How did you afford your $1M plus home?
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Anonymous
| We are at a loss. We do very well and live in a 700k townhouse in NW DC. We'd like to move closer to chevy chase area with better schools but the houses we would like are upwards of $1M. Our mortgage is currently 4500 (little down payment, FHA loan a few years ago). We are going to try to scrape together another $100k in downpayment over the next few years but not sure it will happen. How do you afford your $1M home? Our HHI is just over 400k but once you calculate family we need to help, nanny (we both have very long hours), etc, we're not able to sock away enough to really put together a large downplayment |
Anonymous
| I only have a few friends who have homes in that range. Two couples had equity from the sale of their North Arlington home, and both make good salaries. ($150K maybe?) Another couple has his salary (partner in law firm) plus her family money. A third couple has two decent ($100-$150K) salaries plus her trust fund. Generally the high-priced-house folks have some combination of high salaries, family money and equity from the previous house they bought at the right time. |
Anonymous
| And that is the truth.... basically you need family money or huge profit from a real estate sale to afford it! |
Anonymous
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Our house is worth around $1 mil now. It sure wasn't when we bought it, and even then, we had to broaden our definition of "houses we like" to be "acceptable neighborhood" + "adequate size" + "structurally sound."
We had to live with some very ugly rooms for a long time, but we survived. We started a family a few years after we bought our house, so with all the kid clutter everywhere, the house was going to look crummy anyway. |
Anonymous
| Similar situation here as the OP. I was thinking of a hardship withdrawal from 401K plan to get most of the downpayment -- not wise financially, but the only alternative I can think of. Silly? |
Anonymous
| We are a young couple who took a loss on a previous home and still managed to do it. Income about $200K/year but I am home so we don't have those expenses related to childcare. We used VA loan (not a lot down) and budget carefully because our $6,000 mortgage is a huge chunk. We have no other debts, no car payments, etc and it's doable but tight. We wanted to buy a house that we will stay in for 10+ years so after a couple years of owning should be able to loosen the budget. If we had used conventional financing we would not have had a big enough downpayment, so i guess for me the answer would be that eh VA loan allowed us to do so. |
Anonymous
| We lived in an apartment for a long time (even with kids) then traded up. And we have parents who have helped us (loan for down payment) as opposed to the other way around. |
Anonymous
Yes. Why would you do that? |
Anonymous
| Do you really need a $1M plus home to live in an area with good schools? If you really want to be in CC, could you go for a smaller or less updated house (in the $750-$800 range) and do improvements over time? That is how many people afford their houses--they didn't buy them at $1M. |
Anonymous
Hardship? Seriously? Yes, silly. |
Anonymous
Dang, that is a huge mortgage payment given your HHI. I don't understand why you would take on so much mortgage, especially after having taken a loss on a previous home. Is a $1M house really so important? |
Anonymous
| Saved 30% down from sales of previous homes. |
Anonymous
+1 That is insane. We make a similar HHI and I couldn't imagine paying that much for a mortgage. I'd have nothing left for retirement, 529, etc... |
Anonymous
Yes, it was important to us because we didn't want to move again in a few years. It is a huge expense to move and we wanted the kids to stay in one place and invest in our long term home. Not saying other people should take such a high mortgage, but we were fine doing so because my husband has a very stable job with high earning potential. Regardless, I'm just answering the question of how it's possible without family money or large real estate gains. |
Anonymous
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OP here. To 10:29- yes, we are hoping to find something for less than 1M and that might happen especially as new inventory comes on the market (its been slow). However, most of what I have seen that I really like is in the $1M plus range. Also, for the 7-800k range, I'd basically be getting exactly what I have now with a tiny yard (if any yard at all) and better public schools. The thought of spending 100k more to get almost exactly what I have just makes me ill. I can't believe how unaffordable DC has become. We've thought about going further out but as it is we see our kids about an hour a day so adding 30 minutes to a commute really has a negative effect.
Just hoping CC doesn't go drastically up before we can cobble together a down payment |