Nursing salary and buying a home?

Nurses General Nursing

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KelRN215, BSN, RN

1 Article; 7,349 Posts

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

65 Posts

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!

lrobinson5

691 Posts

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

4,767 Posts

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.

applesbananas

17 Posts

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!

Editorial Team / Admin

Rose_Queen, BSN, MSN, RN

6 Articles; 11,663 Posts

Specializes in OR, Nursing Professional Development.
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

1 Article; 7,349 Posts

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

1 Article; 7,349 Posts

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.

Editorial Team / Admin

Rose_Queen, BSN, MSN, RN

6 Articles; 11,663 Posts

Specializes in OR, Nursing Professional Development.
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.

And this kind of confusion is why every high school student should be required to take a class on personal finance before graduating. So many young people have gotten themselves in deep doo doo because of a lack of knowledge.

applesbananas

17 Posts

And this kind of confusion is why every high school student should be required to take a class on personal finance before graduating. So many young people have gotten themselves in deep doo doo because of a lack of knowledge.

I agree!

joanna73, BSN, RN

4,767 Posts

Specializes in geriatrics.

But that's accurate for the term your mortgage is locked in. Most mortgages need to be renewed after 5 years or so, at which point, interest rates may change.

OP, keep in mind additional costs such as heat, hydro, land tax and repairs and upgrades.

Editorial Team / Admin

Rose_Queen, BSN, MSN, RN

6 Articles; 11,663 Posts

Specializes in OR, Nursing Professional Development.
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.

And those reasons are exactly why I only took out less than 85% of what I was approved for. I also had a hefty down payment saved up that would also leave me with a fair amount of emergency cash at hand, refinanced my mortgage interest from 6% to 4.5% when I was eligible and interest rates were low, and control my credit card debt primarily to what I can pay off before I get hit with interest charges (AKA, I treat my credit card like cash- if I don't have the cash, the credit card doesn't get used except in emergency or no other option scenarios, like the massive home repair bill I had to pay to make my home livable again).

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