So currently I live in New York at age 23, with an income of around 45k per month. And here is my budget for moving out.

1. Qualifying Factors
– It’s important before you start looking at houses to know exactly what you can qualify for
– When I first started looking in New York I went to open houses for 700-800k homes
– Then I found out very quickly just because you can afford the mortgage doesn’t mean you can qualify. ( so today my budget is a lot lower between 300k-550k)

Factors:

My credit score: I spent the past 2 years really cleaning up and making sure it’s nice. Currently, I have a credit score of 761. But you can qualify for an FHA loan with a 580 ( just make sure to understand the terms)

My income: when buying a house they take the average of the first 2 years, and that’s the income they use to qualify you.
– Let’s use youtube as an example in 2019 we made 59k, and in 2020 we are on the pace to make 250k. The average is 154k ( which is a good income, but it doesn’t matter, if you have a 30-60k income you’ll be fine)

Debt to income ratio: ( this is to make sure you have enough free income to pay your house and all your cost of living)
– If you have a high income, but a ton of debt, they will not qualify you for the mortgage
– Banks look for 43% debt to income ratio anything higher than that and it’s usually too risky.
– To figure out your you can use the credit karma house buying calculator, or just search on youtube for debt to income calculator

Tip: just make sure the monthly payments on the house are not more than 33% of your monthly income after taxes. That’s the goal.

2. The House I want and where I want it
– I’m looking at houses in two different states Florida and Omaha Nebraska
– Florida to save money on income taxes
– And Nebraska for the low cost of living and great school for kids.

So here is House A: Florida
– This is around 500k and it’s a nice house with a nice yard
– And its also in a good area so it has some pretty good public schools also
– Total cost including Mortgage, insurance, and property taxes are $2,347 bucks. Z( 18% of my income)
– Down payment of 100k and closing cost of around 15k-25k

And here is house B: Omaha
– This house is around $344k, it’s beautiful and it’s in a nice area in Omaha and the schools are great
– Monthly Cost including Insurance, mortgage, property taxes, and HOA fee is only $1,890 ( that’s only around 15% of my income average)
– Down payment 68k and closing cost 10k to 17k

Obviously: it’s going to be a lot of money no matter what, but also keep in mind I plan on moving out in 2 years, so none of these hoses will be on the market by then, but my budget will still be the same.

3. Here is Cost of Living and Tax Savings

House A in Florida:
The mortgage is going to be $2,347
Utilities: $250 ( light, gas, sewage, and trash)
Internet Bill: $80
Food: $300
Car: 180 insurance and 50 gas
Extra: $300 ( phone bill, subscription and random stuff)

Total Cost of living: $3,507

Savings: Tax and rent
– The back Is rented for: $700
– Taxwise i only pay federal: $38,680
– Sales Tax: $835

Total Annual Cost: $73,199 ( without tax $34,519)

House B in Omaha:
The mortgage is going to be: $1890
Utilities: $250 ( light, Gas, Sewage, and trash)
Internet Bill: $60
Food: $300
Car: 180 insurance and $50 gas
Extra: $300 ( phone bill, subscription, and random stuff)

Total Cost of living: $3,030

Taxes:
– Sales tax: $800
– Income tax : $9,158
– Federal tax: $38,680

Total Annual Cost without tax: $36,360 ( with tax, $84,998)
Overall: it would $11,799 more expensive to live in Omaha

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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