If your HHI is 200K, how much house would you buy?

[Anonymous]

We've been struggling with this issue. Our condo pmt. is currrently about $2,000/mo and daycare is $1,700. Plan is to stay in condo until DC starts school, bank the daycare $$ for 2 years for a downpayment, then look for a larger place with mortgage around $2,500-$2,700. We may miss out on the great interest rates, but we'll also have a better handle on the school situation and what location would ideally suit us.

[Anonymous]

OP, we have a HHI of $250k and our mortgage is about $2500. I love this payment amount because we can agressively save without significantly compromising our lifestyle. We have 2 kids in daycare. Like you, I believe I'd rather oversave for retirement than overspend now, so we fully fund 2 401ks and 2 IRAs. We also save for college ($10k/year total) and have $500 in student loans per month. No car payment right now, but will probably need to replace one of them in the next few years. But since we've been able to save, we can easily pay for the car in cash. I think we would be very comfortable with a mortgage payment of up to $3000. Maybe up to $4000 if we weren't paying the double daycare bill.

[Anonymous]

Anonymous wrote:I am house poor and it sucks. That said, I don't have daycare or student loan checks to write every month.

HHI of $235k, mortgage of $730k.

Are you NUTS?

That's just stupid.

[Anonymous]

Are you planning more kids? When our HHI was yours, we spent $2800 a month on daycare and had a $2800 mortgage. It was tight but doable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I read your article and I think a little bit of critical thinking is useful here. The article discusses someone making 40k a year saving 10% 4k a year. Your hhi is 200k a year. Do you think saving 40k a year is necessary for a reasonable retirement? Not to mention as a fed you will get a pension as well which should be significant. It can be argued housing will beat the stock market but like everything else not guaranteed. Back in 2000 the s&p was well over 1500. Dividend adjusted its 120s up about 13% since then. The housing market is up 50 to 100% since 2000. I think financial planners get paid more nased on how much is invested so I think that would be a direct conflict of interest no pun intended.
The wife and I have never had school loans so cant comment on that.

What planet are you living on? Except for Feds vested in the old civil service system, there are no defined benefit pension plans for federal government employees. Hasn't been in like 25 years.

Um, of course there is. Ever heard of FERS? Duh.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am house poor and it sucks. That said, I don't have daycare or student loan checks to write every month.

HHI of $235k, mortgage of $730k.

Are you NUTS?

That's just stupid.

I was thinking the same thing. Our HHI is $350K, mortgage is $650K and we feel house poor. We do pay approx. $1500/month for a pt nanny and about $15,000/year for pt preschool, so maybe that's the difference.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am house poor and it sucks. That said, I don't have daycare or student loan checks to write every month.

HHI of $235k, mortgage of $730k.

Are you NUTS?

That's just stupid.

I kind of agree. Our HHI over double ($500k) and our mortgage is just a little over that, with very little other debt (one car and about $15k in student loans). I would never have that kind of mortgage with that income, but that is just me...

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am house poor and it sucks. That said, I don't have daycare or student loan checks to write every month.

HHI of $235k, mortgage of $730k.

Are you NUTS?

That's just stupid.

I was thinking the same thing. Our HHI is $350K, mortgage is $650K and we feel house poor. We do pay approx. $1500/month for a pt nanny and about $15,000/year for pt preschool, so maybe that's the difference.

Yes, that would be the difference. The monthly differential in our mortgages is about $400 and I don't have those other expenses.

To the other pp, no, not nuts. The mortgage is less than 30% of our net take home.

[Anonymous]

We have HHI of 200k and monthly mortgage payment of $2,400. We feel this is as much as we were willing to pay given two kids in daycare (2k a month). We have no other debt and the cars are paid for and in good shape.

We just bought the house for 475k, 2,300 sq feet, 5 bedrooms, and we love it, so we don't feel like we should have gotten more.

[Anonymous]

When people are quoting mortgage amts are they including escrows for taxes and insurance? Because we have a HHI of about 250k and we pay about $4k/month total and don't have a problem saving (or spending on fun stuff). Admittedly we don't have childcare expenses, car loan, or student loans though.

I would say 15% with match is the min. I would consider as ok for retirement (not to say you can't spend less, but I wouldn't intentionally spend less).

Also note OP you will get the mortgage interest tax break, which is very handy especially when you first buy. I think on a 30 year loan. approx. 2/3 or more of your loan payment will be interest the first 5 years, and half will be interest for the first 10 years. So if you are paying $2000 in principal and interest, then $1200 or more of that will be deductible, so in a 30% tax bracket (combined state and fed), you will be getting a refund now of $360/month (although you can lose some portion of that through phaseouts etc.).

[Anonymous]

Wow, we have a HHI of 240k and pay almost $4000 in rent. We feel like we have plenty of disposable income, plus we have $1700 nanny expenses per month and we're saving about $3000 per month towards our down payment. I guess it's because we're not paying homeowner's insurance and real estate taxes? I didn't realize that some people had such low monthly mortgage payments at the same HHI.

[Anonymous]

Anonymous wrote:I read your article and I think a little bit of critical thinking is useful here. The article discusses someone making 40k a year saving 10% 4k a year. Your hhi is 200k a year. Do you think saving 40k a year is necessary for a reasonable retirement? Not to mention as a fed you will get a pension as well which should be significant. It can be argued housing will beat the stock market but like everything else not guaranteed. Back in 2000 the s&p was well over 1500. Dividend adjusted its 120s up about 13% since then. The housing market is up 50 to 100% since 2000. I think financial planners get paid more nased on how much is invested so I think that would be a direct conflict of interest no pun intended.
The wife and I have never had school loans so cant comment on that.

OP here: I understand a lot of folks think I am very conservative re: retirement. But I can't guarentee that my pension will be here forever and even if it is, I think the most I am going to get is like 30K a year (which of course is fantastic compared to nothing, but certaintly nothing to live off of). However, I don't feel comfortable reducing it beyond 15%, when I can just wait a bit longer and save up money to buy a house.

That being said. We are thinking of reducing our retirement contrbutions for one year to give our savings a boost (but it makes me nervous).

[Anonymous]

We have a HHI of approximately $250K; for years we rented for $2300 / mo and saved aggressively. We just bought and have a month housing payment (including mortgage, taxes, escrow and HOA) of just under $3800. We are comfortable with it because when we were paying $2300, we were saving about $1500/mo for our downpayment fund without really trying.

We have ~$1300 in childcare expenses / mo; $500 in student loans; no car payment. We have not fully funded our retirement funds (we do the max to get matching), but we plan to fully fund them in a few years (after DS gets out of daycare and goes to pub school). That was a calculation we made based on the fact that DH and I are both in our very early 30's, so we have "time."

[Anonymous]

HHI $240K, PITI (mortgage plus interest and taxes--don't forget these!) is $3000. We had a conventional 80/20. One thing to consider if you stay in DC is eventual private school tuition for your children--$32000/kid/year.

[Anonymous]

Anonymous wrote:HHI $240K, PITI (mortgage plus interest and taxes--don't forget these!) is $3000. We had a conventional 80/20. One thing to consider if you stay in DC is eventual private school tuition for your children--$32000/kid/year.

OP here: Sadly for that reason we can't live in the district. I really wish we could. DH advocates for public education so we can't do private. But yeah, I am thinking 2500 PITI not just mortgage.