My Dream – Budget
The first part of this analysis required that I look at how much it would cost me to build my home. Plans will cost me little because I designed my own home and will only need to get copies for the city so that my plans can be approved. The property I already own, and all utilities are already on the property so I will not have to pay for any of that either. On the property there is already a over-sized 2-car garage that I intend on attaching my house to. My house will be a 3 bedroom 2 1/2 bath two-story home of approximately 2800 sq. feet.
Cost of my home:
To build my house it will cost me approximately $270,000. This is based off of current prices, but when necessary I rounded up to the nearest dollar amount. All aspects, except tile and wood flooring, include the cost of labor (for the wood floor and tile I will be doing it myself). With things such as the appliances I based the price off of a average cost of the appliance that I want.
The next step that I took was to find out about the interest rates and payments that I would be looking at. The average interest rates in Oregon range from 5.500 to 6.125, so I based my calculations off of the high rate of 6.125.
Looking at the lowest interest rate I would need to have a combined income (before taxes) of $73, 630. At the high interest rate of 6.125 I would need a combined income of $78, 238, which would make my monthly payments $1,830. The monthly payment includes property taxes and insurance.
Next I looked at what my expenses would be expected to be and how much I would have to make to add to the other person’s income who will be building the house with me.
I was able to determine that (before taxes) I would have to find a job that would pay me almost $50,000 dollars a year in order to even qualify for the loan. This seems almost impossible seeing as I am going to be just getting a job and have never had a job before, I just doubt that anyone will be willing to pay me that much.
I decided to look at how much I would need to make to be able to pay all of the bills every month not thinking about qualifying for the loan, just making the payment. I did this calculation with after tax amounts so that I would easier be able to determine how much money I would have to take home each month.
In this case I would only need to make $24,000 a year after taxes in order to no go into debt. This seems much more likely, but there is still the issue of qualifying for the loan. I will simply have to wait until I get a job to determine whether or not this is feasible, but at least I now know how much it is going to cost and what kind amount of monthly payment I would be looking at.
