What $PITI should we aim for...
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Anonymous
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HHI 230k Tuition 2k / month Daycare 1500/ mo No other debt Typical expenses (car insurance, groceries, gas, etc) Will have 20% DP |
Anonymous
| $3500 |
Anonymous
Yikes. So that's looking like a 750k house with current interest rates. Slim pickings inside the beltway |
Anonymous
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230k
-40k pre tax retirement -6k health insurance? 184k taxable 22% tax 143k take home -24k tuition -18k tuition Cash flow: $8,400/mo I personally would not spend more than 1/3 of my take home on housing, so $2,805 PITI |
Anonymous
Well you are not high income. What do you expect? |
Anonymous
This one is really hard for strangers to answer, although there are a million calculators outline online. But nobody knows what your spending is like but you. The best and safest thing to do is to guess how much you can afford on top of your current rent/mortgage. Every month, put that aside in a bank account and see how it feels. Do you have enough left over? Do you have a lot left over? if so you can increase the amount you’re putting away. |
Anonymous
Ouch |
Anonymous
| agree with 3500. Unless your HHI is going to jump quite a bit in the near future, I'd stay at 25% of your take home pay. Those tuition bills are going to keep going up if you keep both in private (I assume that's what the tuition is), plus you'll need to keep saving for retirement and college. |
Anonymous
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Beware those online calculators. Even the ones where you can adjust your percent debt to income ratio to get the answer. I find that even conservative traditional estimates of debt-to-income are very aggressive for me.
For example, some banks will approve 42 or even 45%% of gross income in debt payments. Others will only go up to 35%. The old conventional wisdom for "frugal people" is 28%. So I went to the zillow mortgage affordability calculator, put in all relevant info and 28% and this thing told me I'm good with 12k PITI. My mortgage lender would have approved me for $18k!! Yeah, f*ck that. Maybe if I started driving a corolla, taking zero vacations, considering Applebees a "nice meal", then I guess 12k would be no problem |
Anonymous
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I wouldn't go higher than $3000.
For comparison, we are slightly higher HHI than you ($260k) and our PITI is $2200. We also have young kids (k, pk, and daycare) and save a decent amount (max 401ks, Roth's, $500/mo per kid to 529s) and after groceries, fixed expenses, activities, there's not a lot left! Do you have a lot of room to grow in salaries? If so maybe go a little higher but you don't want to be house poor. |
Anonymous
and this is 3500 not including escrow correct? HHI will only increase ~30-40k max with current careers Correct on private. Tuition will replace daycare for the baby next year. |
Anonymous
3500 includes escrow. PITI = principal, interest, taxes, insurance |
Anonymous
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We have a lower HHI ($205k) and have PITI of $4k. We've very comfortable with this. However:
-We're in DC and so have free full day PK-3. So childcare expenses go away much faster. -We do not own a car nor do we have any plans to buy one. -We're planning on public school - your $2k "tuition" - is that private school? |
Anonymous
Can only increase maybe 30-50k in the next 10 years. That is similar to what we currently pay. We don't do 529s because we cash flow daycare/ tuition now so plan on continuing that. Admittedly don't max out 401k, but do contribute to get the match. Hard to swallow staying in the house we have outgrown in order to put money away for 30+ years from now, but aware it's probably the smarter move |
Anonymous
+1. I think that's the ceiling. |