I'm looking for (A house built in 2004 sounds perfect). I really didn't know in any means how much I would be able to afford as a nurse and that helped a lot! Thank you!

Commuter is spot on. 400-500K for a house is a LOT of money. Especially in AL. You'd be better off to stick to 100-200k. I'm sure that would still afford you a nice place. (Land is a huge factor) That really doesn't matter now, though. When you're ready to purchase a new home the bank will let you know what you can spend. Just some advice, I too used to look up houses and dream about the tiny details that are so far away. Recently I decided my time would be much better spent learning school and nursing stuff rather than dreaming...

Esme12, ASN, BSN, RN

Has 40 years experience. Specializes in Critical Care, ED, Cath lab, CTPAC,Trauma.

Thank you for giving me a realistic financial frame! Maybe after becoming a nurse and talking to realtors, I'll find an affordable cheaper house that comes close to the style of house I'm looking for (A house built in 2004 sounds perfect). I really didn't know in any means how much I would be able to afford as a nurse and that helped a lot! Thank you!

I think you need to do a little more research. First of all a house in Florence Alabama

is not the same house for the money in Mobile
Bear in mind you NEVER want to be house poor. First homes should be one that you build equity in and are in a neighborhood that offers a good education for your children.

While you are wanting to be a nurse...nursing school are very competitive right now....and expensive. Most facilities are hiring only BSN new grads and the "median salaries" are a combination of the highest to the lowest paid in a specific area and are by NO MEANS an indication of what you will make as a new grad.

There is NO NURSING shortage right now. Most areas in Alabama have a surplus according to job density data keep in mind again that the salary shown are MEDIAN salaries and NOT reflective of a new grads pay Nurses Schools, Salaries, and Job Data

Alabama

[TABLE]

[TR]

[TH=align: left]City and Area[/TH]

[TH=align: right]Median Salary[/TH]

[TH=align: right]Employees[/TH]

[TH=align: right]Job Density[/TH]

[/TR]

[TR]

[TD]Anniston[/TD]

[TD=align: right]$55,000[/TD]

[TD=align: right]970[/TD]

[TD=align: right]+20%[/TD]

[/TR]

[TR]

[TD]Birmingham[/TD]

[TD=align: right]$60,000[/TD]

[TD=align: right]14,710[/TD]

[TD=align: right]+47%[/TD]

[/TR]

[TR]

[TD]Decatur[/TD]

[TD=align: right]$51,000[/TD]

[TD=align: right]980[/TD]

[TD=align: right]+2%[/TD]

[/TR]

[TR]

[TD]Dothan[/TD]

[TD=align: right]$56,000[/TD]

[TD=align: right]1,750[/TD]

[TD=align: right]+65%[/TD]

[/TR]

[TR]

[TD]Florence[/TD]

[TD=align: right]$53,000[/TD]

[TD=align: right]1,370[/TD]

[TD=align: right]+46%[/TD]

[/TR]

[TR]

[TD]Gadsden[/TD]

[TD=align: right]$55,000[/TD]

[TD=align: right]980[/TD]

[TD=align: right]+63%[/TD]

[/TR]

[TR]

[TD]Huntsville[/TD]

[TD=align: right]$58,000[/TD]

[TD=align: right]4,180[/TD]

[TD=align: right]+2%[/TD]

[/TR]

[TR]

[TD]Mobile[/TD]

[TD=align: right]$56,000[/TD]

[TD=align: right]4,990[/TD]

[TD=align: right]+44%[/TD]

[/TR]

[TR]

[TD]Montgomery[/TD]

[TD=align: right]$61,000[/TD]

[TD=align: right]3,170[/TD]

[TD=align: right]-1%[/TD]

[/TR]

[TR]

[TD]Tuscaloosa

[/TD]

[TD=align: right]$59,000[/TD]

[TD=align: right]2,240[/TD]

[TD=align: right]

+32

[/TD]

[/TR]

[/TABLE]

Based on your numbers a house that is $370,000.00 WITH A $20,000.00 down payment and an interest rate of 3.2% will have a payment of $2240,00/month for 30 years. Student loans of $30,000.00 for 20 years are about $300.00/month.

That is a a lot of cash. IF you can find a job out of school right away.

While it is great to dream....reality is a tough pill to swallow.

Be cautious of student debt ans getting in over your head.

Texas86RN

Has 8 years experience.

That's alot of good advice for you to consider, don't get in over your head :yes:

Thank you for the advice. This is apart of my research actually. I believe from doing my own online searching i was receiving a lot of over the top and unrealistic answers of salary and home pricing and wasn't looking in the right places because I don't really know where to look. In no means do I want to get in over my head, that's why I wanted to know somewhat where I would stand financially as a nurse and after answers from you knowledgable people, I know a $400,000 house would be over my head.

nursemeanie

Has 10 years experience.

Generally your housing shouldn't be more than 1/3 of your income...also, if you make one extra mortgage payment a year, a 30 year mortgage is paid off in 20 years.

KelRN215, BSN, RN

Has 10 years experience. Specializes in Pedi.

Generally your housing shouldn't be more than 1/3 of your income...also, if you make one extra mortgage payment a year, a 30 year mortgage is paid off in 20 years.

You know, when I bought my house I was doing just that and paying extra on my mortgage every month... then I met a financial planner at bar trivia and he said he advises people AGAINST doing this because your mortgage interest is your biggest tax deduction and 30 years from now, you'll probably be in a higher tax bracket because you'll be worth more money and then will end up paying more taxes if you lose your biggest deduction.

nursemeanie

Has 10 years experience.

That's true, and should be considered as well. It's just a faster

way to pay off your house and possibly have less expenses when you may be thinking of working less or not working altogether. Six of one, half a dozen of the other I suppose!

Long story short, you won't be able to get a house that expensive. I live in California, income is higher than AL, my house was 275, and that is our MAX. Granted taxes might be a bit different for you, but it isn't going to allow you THAT much wiggle room. Unless you have a large downpayment squirreled away, I would start limiting your searches so you can dream within your price range.

joanna73, BSN, RN

Specializes in geriatrics.

Agreed. Jobs are not plentiful anywhere. You also need money for savings, emergencies and life. If you're dumping all of your money into a mortgage and loans, home ownership will be a burden.

Based on an income of 90,000 for example, I would not recommend buying anything above 250,000. Also consider that interest rates rise and fall. When the rates increase, your mortgage payments increase.

I've crunched the numbers various times because I am soon going to buy a condo. I don't want the upkeep involved with a house. Based on the fact that I don't want to carry a mortgage higher than 1400 a month, my maximum is 200,000. The bank would lend me almost double that amount but it's not worth the debt load.

There are various mortgage calculators available online through all the lending institutions. Start plugging in your numbers so you'll have a realistic scenario of how much a mortgage and all the incidentals cost.

Ok. See I was confused because I took $500,000 divided by 360 months (that's how many months are in 30 years) and got about $1300 a month and by the nurse salary on indeed.com (which I now know is inaccurate) I would have been making that much per week, plus my husbands income, so I believed it was somehow doable. BUT I know nothing about home buying and wasn't sure about the nurses salary so I knew my numbers could possibly be way off. Thanks for the accurate information!

Rose_Queen, BSN, MSN, RN

Has 15 years experience. Specializes in OR, education.

Ok. See I was confused because I took $500,000 divided by 360 months (that's how many months are in 30 years) and got about $1300 a month

This would only work if your interest rate is 0%. With my mortgage interest rate of 4.5%, only about 20% of my monthly payment is going towards paying off the principle. The rest goes to interest and escrow for my homeowners insurance and taxes.

KelRN215, BSN, RN

Has 10 years experience. Specializes in Pedi.

Ok. See I was confused because I took $500,000 divided by 360 months (that's how many months are in 30 years) and got about $1300 a month and by the nurse salary on indeed.com (which I now know is inaccurate) I would have been making that much per week, plus my husbands income, so I believed it was somehow doable. BUT I know nothing about home buying and wasn't sure about the nurses salary so I knew my numbers could possibly be way off. Thanks for the accurate information!

You neglect interest, homeowner's insurance, taxes, PMI if you can't put at least 20% down. And, at the beginning, the majority of your monthly payment goes to interest. My mortgage is WAY less than 500,000 and my payment is way more than $1300 a month... with a 3.625% interest rate, less than the going rate nowadays.

I suggest you take a first time homebuyer's course. If you have student loans, that will lower the amount a mortgage lender is willing to lend because your debt to income ration can only be so high.

KelRN215, BSN, RN

Has 10 years experience. Specializes in Pedi.

Agreed. Jobs are not plentiful anywhere. You also need money for savings, emergencies and life. If you're dumping all of your money into a mortgage and loans, home ownership will be a burden.

Based on an income of 90,000 for example, I would not recommend buying anything above 250,000. Also consider that interest rates rise and fall. When the rates increase, your mortgage payments increase.

I've crunched the numbers various times because I am soon going to buy a condo. I don't want the upkeep involved with a house. Based on the fact that I don't want to carry a mortgage higher than 1400 a month, my maximum is 200,000. The bank would lend me almost double that amount but it's not worth the debt load.

There are various mortgage calculators available online through all the lending institutions. Start plugging in your numbers so you'll have a realistic scenario of how much a mortgage and all the incidentals cost.

Interest rates can only increase in the US if you do an ARM (adjustable rate mortgage). Most mortgages are a fixed interest rate that cannot be changed.

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