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Buying a house in US - taxes/payments/earnings question

Buying a house in US - taxes/payments/earnings question

Old Sep 4th 2012, 6:28 am
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Default Buying a house in US - taxes/payments/earnings question

Hi.
I live in the UK and will be moving to the US at some point within the next year. I know property prices can change but this is not quite the question.

I work for a US client and get paid hourly. So yes I make, thankfully, great money and have always done even working within the UK.

I am wondering typically, how much does one earn to be able to live comfortably/just enough to be able to pay off mortgage/taxes etc... in Texas?

I mean, I am looking for around a $180K-$200K house. I dont know the US system or what the taxes are for and how much they typically can be. Same thing with the working wage earnings.

I am just trying to roughly calculate the cost and would love and appreciate some advice about how it generally works in the US.

how much do you pay a month for mortgage? And are you able to comfortably afford it and have savings at the end of it per month including after paying taxes, bills, food etc... ?

I am looking around $600-$700/month to pay for the mortgage but everything else after that I don't understand. I currently rent in the UK so renting is different than obviously buying a house and I know the systems are different

thank you
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Old Sep 4th 2012, 11:49 am
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Default Re: Buying a house in US - taxes/payments/earnings question

Originally Posted by firehawk View Post
Hi.
I live in the UK and will be moving to the US at some point within the next year. I know property prices can change but this is not quite the question.

I work for a US client and get paid hourly. So yes I make, thankfully, great money and have always done even working within the UK.

I am wondering typically, how much does one earn to be able to live comfortably/just enough to be able to pay off mortgage/taxes etc... in Texas?

I mean, I am looking for around a $180K-$200K house. I dont know the US system or what the taxes are for and how much they typically can be. Same thing with the working wage earnings.

I am just trying to roughly calculate the cost and would love and appreciate some advice about how it generally works in the US.

how much do you pay a month for mortgage? And are you able to comfortably afford it and have savings at the end of it per month including after paying taxes, bills, food etc... ?

I am looking around $600-$700/month to pay for the mortgage but everything else after that I don't understand. I currently rent in the UK so renting is different than obviously buying a house and I know the systems are different

thank you
If you don't know the area than I would recommend renting for a while to find your feet.
Will you be moving on your own? How big do you want? Do you want somewhere with land? Somewhere in town? Which town will be your nearest to work as that can make a huge difference. So many variables its hard to give you an answer without some more info.
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Old Sep 4th 2012, 12:50 pm
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Default Re: Buying a house in US - taxes/payments/earnings question

This is a really tough question to answer. It depends entirely on what area you're looking at. Even just within Houston, property tax can vary massively.

I have a $270k mortgage, pay about $1,400/month on the mortgage and then another $900/month for taxes, mortgage insurance premium etc). Tax rates like I say vary all over but we're at about 3% give or take so pay somewhere around $8-9k/year (I think - It's actually very hard to work it all out after homestead exemptions and I've owned for less than a year here so don't have an end of year bill to compare to).

It also depends a lot on lifestyle. You need a car in Texas. One per adult.

I would say that you would need to be on 6 figures to consider buying around $180-200k. I wouldn't personally want to do it on less as especially in Texas there are a lot of other costs to consider:

- Electricity - expect anywhere from $150-400 month depending on size of house and how you set your AC
- Water: I run about $100/month on a fairly big lot
- Cable TV/Internet: $150/month
- Car Insurance: At least $1000 per 6 months, in all liklihood more
- Yard work (you're welcome to do yours yourself but in this heat, unless you're really really keen, chances are you'll do like most people and get someone in to do it). Dependent on yard size but at least $25/wk in summer
- Car payment (unless you can buy outright). This is up to you, you can spend as little as $250/month up to unlimited really

Buying a house though is dependent on credit history (although if you move over with a big company they can sometimes help) and you won't have any when you move over. Life without credit history can be very expensive (I had to pay 3 months rent as security deposit at my first apartment here as I had no credit history).
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Old Sep 4th 2012, 2:39 pm
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Default Re: Buying a house in US - taxes/payments/earnings question

Something that hasn't been mentioned yet is how soon the OP can even get a mortgage. I had to be employed continuously for two years over here before our credit union would give us a mortgage, so that might be a factor.

Also, as someone mentioned already, I would rent and figure out the area first before buying a house. Buying and selling a house over here is a lot more expensive than in the UK as the commission for the estate agent is much higher (customary out here seems to be around 6%, in the UK it's usually closer to 2%) so buying the "wrong" house can get expensive quickly even if you don't do anything with it and resell it at the same price.
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Old Sep 4th 2012, 5:14 pm
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Default Re: Buying a house in US - taxes/payments/earnings question

Well a colleague within the company has a mom who is a Realtor. so thats not so much of a problem.

But the problem here is already that I dont want to rent straight away because:

1) I have ALOT of stuff to carry around
2) I have no means to transport the stuff as I dont drive
3) That rent money could be going towards a mortgage/downpayment.

sucks
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Old Sep 4th 2012, 5:19 pm
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Default Re: Buying a house in US - taxes/payments/earnings question

Originally Posted by firehawk View Post
2) I have no means to transport the stuff as I dont drive
You may have to reconsider that option in order to live in Texas, unless you want to live very close to your work and a supermarket.
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Old Sep 4th 2012, 5:21 pm
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Default Re: Buying a house in US - taxes/payments/earnings question

Originally Posted by firehawk View Post
Well a colleague within the company has a mom who is a Realtor. so thats not so much of a problem.

But the problem here is already that I dont want to rent straight away because:

1) I have ALOT of stuff to carry around
2) I have no means to transport the stuff as I dont drive
3) That rent money could be going towards a mortgage/downpayment.

sucks
It's a lot cheaper, in the long run, to rent for a few months while you decide where it is you want to live. The alternative is picking a place without much information - you may get lucky and love it, or you may hate living in that area, and if you try to sell and buy someplace else you'll have spent a lot more than the rent would have cost you. Look for a month-to-month renting lease. We were only in our rented flat/apartment for four months before buying, but it was time and money well spent.

But the biggest problem I see here is transportation. You don't drive, but you're going to live in Texas? US public transport is NOTHING like the UK's. How are you going to get around?
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Old Sep 4th 2012, 5:24 pm
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Default Re: Buying a house in US - taxes/payments/earnings question

Originally Posted by firehawk View Post
2) I have no means to transport the stuff as I dont drive
Outside of a handful of places (NYC, Bay Area, some parts of Chicago and err, that's pretty much it) you will have to drive, period. Public transport options are somewhere between extremely limited and non-existent.

There's a big difference to commuting by motorized vehicle in the UK because you prefer to (which is what I did on a 100-mile roundtrip, but I could take the train if I wanted to) and absolutely, positively having to have a working car that can get you to work because the nearest bus stop is seven miles away.

Last edited by TimNiceBut; Sep 4th 2012 at 5:27 pm.
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Old Sep 4th 2012, 5:27 pm
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Default Re: Buying a house in US - taxes/payments/earnings question

Which area of Texas? Houston is impossible without a car. You'd have to live on the bus route or tram route. Depending where your work is, that might not be an option. You'd also have to live by the grocery store. You'd struggle to get to the mall or socialize. It'd be pretty miserable IMHO. Maybe you'd hit it lucky with the bit of Texas you are considering, but the heat and humidity is a real barrier.
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Old Sep 4th 2012, 5:29 pm
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Default Re: Buying a house in US - taxes/payments/earnings question

Originally Posted by firehawk View Post
Well a colleague within the company has a mom who is a Realtor. so thats not so much of a problem.
Finding a Realtor is easy - dozens of them will appear as soon as you even think of buying a property ...

But the problem here is already that I dont want to rent straight away because:

1) I have ALOT of stuff to carry around
I don't understand this - nobody is suggesting that you move every week or every month - rent somewhere for a year and then think about buying.

2) I have no means to transport the stuff as I dont drive
Transporting your stuff is easy - you hire a mover to do it for you.

Not driving in the US will make your life extremely difficult unless you have a full time chauffeur - in Texas it will make life all but impossible.

3) That rent money could be going towards a mortgage/downpayment.
... or it could be going into a property that you later discover is in an area where you really don't want to live and which will cost you real money to sell ...
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Old Sep 4th 2012, 5:33 pm
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Default Re: Buying a house in US - taxes/payments/earnings question

Looking back at your previous posts, have you now sorted out a visa to move here?
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Old Sep 4th 2012, 6:11 pm
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Default Re: Buying a house in US - taxes/payments/earnings question

Originally Posted by Sally Redux View Post
Looking back at your previous posts, have you now sorted out a visa to move here?
The move which was previously to Seattle?
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Old Sep 4th 2012, 6:14 pm
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Default Re: Buying a house in US - taxes/payments/earnings question

The mortgage cost is easy.

cost of house = $200k
down payment 10% = $20k
amount of mortgage = $180k

assume 30 year loan and 4% interest, monthly payment = $860

The you'd need to add on the cost of home insurance, real estate taxes and PMI....that might add up to $300 or $500 a month. So if you budget $1500/month you should be safe.
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Old Sep 4th 2012, 6:38 pm
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Default Re: Buying a house in US - taxes/payments/earnings question

Originally Posted by Weeze View Post
Which area of Texas? Houston is impossible without a car. You'd have to live on the bus route or tram route. Depending where your work is, that might not be an option. You'd also have to live by the grocery store. You'd struggle to get to the mall or socialize. It'd be pretty miserable IMHO. Maybe you'd hit it lucky with the bit of Texas you are considering, but the heat and humidity is a real barrier.
+1 Houston is not feasible without a car. Public transport here is non-existent in real terms.

Originally Posted by nun View Post
The mortgage cost is easy.

cost of house = $200k
down payment 10% = $20k
amount of mortgage = $180k

assume 30 year loan and 4% interest, monthly payment = $860

The you'd need to add on the cost of home insurance, real estate taxes and PMI....that might add up to $300 or $500 a month. So if you budget $1500/month you should be safe.
Most areas in Houston at least are 3% property tax or there abouts. On a $200k house that's $6k/year or $500/month on its own. Additionally most areas here have an Home Owners Association (HOA) which can be $500 - $1000 per annum so factor in an additional $70/month. Some are more and some areas don't have them. So in Houston at least (I don't know about the rest of Texas), realistically I'd say at least $700 month on top of the mortgage for taxes and insurance.
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Old Sep 5th 2012, 3:04 pm
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Default Re: Buying a house in US - taxes/payments/earnings question

You will be pissing money down the drain if you buy within 12 months without living in the area.

You will be miserable if you don't drive and be a hermit.

Finding a house is easy, a mortgage less so, especially if you've got less than 30% down and even if you got one, it'll usually have a shit rate attached because you've got no US credit history, which also affects the cost of insurance and everything else.

If you've never lived in Texas, there's going to be so much that you won't even think to consider about the life style and type of housing, that certain things that might seem petty could have a huge impact on cost, such as running a pool, do you have to water the foundations, cost of termite prevention, etc, etc.
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