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

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My wife and I are expecting our first child as well as looking for our first home right now. Our HHI is $150K not including bonuses and we're looking at homes in the $650k-700k range with 10% down. Our monthly PITI would be about $3,500 according to our lender. We have no debt and have new-ish (2008 & 2010) cars that are paid off. The only future cost (besides those that come with home ownership) that we foresee is for daycare. Our potential mortgage will be about twice what we're currently paying in rent, but we're both relatively young (late 20s) and have a lot of future income growth, so don't mind being housepoor for now. Also, my brother will be living with us once we buy a house and will be paying about $500 a month, so that will help too.

I agree with the other posters; you are buying too much house for your income. You imply your wife works, which means you will have child care expenses - have you looked into this cost yet? You should expect to pay at least $1,000/month. Fast forward 2 years and now you are paying out $2,000/mo when your second is born. Are you saving enough for retirement? What about college savings? Do you plan to vacation?

We are looking at houses in all price ranges from $500k up to $675k. Ideally, we would buy something closer to $600k in one of our ideal neighborhoods in N. Arlington. We are only willing to spend on the high end of this range if we find our "forever" home. My wife and I both work and we do realize that child care expenses are in our future. Answering the PP questions above: we both put 10% into our 401Ks and max out our Roth IRA contributions as well and have 6 months salary in savings separate from what we have saved for our house. We'll most likely look into 529 plans for our child's college savings. Other than that, we have normal social lives and go out about once or twice a week. We're good with our money spend well within our means. We have vacationed extensively since college (international vacations almost every year) and since both of our parents have beach houses, that usually takes care of a week or two in the summers. We have family all over the country and plan on mostly road trip type family vacations when we have kids, much like the way we grew up. We realize that $650k-$700k is a stretch but we figure we're young and can stick it out for several years as we get more established in our careers.

The only way you can buy in N Arlington on that HHI and at the price range you are looking at is if you have a huge DP. Otherwise you won't just be housepoor, you will be flat broke and in debt up to your eyeballs. It's not just a stretch, it's a terrible, terrible idea.

You can spend well within your means now because you don't have a kid yet and your rent is half what you are contemplating for a mortgage payment.

Signed, PP who bought recently in N Arlington and makes $80K more than you a year but only has a $400K mortgage (high DP after saving for years).

[Anonymous]

280k HHI, 800k (initial) mortgage. Two kids in elementary school. Feeling very comfortable. No pressure at all.
I don't understand people whining about being house poor with 500k HHI and 600k mortgage.
It seems that it's a fashionable trend on DCUM to brag about their financial conservatism. I wonder how much of these brags are true.

[Anonymous]

Anonymous wrote:280k HHI, 800k (initial) mortgage. Two kids in elementary school. Feeling very comfortable. No pressure at all.
I don't understand people whining about being house poor with 500k HHI and 600k mortgage.
It seems that it's a fashionable trend on DCUM to brag about their financial conservatism. I wonder how much of these brags are true.

I agree with the above. We have about $270k HHI and mortgage of close to $700k. Really very affordable and plenty of cushion. Sure if one of us loses our jobs, it'll pinch but that's why we have lots of emergency savings. And frankly, any amount of mortgage will be painful if you suddenly lose your job. There's such a thing as acceptable levels of risk though. We save plenty for retirement, college and emergency funds. Beyond that, life is meant to be enjoyed. We're all gonna die someday....

[Anonymous]

700k house

[Anonymous]

Anonymous wrote:280k HHI, 800k (initial) mortgage. Two kids in elementary school. Feeling very comfortable. No pressure at all.
I don't understand people whining about being house poor with 500k HHI and 600k mortgage.
It seems that it's a fashionable trend on DCUM to brag about their financial conservatism. I wonder how much of these brags are true.

Mortgage lending has tightened up a lot since you got your 800K mortgage with a 280K HHI.

[Anonymous]

Anonymous wrote:

Anonymous wrote:280k HHI, 800k (initial) mortgage. Two kids in elementary school. Feeling very comfortable. No pressure at all.
I don't understand people whining about being house poor with 500k HHI and 600k mortgage.
It seems that it's a fashionable trend on DCUM to brag about their financial conservatism. I wonder how much of these brags are true.

Mortgage lending has tightened up a lot since you got your 800K mortgage with a 280K HHI.

Since when? I bought it last year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:280k HHI, 800k (initial) mortgage. Two kids in elementary school. Feeling very comfortable. No pressure at all.
I don't understand people whining about being house poor with 500k HHI and 600k mortgage.
It seems that it's a fashionable trend on DCUM to brag about their financial conservatism. I wonder how much of these brags are true.

Mortgage lending has tightened up a lot since you got your 800K mortgage with a 280K HHI.

We just got mortgage of 625k with existing loan of $370k on our not so amazing 200k hhi
so, rules are not that tight even now

[Anonymous]

Yeah - I was approved for a mortgage of a million dollars on a salary of $250K. That was the more strenuous approval involving credit check and review of w-2s, account statements, tax returns, etc. Bought house for much less than that but my loan officer was disappointed - they were hoping I'd borrow a lot more. So no, don't think lending standards have tightened all that much (unless your credit stinks I guess).

[Anonymous]

HHI of 200k. We save 10-15% for retirement. Our mortgage was for 600k. Our monthly payment is $3500 (PITI).

It was totally doable with one in daycare. We will be drawing down our non-retirement savings (~200 per month) for the next year when we have two in daycare. When the oldest starts K in fall 2015, we should be good to go.

Some things that make this work: I went from making 30k per year to 100+k per year recently, when I graduated from my PhD program. We made a conscious effort to choose where our money goes--we bought a close-in house to minimize commutes and get us into a good school district. We don't have a car payment. We only have one car and usually don't drive on weekdays. We don't have consumer debt. We don't have much in the way of student loans. And DH's parents are contributing to the 529s.

[Anonymous]

Exactly. Anyone working in the mortgage space now knows that this "credit is so tight" cry is just a crock of shit. The far left tail of the credit quality distribution can no longer get a mortgage because the private label MBS market imploded. These are really the only people that have been affected on the supply side of mortgage credit. Plenty of super risky borrowers have been and still are piling into FHA loans, which is why the FHA market share exploded post 2008 or so.

For people with 200k+ incomes and decent credit scores, many banks are falling over backwards trying to lend you money. Many of these loans - even those that could be sold to the GSEs - are being held on portfolio now as this is one of the few sources of yield. If anyone tells you that "credit is tight" for mortgages, they are completely full of shit.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:280k HHI, 800k (initial) mortgage. Two kids in elementary school. Feeling very comfortable. No pressure at all.
I don't understand people whining about being house poor with 500k HHI and 600k mortgage.
It seems that it's a fashionable trend on DCUM to brag about their financial conservatism. I wonder how much of these brags are true.

Mortgage lending has tightened up a lot since you got your 800K mortgage with a 280K HHI.

We just got mortgage of 625k with existing loan of $370k on our not so amazing 200k hhi
so, rules are not that tight even now

[Anonymous]

We are currently looking. We have a HHi of 360K. We have no debt and no kids. The lender told us we would qualify for 1.5 million, saying it was likely more than we would ever want to borrow. He is absolutely correct. We are limiting it to 900K, and we can easily afford that payment. It's nice to know we could stretch a little for the perfect house, though, especially in this market.

[Anonymous]

Anonymous wrote:280k HHI, 800k (initial) mortgage. Two kids in elementary school. Feeling very comfortable. No pressure at all.
I don't understand people whining about being house poor with 500k HHI and 600k mortgage.
It seems that it's a fashionable trend on DCUM to brag about their financial conservatism. I wonder how much of these brags are true.

Hey dummy, your kids are in elementary school.

Those of us who are still paying for childcare essentially have a second mortgage. My kid's monthly care is $2200. That's almost my mortgage. And when #2 is born this summer, that's going to go up.

Then again, we make almost your HHI and are probably much younger than you, so I'm sure we'll be more comfortable than you in a few years when DCs are in elementary school!

[Anonymous]

Anonymous wrote:We are currently looking. We have a HHi of 360K. We have no debt and no kids. The lender told us we would qualify for 1.5 million, saying it was likely more than we would ever want to borrow. He is absolutely correct. We are limiting it to 900K, and we can easily afford that payment. It's nice to know we could stretch a little for the perfect house, though, especially in this market.

What a boring life

[Anonymous]

Anonymous wrote:

Anonymous wrote:280k HHI, 800k (initial) mortgage. Two kids in elementary school. Feeling very comfortable. No pressure at all.
I don't understand people whining about being house poor with 500k HHI and 600k mortgage.
It seems that it's a fashionable trend on DCUM to brag about their financial conservatism. I wonder how much of these brags are true.

Hey dummy, your kids are in elementary school.

Those of us who are still paying for childcare essentially have a second mortgage. My kid's monthly care is $2200. That's almost my mortgage. And when #2 is born this summer, that's going to go up.

Then again, we make almost your HHI and are probably much younger than you, so I'm sure we'll be more comfortable than you in a few years when DCs are in elementary school!

Why do you need to be an asshole?
With a parent like you, your kids will more than likely grow up assholes too.
Who cares about how much a family of assholes earn?

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are currently looking. We have a HHi of 360K. We have no debt and no kids. The lender told us we would qualify for 1.5 million, saying it was likely more than we would ever want to borrow. He is absolutely correct. We are limiting it to 900K, and we can easily afford that payment. It's nice to know we could stretch a little for the perfect house, though, especially in this market.

What a boring life

How so?