How much mortgage can we afford?
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Anonymous
I don't get your math - $2800 rent + $300 utilities + $722 car = $3822 a month. You spend $188 a month on food for four, gas, cell phone, clothes, toys for your kids, internet, tv, toiletries, etc.? |
Anonymous
You don't eat? |
Anonymous
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Don’t go deeper into that debt hole op. Dig yourselves out. It’s really stressful on a marriage to be so stretched…
1. Trade down your car 2. Move to a larger condo in north Rockville for max 500k or an exurb with good schools 3. Go work for the fed and get started in pslf in ten years |
Anonymous
Why does everyone complicate this so much? There is a tried and tested 28/36 guideline on home affordability. Let’s just apply that…. Baseline PITI = 28% x (HHI/12) = $7K With a 30 year mortgage at 7.25%, this works out to be a roughly $870K maximum mortgage, assuming $1000 per month for HOA, insurance, and property taxes. Unfortunately, you have student loan debt and this must be subtracted from your mortgage allocation: $870K - $250K = $620K Therefore, the largest mortgage you can afford to take is 30 year $620K @ 7.25%. Assuming you put 20% down, the maximum house you can afford is $620K / 80% = $775K with a $155K down payment. This will stick you with a monthly PITI of just over $5K, leaving you with maybe $10K net per month to cover your car, student loans, and other expenses. |
Anonymous
Net worth including house worth?? |
Anonymous
I think this is probably a decent estimate. Once OP and her husband make more money in a few years and the baby goes to kinder, they can buy a nicer house. |
Anonymous
. If you haven’t used your DH’s income to pay down your debt or just save, you are relying on it. I suggest that you take half of the post tax proceeds on DH’s commission and use it to pay down the debt fast - use the other half to save for college/more retirement. If you had been doing this for the past 5 years you would be more than halfway there and in a much better place to buy a house. If you get any bonuses do the same. Plus, pay off some with your $300k budget. So, hunker down where you are and start getting that debt down. You need to get a handle on your spending. So, get Quicken or ‘You Need a Budget’ or David Ramsey or whatever and input your spending for the past year. Your above expenses total $5,317 but you haven’t included food, fun, clothing, vacation ….. You should be able to do quite well on a spending budget of $8k a month post tax. Continue with your retirement deposits of $30k a year (although with a minimum income of $400k they should be much higher). Then report back in a year and tell us how you did. |
Anonymous
| You are bankrupt and want to take more debt? |
Anonymous
Then I personally would aim to spend that much on a mortgage every month if you buy a house. I personally wouldn’t spend more. |
Anonymous
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This is me if helpful and one of the ones who said I recently started using YNAB:
https://www.dcurbanmom.com/jforum/posts/list/1128137.page We bought our house in 2013 for $615K because we prefer not being house poor. I like to do other things like travel. I really like the YNAB way - what are your priorities? Whatever they are - focus your money on those things. Watch how you’re spending your money and only spend on things you like instead of wasting on things you don’t like. |
Anonymous
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Op, I posted earlier and hope you are still reading. A lot of these people don't realize that if you can find a mortgage that is equal to or less than your rent, then you are basically paying yourself every month. Costs will continue to rise and with 100k down payment and your DHs being a realtor, you should be able to find a deal. I am thrilled you are close to the end of the car payment, which can funnel intp 401k or a 529 when it is done.
Make a 5 year plan and stick to it. My dh and I were the PhDs upthread and we paid off all our debt except for our student loans and mortgage. Take it one step at a time and don't beat yourself up. You have done the best you could with the resources at hand. |
Anonymous
| I think given OPs responses this is a lost cause. She sounds financially illiterate and had an underemployed husband to boot. She took out outrageous loans and cannot event articulate her current expenses. Just another periods who will be crying about boomers next year and how UnFaIr oUr CaPitALiSt economy is. |
Anonymous
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agree with PP to consider a fed job. yes, less salary but you won't be spending $900/month on health insurance. and with PSLF in 10 years that student debt will be gone.
Why are you spending $200 a month on phones? Tracfone is $25/month for unlimited call/text and 3 gb data which rolls over. I was so happy I got rid of AT&T - no difference in quality and I save a ton. |
Anonymous
No, once that happens they start saving for retirement, funding 529s, put $ into savings, and finance a few kids activities like swim lessons. And they can put more money towards loans. And they will need to finance home repairs, buy furniture for their house, etc. Live within your means, save, wait 15 years and then figure out what you want. |
Anonymous
I think it depends on your earning potential and how quickly you plan to payoff cars and student loans. |