Salary vs House Cost

[Anonymous]

HHI $250k + rental income , house $790k, mortgage $600k. No other debt.

[Anonymous]

The issue is that housing in the DC area in good school districts are expensive - period! the 3xs your salary rule goes out the window, unless you bought before 2004 and inside the beltway.

So all the smug folks on here who are proud of their high HHI and low mortgages are scewing (sp?) the responses and reality to be quite frank.

We have a HHI of $320K, and if we were in the market, our price range would be $800K-$1M max and even that buys you a shit box....

[Anonymous]

We make around 260k. Mortgage is around 360k. 15 year loan. Kids in aftercare/public school. I don't understand how people afford more. I still feel like we are not saving enough for college.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We just bought with a mortgage three times the higher of our two incomes.

Wow, if we did that, we'd be limited to a mortgage of about $500k.

And?

I think some of us are laughing at the "limited" comment.

Why? If we included both incomes, we'd be able to afford a mortgage of nearly twice that according to the 3x rule. It seems mad to exclude an entire income.

[Anonymous]

HHI of $175, Mortgage of $550. Home is worth 700k. Purchased for 600k in 2008. We were not in a position to buy any earlier. If we had bought 5 years earlier our mortgage would be 1/2 as large. It is our biggest expense and we both need to work, but our jobs are very stable. I just consider it the price of living in the DC area.

Anybody who bought a house before 2005 around here can shut the hell up right now.

I also think of it as a giant piggy bank of forced savings. We bought inside the beltway with great schools and we have and will likely continue to retain value. That 550k mortage will be paid off in 25 years, and then we will be sitting on the 600k in equity (or whatever the 25 years from now $ equivalent is), rather than renting the whole time and having nothing to show for it. Plus we get a tax deduction, and we are frugal in most other areas of our lives. Low fixed rate mortage and no PMI either.

[Anonymous]

Almost 4x our salaries: $160K HHI, $620K house. 22207. We put 20% down.

We realize that we reached for our house, but we have no other debt other than the mortgage (no student loans, no car payments) and have no childcare costs. We also have a lot of future earning potential, seeing as how we're still in our 20s. We are both saving for retirement (401Ks, Roth IRAs) and also save and have 6 months expenses in an emergency fund. We don't pinch pennies and we enjoy life (eating out, vacations, etc.).

[Anonymous]

Anonymous wrote:We make around 260k. Mortgage is around 360k. 15 year loan. Kids in aftercare/public school. I don't understand how people afford more. I still feel like we are not saving enough for college.

lol. where do you spend your money? certainly not on housing, though you are choosing much higher payments b/c of a 15 year loan. what kind of cars do you drive? where do you vacation? and how much are you saving for college? too much?

[Anonymous]

Anonymous wrote:Almost 4x our salaries: $160K HHI, $620K house. 22207. We put 20% down.

We realize that we reached for our house, but we have no other debt other than the mortgage (no student loans, no car payments) and have no childcare costs. We also have a lot of future earning potential, seeing as how we're still in our 20s. We are both saving for retirement (401Ks, Roth IRAs) and also save and have 6 months expenses in an emergency fund. We don't pinch pennies and we enjoy life (eating out, vacations, etc.).

you DID NOT reach for your house. given your debt loan, your house is extremely conservative and very affordable .

[Anonymous]

At the time we bought, our HHI was around 200k. We paid 600K for a SFH in Tysons and put down 11%. This was in late 2007. Our income peaked at around 265K when I was in Biglaw, and is now around 190K. We currenly owe 512K.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We make around 260k. Mortgage is around 360k. 15 year loan. Kids in aftercare/public school. I don't understand how people afford more. I still feel like we are not saving enough for college.

lol. where do you spend your money? certainly not on housing, though you are choosing much higher payments b/c of a 15 year loan. what kind of cars do you drive? where do you vacation? and how much are you saving for college? too much?

Yes the 15 year explains some of it. Save 1000/month for college (two kids). Paid off cars. Cheap vacations.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We make around 260k. Mortgage is around 360k. 15 year loan. Kids in aftercare/public school. I don't understand how people afford more. I still feel like we are not saving enough for college.

lol. where do you spend your money? certainly not on housing, though you are choosing much higher payments b/c of a 15 year loan. what kind of cars do you drive? where do you vacation? and how much are you saving for college? too much?

Yes the 15 year explains some of it. Save 1000/month for college (two kids). Paid off cars. Cheap vacations.

$6K/year per kid is pretty aggressive considering you will likely have no mortgage then.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We make around 260k. Mortgage is around 360k. 15 year loan. Kids in aftercare/public school. I don't understand how people afford more. I still feel like we are not saving enough for college.

lol. where do you spend your money? certainly not on housing, though you are choosing much higher payments b/c of a 15 year loan. what kind of cars do you drive? where do you vacation? and how much are you saving for college? too much?

Yes the 15 year explains some of it. Save 1000/month for college (two kids). Paid off cars. Cheap vacations.

so lets guess your mtg payment is $3K/month. you are saving way too much for college, but that is another $1K/month. no car payment. Your take home pay, after health insurance, etc., is probably around $14K/month. So even if you both max out 401Ks, you have PLENTY of money. what are you possibly talking about?

[Anonymous]

We bought a $350K house when our gross income was $184,000.

[Anonymous]

No debt: no car loans, no outstanding student loans, credit card debt, etc. Kids go to public school (one more year left of private preschool for youngest). No outside $ help for downpayments. DINKS for 7 years before kids--saved a lot, invested heavily. Kids 529s are stacked--thinking of 'pay now' option.

First home 2004--HHI $275k---home price $605k (now est. $775k). Mortgage $540k. Lived there 3 years--been renting it since then...rent now 2X times our montly mortgage. long term leases, no hassle. huge demand given location.

Second home 2009--HHI $475k--home price $1.050 million. Mortgage $600k. this house is now estimated at $1.175 (we've done nothing in those 3 years).

I don't think salary alone is enough to know how much to spend. There are so many other factors--life goals, lifestyle, spending habits, private or public school, personal debt, etc.

[Anonymous]

HHI of about $100K, mortgage of $400K. No other debt, no car payments, and my ex's child support pays for full-day preschool. I'm able to save for retirement and college, though I had more disposable income when we had a renter in our spare bedroom. (she just moved out; i'm considering getting another one.)

would have preferred to spend less, but the only cheaper north arlington housing was condo, and the condo fees would been significant. (and non tax deductible.)