Can we afford this house? 600k

[Anonymous]

Dh and I are looking at a 3bed 1.5 bath home for 600k and taxes of 7k per year. We have 120k we can immediately use for the down payment and another 70k we could liquidate but don't want to right now. Jobs are very stable- hhi is 170k and reasonable to think it will be closer to 200k in the next 2-3 years. No student loans or other debt. One child with child care expenses of 1100 per month for 10 months of the year.

[Anonymous]

So the loan amount would be 480 with a hhi close to 200? I think this is doable. How would the payment compare to your current mortgage or rent? When will the childcare go away and do you expect to have more children?

[Anonymous]

What do you pay in rent now? I feel like this is doable but throw another kid in the mix and you might have to dip into that $70K at some point.

[Anonymous]

We pay 2300 and utilities are about 300 month. We probably won't have another for at least 3 years.

[Anonymous]

I think this is doable. Agree with PP that tough point could come with 2nd child, but once first child is in K (assuming public), things will ease, and then after both in public school, will ease further. This is probably obvious but we had more or less the identical situation as you several years ago and this was our experience.

[Anonymous]

You're totally fine.

[Anonymous]

Anonymous wrote:We pay 2300 and utilities are about 300 month. We probably won't have another for at least 3 years.

Then yes. I'm assuming with the tax benefit your mortgage will just be a tiny bit more, right?


You need to do the math. Figure out what the payment will be, including taxes and insurance, and then estimate the annual tax benefit (taxes and interest times tax bracket). Now compare. Is it close?

Will you have some wiggle room and be able to avoid dipping into savings if you need a new car, have a repair etc? Can you float childcare for two for one year if you get pregnant before you planned?

[Anonymous]

Totally do-able.

[Anonymous]

We have very similar numbers and it's totally fine. We are fairly risk averse and frugal, and I'm very comfortable with our debt/income ratio and cash flow

[Anonymous]

Anonymous wrote:Dh and I are looking at a 3bed 1.5 bath home for 600k and taxes of 7k per year. We have 120k we can immediately use for the down payment and another 70k we could liquidate but don't want to right now. Jobs are very stable- hhi is 170k and reasonable to think it will be closer to 200k in the next 2-3 years. No student loans or other debt. One child with child care expenses of 1100 per month for 10 months of the year.

wow those taxes are high. must be in MD.

I would try to keep mortgage payments to ~25-30% of net pay AFTER maxing out retirement contributions. Work backwards from there.

[Anonymous]

Yes of course. I believe if you're putting down 20% and payments are less than 1/3 income, you're golden.