Acceptable Salary to Debt Ratio

[yupster567]

Assuming I take the job I am summering at right now, I will be making $80k in a secondary market.  Definitely not amazingly high, but I am very young and I've never had a job where I wasn't paid hourly.

However, I will also have about $110k of debt.  Is is still possible to purchase a home on this salary and debt?  Still possible to keep my head above water?

I just don't understand how people coming out of UG with debt can saddle law school debt on top of it.

[SCK2008]

Maybe someone can kick around my idea to see if it makes sense...

Assuming you're Loyola LA, it will take you a few years to save the $ to buy a 400k starter home/condo here...

But since you have the extra debt, its more like you'll be buying a 500k condo (the 400 for the condo + the 100k in loans) so it will just take a couple/few years more to save for the down payment...

In other words, my theory is that you're in okay shape, as long as you are frugal in the beginning and stick to reasonable spending limits with your 80k...

[Changed Name]

Disclaimer:  I don't pretend to really know much about how much debt you'll be able to manage or whatever.

I'm just coming up with a scenario in which you could possibly pay back your debt quickly.

If you take home 80K, you'll roughly be left with 50K after taxes (right?). So, that's about 4K a month.

Assuming, you're in LA, and you have a roommate, etc.  You could be looking at spending in the ballpark of 1K for rent, utilities, parking.  And then, about another 500 - 1K for miscellaneous expenses (insurance, hobbies, ??).  If you can somehow manage to save 2K - 2.5K a month, you'll be able to save from 24K - 30K per year.

Figure out how much of that you'll want to use to payback debt and how much to put into savings. 

Also, but, when you're thinking about purchasing a home, you may also be married and have a double income (this is really why people get married, haha).

[Lampshade Punk]

Disclaimer:  I don't pretend to really know much about how much debt you'll be able to manage or whatever.

I'm just coming up with a scenario in which you could possibly pay back your debt quickly.

If you take home 80K, you'll roughly be left with 50K after taxes (right?). So, that's about 4K a month.

Assuming, you're in LA, and you have a roommate, etc.  You could be looking at spending in the ballpark of 1K for rent, utilities, parking.  And then, about another 500 - 1K for miscellaneous expenses (insurance, hobbies, ??).  If you can somehow manage to save 2K - 2.5K a month, you'll be able to save from 24K - 30K per year.

Figure out how much of that you'll want to use to payback debt and how much to put into savings. 

Also, but, when you're thinking about purchasing a home, you may also be married and have a double income (this is really why people get married, haha).

no way you lose 40% in taxes.  I'd say 20 - 25% tops. 

[SCK2008]

Then what are you worried about??  Buy two homes and rent one out...

[StevePirates]

It seems as though my whole check will be going to paying down debt.

Mortgage.  Fun etymology.

[OConnorScribe]

Hey I'm gonna owe $160-70K when I get done ... I wish I was you. :-)

[EdinTally]

http://www.mortgagecalculator.org/

[Esco]

Hey I'm gonna owe $160-70K when I get done ... I wish I was you. :-)

meee tooo! fuxK!

[mfm028]

I think that even with that debt load you should be okay.  If your wife works and has a decent job (40K+) you should be fine to buy a reasonable ($300K) house and be able to have enough left over to live off of after the mortgage and student loan payments.  If your wife doesn't work then maybe lampshade's idea would be the best; get a little place and save save save or pay off that loan ASAP.