Can we afford a monthly mortgage payment of $4900?

Anonymous
Anonymous wrote:How much is the house with a $5k/mo mortgage? Doesn't seem crazy to me.


5K/month is 800K mortgage. So a $1 million dollar home assuming 20% down.
Anonymous
Anonymous wrote:Our HHI is $350k and we have around $2000 a month in debt with one toddler in full time daycare in Montgomery County. Plan to do public school in 2-3 years. I recently had a promotion and a raise of an additional $2000/month net so we thought we could easily go from our current $2200/month mortgage to $4200 but we've found a house we really love and are thinking about stretching our budget a little. I am a little worried. Sound outrageous? Anyone else with a mortgage payment close to $5000?


Yes.

Why? Why do you want to move?
Anonymous
Commute is awful - up to 1.5 - 2 hours one way for one of us.
Anonymous
$60K a year in mostly interest?

LOL
Anonymous
You'll be more than fine. Seriously.

DH and I make combined around $250K. Have 2 kids in daycare - $2800/month - and pay around $4500/month for a mortgage. And we still max out our 401(k)s and save in 529s and an emergency fund. And travel, gamble and take vacations. We have no other debt, and paid off our student loans years ago.

I can't get over how conservative some folks are here. My philosophy is to be prudent, but have fun living while you can!
Anonymous
Anonymous wrote:You'll be more than fine. Seriously.

DH and I make combined around $250K. Have 2 kids in daycare - $2800/month - and pay around $4500/month for a mortgage. And we still max out our 401(k)s and save in 529s and an emergency fund. And travel, gamble and take vacations. We have no other debt, and paid off our student loans years ago.

I can't get over how conservative some folks are here. My philosophy is to be prudent, but have fun living while you can!


seriously? OP, I totally disagree. We are in a similar position to you. Make $305K combined with about $2000k a month in student loan debt. Current mortgage is $3000k or so plus $1500 for daycare. Assuming we have another kid soon, there may be a year of overlap. We are contributing but not maxing out 401ks and haven't started contributing to the 529 yet. I really don't know how other people are saying that a $5000k mortgage is doable. Where is the money coming from? I don't think this PP appreciates what taking $2k a month to pay off student loans does to a budget. We aren't super frugal b/c we both work -- we pay for a cleaning lady, eat lunch out, socialize with our friends -- not extravagently to any of this but still. In terms of saving money if we need another car, or house repair, or what not --- I'm wouldn't feel comfortable with such a large mortgage.
Anonymous
Prepare for the rain because not every day is sunny. What would happen if one of you lost your job, got sick, couldn't work for whatever reason? What if property taxes on this house go up substantially in the next 3-5 years?
What I'm wondering is- what kind of cushion do you have to prepare for any of these things happening?
Anonymous
Excellent point about property taxes! In MoCo they seemed to have gone down, but they will go up again --- honestly, I think they will likely jump up significantly in the next 3 years or so --- so you might want to factor that in (perhaps ask what the taxes were 2 years ago to get a ball park on what they might be when home values go back up again). And if you are looking at a million dollar home, then I'm guessing you will live in an area where camps and activities are more costly. We live way out in Olney and pay thousands each summer for decent camps --- I'm guessing camps in your neck of the woods are even more costly. And activities are expensive. Music lessons, karate, dance = cha ching. Lacrosse gear and team costs are in the $500 range (for a short spring season). This might sound like an odd question: if you are religious and plan to go the formal education route (hebrew school, etc.) then you should brace yourself for those costs as well. And I won't even go into the house-related expenses for a million dollar home. Although you should think about heating and a/c costs (likely to be much more than what you pay now). How high are the ceilings? How many windows? How drafty?
Anonymous
Our mortgage is just under 5,000K a month and our HHI is similar to yours, OP.

Our only childcare expenses are after-school classes, soccer, etc. As far as summer camps go, I own a camps business, so the kids go there for free in the summer. We've also budgeted $350.00 a month for evening babysitters in case we go out.

We live very comfortably, take great vacations, and still are able to save for college, max out the 401K's etc.

Anonymous
Anonymous wrote:OP here - monthly debt is student loans and car payment. We have no credit card debt.


The thrift police are at it again. We're in a similar income range, have the same debt, and also have no childcare (just $2500 a year for preschool). We could comfortably afford that mortgage while still saving for college, retirement, and home repairs, taking a vacation, shopping at Whole Foods, etc. We're pretty conservative with our money and spent a year watching where our money goes and sticking to a budget while we looked for a home.
Anonymous
Anonymous wrote:
Anonymous wrote:OP here - monthly debt is student loans and car payment. We have no credit card debt.


The thrift police are at it again. We're in a similar income range, have the same debt, and also have no childcare (just $2500 a year for preschool). We could comfortably afford that mortgage while still saving for college, retirement, and home repairs, taking a vacation, shopping at Whole Foods, etc. We're pretty conservative with our money and spent a year watching where our money goes and sticking to a budget while we looked for a home.


You have just $2500 a year for preschool and no childcare payments and she has one child in full time daycare (my guess would be 1200-1800 a month) and since she is working will have ongoing childcare expenses (before/after care, camps etc). That's a big difference.

I think a lot depends for OP on whether they are going to have another kid.
Anonymous
We are right about there and there is not much left over, though we can afford it. We have a $350K HHI and our PITI is $4500. We have $2600 in childcare costs. We save for retirement, pay sizable life/disability insurance policies (ouch!), and our building our emergency fund back up from 6 mo. to 1.5 yrs after having tapped it partially for the downpayment on our new home (moved from DC district w/ no good schools to be in MoCo for good schools). We are not currently contributing to college savings at the moment; there is not enough excess to do so at the moment, but once we have our 1.5 yr savings cushion built back up, we'll start college savings again. I think you can do it, but without a ton of excess.
Anonymous
Anonymous wrote:
Anonymous wrote:Our HHI is $450K. Our mortgage payment is $5K/month (15 year and we have 75% equity in the house) and we spend $5K/month in childcare (3 kids). We have no debt and we max out on 401Ks, 529s, etc. We do save in addition to that, but we don't have much left over. Our vacations are funded by airline/hotel points and shopping is all at Target and Costco.



Wow. Our HHI is $435K and we save about 35% of our net income.


Wow. So not helpful to the conversation. Do you have an answer to the question? Or do you just want to brag about how much your husband makes?
Anonymous
If the OP had no student loans and no car payment then it might be OK. I would not do it in OP's position.

If you can't pay cash for a car then don't further extend yourself. We had leased 2 years ago but the terms were great.

http://www.irs.gov/taxtopics/tc505.html
Anonymous
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:OP here - monthly debt is student loans and car payment. We have no credit card debt.


The thrift police are at it again. We're in a similar income range, have the same debt, and also have no childcare (just $2500 a year for preschool). We could comfortably afford that mortgage while still saving for college, retirement, and home repairs, taking a vacation, shopping at Whole Foods, etc. We're pretty conservative with our money and spent a year watching where our money goes and sticking to a budget while we looked for a home.


You have just $2500 a year for preschool and no childcare payments and she has one child in full time daycare (my guess would be 1200-1800 a month) and since she is working will have ongoing childcare expenses (before/after care, camps etc). That's a big difference.

I think a lot depends for OP on whether they are going to have another kid.


You're totally right. I get so lost in these threads that I forget who has childcare expenses and who doesn't. If we were paying for daycare or a nanny, we could not carry that much mortgage. I should have reread the OPs post before responding!
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