Making 150k with mortgage of 550k?

[Anonymous]

DH and I are in the process of buying a house after renting a small TH for 9 years. We finally have 20% saved up and want a place with good neighborhood schools for elementary through high school with a reasonable commute. We finally found a home that we plan on living in for many years for 685k. Is it crazy to have such a big mortgage? We have no other debt and we both have very stable jobs with pension plans. I spent last night reading through some older posts on mortgage amount and incomes on DCUM and it seems like most people who have a like sized mortgage make a considerable amount more money.

[Anonymous]

No, that sounds like an ideal max

[Anonymous]

I don't think it's crazy at all.

[Anonymous]

Remember your income is likely to increase over time, but your mortgage is (hopefully) fixed.

[Anonymous]

I wouldn't do it, but if you have run the numbers and it still allows for retirement savings and other goals, go for it.

[Anonymous]

Would you be able to handle other unanticipated expenses which may come up like costly home repairs? If you and DH are planning to have kids, will you be able to afford childcare, which can be equivalent to rent or a mortgage in some areas? Just think about future expenses that may occur and if you can pay for them and your monthly house note. Owning a house is expensive beyond the mortgage.

[Anonymous]

I wouldn't do it. 150K is your gross, right? What would be your monthly mortgage + tax + insurance?

What are your other expenses? Would you be able to save some $ every month, including retirement and maybe college?

You may end up being house rich, cash poor.

Our HHI is about $155K gross, and our mortgage is $240K. Mortgage + tax + ins is probably around $2000/mo. We max out on 401K, so net take home is about $7800 or so.

We have 2 kids, no childcare expenses, no car payments, no other loans. Our monthly expenses can easily be around $7500/mo without living too frugally. That doesn't leave much wiggle room.

Luckily, I'm working PT, so the extra income goes to extra things like vacations. But before I went back to work PT, we were living pretty much paycheck to paycheck. The only reason we weren't stressed about it is because we have savings for at least 6mo of expenses.

[Anonymous]

Anonymous wrote:I wouldn't do it. 150K is your gross, right? What would be your monthly mortgage + tax + insurance?

What are your other expenses? Would you be able to save some $ every month, including retirement and maybe college?

You may end up being house rich, cash poor.

Our HHI is about $155K gross, and our mortgage is $240K. Mortgage + tax + ins is probably around $2000/mo. We max out on 401K, so net take home is about $7800 or so.

We have 2 kids, no childcare expenses, no car payments, no other loans. Our monthly expenses can easily be around $7500/mo without living too frugally. That doesn't leave much wiggle room.

Luckily, I'm working PT, so the extra income goes to extra things like vacations. But before I went back to work PT, we were living pretty much paycheck to paycheck. The only reason we weren't stressed about it is because we have savings for at least 6mo of expenses.

Do you live in the DC area? 550k doesn't really get your a "rich house" and 240K doesn't get you shit unless you bought in 1990

[Anonymous]

Make sure that you factor in other costs. Moving from a small townhouse or condo to a SFH can be a modest or big bump in other expenses.

Utilities - heating/cooling
Lawn care
Commute time if longer, need for 2 cars if no longer metro accessible
Age of the house and budget for repairs
Alarm system


If you have young kids and are banking on lower costs once you are out of the daycare years, be careful. Aftercare/before care and camps really add up. If you include all the other activities that older kids do -sports teams/classes along with after/before care and camp you don't end up saving much compared to daycare.

[Anonymous]

That sounds really uncomfortably high. We have an HHI of $180K and our mortgage is only $420K.

That said, we have kids and good childcare/preschool is expensive. I'm assuming you don't have kids, so if you can hold off on having kids until your income goes up, you should be safe. If you have kids, though, that would be really rough on your income.

[Anonymous]

We were in the same position when we bought our house. I'm not going to lie, the first year was rough (without kids). But our salaries increased over time and now it's an easy lift.

[Anonymous]

Anonymous wrote:That sounds really uncomfortably high. We have an HHI of $180K and our mortgage is only $420K.

That said, we have kids and good childcare/preschool is expensive. I'm assuming you don't have kids, so if you can hold off on having kids until your income goes up, you should be safe. If you have kids, though, that would be really rough on your income.

I should add, we bought in N Arl a couple of years ago. We saved about as long as you for DP and it is a small house, but in a good neighborhood/district.

[Anonymous]

OP here- Our kids are 5 and 7. The youngest is starting kindergarten, so no more daycare expenses. The house we are buying is close to where we rent. We rented here for the schools and our kids can stay in the same schools.

[Anonymous]

That really does sound uncomfortable. We make around 250k combined, but have a 380k mortgage. Including taxes, it's a fine monthly payment. But we have kids expenses, retirement savings, utilities etc. Further, we have to buy cars when they are old, we have to fix things in the house when they need to be fixed, we need to eventually pay for our kids to go to college. We wanted a mortgage that we could allow us to live comfortably.

We bought a house for around 550k. It was a few years ago, sure, but there are plenty of lovely homes in great neighborhoods with great schools that have homes in this range. You might want to look into those.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I wouldn't do it. 150K is your gross, right? What would be your monthly mortgage + tax + insurance?

What are your other expenses? Would you be able to save some $ every month, including retirement and maybe college?

You may end up being house rich, cash poor.

Our HHI is about $155K gross, and our mortgage is $240K. Mortgage + tax + ins is probably around $2000/mo. We max out on 401K, so net take home is about $7800 or so.

We have 2 kids, no childcare expenses, no car payments, no other loans. Our monthly expenses can easily be around $7500/mo without living too frugally. That doesn't leave much wiggle room.

Luckily, I'm working PT, so the extra income goes to extra things like vacations. But before I went back to work PT, we were living pretty much paycheck to paycheck. The only reason we weren't stressed about it is because we have savings for at least 6mo of expenses.

Do you live in the DC area? 550k doesn't really get your a "rich house" and 240K doesn't get you shit unless you bought in 1990

I live in west MoCo. We put a very large down payment on our house. Zillow currently values our house around $850K, and we bought a couple of years ago. Our house, including finished basement is 3400 sqft. I'm careful not to over extend ourselves. I feel like the last recession and housing bubble burst hasn't taught a lot of people much.