$900k home with $180HHI if large downpayment?

[Anonymous]

We have $250k to put down. Looking at the numbers, it looks like we could afford a $900k home with that large of a downpayment. Even though yearly income is just $180. One elementary age child. No debts. We do need aftercare and summer camps. We don’t take expensive vacations. Does this sound right? Or does it sound like one of those things that works out on paper but will never work in real life?

[Anonymous]

You will be way overextended with those numbers. Have you also looked at insurance and taxes? There is no way you can afford this home, especially with current interest rates. Personally, I think a 750k home would be a stretch for you.

[Anonymous]

We did this at a 150k and 280k down. 4% fixed. We had no debt. No childcare with 3 kids. Both were in our early 30s and eventually DH salary increased and I returned to time work so it has become easier. With carefully planning we were still able to travel.

[Anonymous]

Too much for our comfort. We had a HHI of $180K when we bought two years ago. Did a $535K mortgage at 2.75% and our PITI is just under $3,000. That is our max that we are comfortable with and still able to save for retirement, college, etc. If we did more, we would be bleeding money and/or have to significantly cut down on something.

[Anonymous]

OP, with taxes and insurance, you’re looking at over a $5,000 per month mortgage payment. That’s a big payment on a salary of 180k. As I’m sure you know, houses break. The bigger the house, bigger the repair bill.

[Anonymous]

Anonymous wrote:OP, with taxes and insurance, you’re looking at over a $5,000 per month mortgage payment. That’s a big payment on a salary of 180k. As I’m sure you know, houses break. The bigger the house, bigger the repair bill.

This!

I found out the hard way!

[Anonymous]

If you were in NYC or in the San Francisco area my response would be different, but in the DMV one is able to stick to the rough guideline of 3X annual income for one's mortgage amount assuming at least a 20% (no PMI) down payment.

[Anonymous]

My spouse and I make 200k. Our monthly mortgage (including taxes and insurance) is a paltry $1400. Even with this low note, the money goes fast. Part of this is self-imposed due to maxing out IRAs, the rest is life- kids, groceries (getting more expensive every week), utilities, cars, car maintenance, house maintenance, kids college savings…etc.

If you’re disciplined enough to have saved 250k on a salary of 180k, I would say you might have a chance at making this happen. If you were gifted the money (nothing wrong with this), then you need to look at the numbers even more carefully. I say this not to be mean, but those who accumulate money in their own usually have a better handle on money.

[Anonymous]

This is OP. Thanks for your input. We are in Arlington, so the houses aren’t big, just absurdly expensive. The only reason we’re considering staying is because our child has special needs and is doing really well in her school. It feels worth extra money/a smaller house to not uproot her.

The fact that it’s a smaller house seems relevant to me because we’re still paying taxes on a $900k house but the repairs are on a 3 BR, 1800 sq foot house, not on a mansion at that price.

[Anonymous]

Anonymous wrote:We have $250k to put down. Looking at the numbers, it looks like we could afford a $900k home with that large of a downpayment. Even though yearly income is just $180. One elementary age child. No debts. We do need aftercare and summer camps. We don’t take expensive vacations. Does this sound right? Or does it sound like one of those things that works out on paper but will never work in real life?

do u do your own grass cutting, shrub cutting, mulching, house cleaning, some DIY, etc? Do you drive older cars that are paid off? Do you refrain from buying new clothes all the time? Do you clip coupons and buy things on sale? Then it might work.

[Anonymous]

This is OP. We have one car that is paid off, and this is money we saved but from a time when one of us had a much higher-paying job so I don’t feel like we get much credit for saving it! (Law firm lawyer turned non profit lawyer.) We clean our own house and don’t buy new clothes but don’t clip coupons. This was helpful. It sounds like there is a type of family who could make this work if it were the most important thing to them. That’s not was I was trying to do.

[Anonymous]

Anonymous wrote:This is OP. Thanks for your input. We are in Arlington, so the houses aren’t big, just absurdly expensive. The only reason we’re considering staying is because our child has special needs and is doing really well in her school. It feels worth extra money/a smaller house to not uproot her.

The fact that it’s a smaller house seems relevant to me because we’re still paying taxes on a $900k house but the repairs are on a 3 BR, 1800 sq foot house, not on a mansion at that price.

900k doesn’t go far in Arlington. Most of the market seems like it’s topped out and ready for a correction. I don’t know if this applies to Arlington? Also, mortgage rates are high, but it sounds like they could go higher. This is a tough call. Personally, I don’t think you make enough for a 650k mortgage, but only you truly know that.

[Anonymous]

Anonymous wrote:This is OP. Thanks for your input. We are in Arlington, so the houses aren’t big, just absurdly expensive. The only reason we’re considering staying is because our child has special needs and is doing really well in her school. It feels worth extra money/a smaller house to not uproot her.

The fact that it’s a smaller house seems relevant to me because we’re still paying taxes on a $900k house but the repairs are on a 3 BR, 1800 sq foot house, not on a mansion at that price.

But a lot of the homes in Arlington are old and need more repairs. Since moving in three years ago, we have had to pay to remove three trees, get a new HVAC system, and fix some of the sewer lines. I think right there that’s at least 25K.

In your shoes OP I’d just keep renting.

[Anonymous]

If a 900 k house works for your family needs, go for it. Then one of you find a new job or try get promotion etc. to live a better life you just need to work harder.

[Anonymous]

I would have a heart attack but maybe you have better savings than us. We bought a $700k house with $70,000 down 8 years ago and have a 3% mortgage. Our HHI at the time was $300k. Still in the same house with a 2% interest rate and HHI is now $550-600k.