Question about CC/Bethesda real estate

[Anonymous]

I don’t understand the following and would love insight. I’m a divorced mom of two “stuck” in a house in a school district where I’ve had less than good experiences. I’ve been looking at Kensington (closer to Connecticut), CC, Bethesda for years. From everything I read on here, it seems like my annual income is in alignment with much of the socio-economic demographic who lives in those areas. However, there is no way I could buy a $1.5M house and stay within an affordable monthly mortgage since even an $800K house would be well above $5K/month. Besides people’s parents giving them a down payment, how are others making this work? I pay for everything for the kids so please be kind as I am also trying to reduce my commute now that I have to come to the office more.

Current annual comp: $650K
Monthly gross income: $18-20K
28/36 rule: $5Kish / month mortgage
Current home value: $590K
Remaining mortgage: $470K
Current monthly mortgage: $2800

[Anonymous]

Anonymous wrote:I don’t understand the following and would love insight. I’m a divorced mom of two “stuck” in a house in a school district where I’ve had less than good experiences. I’ve been looking at Kensington (closer to Connecticut), CC, Bethesda for years. From everything I read on here, it seems like my annual income is in alignment with much of the socio-economic demographic who lives in those areas. However, there is no way I could buy a $1.5M house and stay within an affordable monthly mortgage since even an $800K house would be well above $5K/month. Besides people’s parents giving them a down payment, how are others making this work? I pay for everything for the kids so please be kind as I am also trying to reduce my commute now that I have to come to the office more.

Current annual comp: $650K
Monthly gross income: $18-20K
28/36 rule: $5Kish / month mortgage
Current home value: $590K
Remaining mortgage: $470K
Current monthly mortgage: $2800

How is your “gross” monthly comp 20k if you make 650k a year? Even net should be like 30k/month. If so, you can afford more than you think. The 28/36 rule is also about gross, not net comp.

[Anonymous]

What do you do that you earn $650k? That’s goals.

To answer your question, many of us got in before things got crazy expensive.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don’t understand the following and would love insight. I’m a divorced mom of two “stuck” in a house in a school district where I’ve had less than good experiences. I’ve been looking at Kensington (closer to Connecticut), CC, Bethesda for years. From everything I read on here, it seems like my annual income is in alignment with much of the socio-economic demographic who lives in those areas. However, there is no way I could buy a $1.5M house and stay within an affordable monthly mortgage since even an $800K house would be well above $5K/month. Besides people’s parents giving them a down payment, how are others making this work? I pay for everything for the kids so please be kind as I am also trying to reduce my commute now that I have to come to the office more.

Current annual comp: $650K
Monthly gross income: $18-20K
28/36 rule: $5Kish / month mortgage
Current home value: $590K
Remaining mortgage: $470K
Current monthly mortgage: $2800

How is your “gross” monthly comp 20k if you make 650k a year? Even net should be like 30k/month. If so, you can afford more than you think. The 28/36 rule is also about gross, not net comp.

In a word, taxes. I’m a partner (lawyer) so I write very big checks to the government quarterly. $20K is the absolute max I can make if I am not maxing out 401(k), which I’d prefer to do as compared to putting that towards a mortgage.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don’t understand the following and would love insight. I’m a divorced mom of two “stuck” in a house in a school district where I’ve had less than good experiences. I’ve been looking at Kensington (closer to Connecticut), CC, Bethesda for years. From everything I read on here, it seems like my annual income is in alignment with much of the socio-economic demographic who lives in those areas. However, there is no way I could buy a $1.5M house and stay within an affordable monthly mortgage since even an $800K house would be well above $5K/month. Besides people’s parents giving them a down payment, how are others making this work? I pay for everything for the kids so please be kind as I am also trying to reduce my commute now that I have to come to the office more.

Current annual comp: $650K
Monthly gross income: $18-20K
28/36 rule: $5Kish / month mortgage
Current home value: $590K
Remaining mortgage: $470K
Current monthly mortgage: $2800

How is your “gross” monthly comp 20k if you make 650k a year? Even net should be like 30k/month. If so, you can afford more than you think. The 28/36 rule is also about gross, not net comp.

In a word, taxes. I’m a partner (lawyer) so I write very big checks to the government quarterly. $20K is the absolute max I can make if I am not maxing out 401(k), which I’d prefer to do as compared to putting that towards a mortgage.

How are your taxes that high? Can you please explain for us non legal folk

[Anonymous]

Anonymous wrote:I don’t understand the following and would love insight. I’m a divorced mom of two “stuck” in a house in a school district where I’ve had less than good experiences. I’ve been looking at Kensington (closer to Connecticut), CC, Bethesda for years. From everything I read on here, it seems like my annual income is in alignment with much of the socio-economic demographic who lives in those areas. However, there is no way I could buy a $1.5M house and stay within an affordable monthly mortgage since even an $800K house would be well above $5K/month. Besides people’s parents giving them a down payment, how are others making this work? I pay for everything for the kids so please be kind as I am also trying to reduce my commute now that I have to come to the office more.

Current annual comp: $650K
Monthly gross income: $18-20K
28/36 rule: $5Kish / month mortgage
Current home value: $590K
Remaining mortgage: $470K
Current monthly mortgage: $2800

I get your puzzlement OP. We have a slightly higher HHI, good savings, and yet owning a 2M+ home like all our neighbors seems way too financially difficult.

[Anonymous]

It doesn't make sense that your gross monthly is $18-$20K. Do you mean that is your net monthly after taxes and maxing your retirement?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don’t understand the following and would love insight. I’m a divorced mom of two “stuck” in a house in a school district where I’ve had less than good experiences. I’ve been looking at Kensington (closer to Connecticut), CC, Bethesda for years. From everything I read on here, it seems like my annual income is in alignment with much of the socio-economic demographic who lives in those areas. However, there is no way I could buy a $1.5M house and stay within an affordable monthly mortgage since even an $800K house would be well above $5K/month. Besides people’s parents giving them a down payment, how are others making this work? I pay for everything for the kids so please be kind as I am also trying to reduce my commute now that I have to come to the office more.

Current annual comp: $650K
Monthly gross income: $18-20K
28/36 rule: $5Kish / month mortgage
Current home value: $590K
Remaining mortgage: $470K
Current monthly mortgage: $2800

How is your “gross” monthly comp 20k if you make 650k a year? Even net should be like 30k/month. If so, you can afford more than you think. The 28/36 rule is also about gross, not net comp.

In a word, taxes. I’m a partner (lawyer) so I write very big checks to the government quarterly. $20K is the absolute max I can make if I am not maxing out 401(k), which I’d prefer to do as compared to putting that towards a mortgage.

Ok but isn’t at least 50% of your comp paid out other than monthly? Are you saying you can’t afford the house you want if you ignore 50% of your income?

[Anonymous]

Your Comp does not match your gross income. That's our gross, we're at @$400K

[Anonymous]

OP here. Hope this will clarify. As a self-employed person, my cash flow works differently than an employee. I get quarterly distributions, which are used to in its entirety to pay federal taxes, and I also lay a lot of state taxes due to individual and partnership circumstances. It’s apples to oranges to some extent, but the $18-20K is my gross monthly distribution before retirement contributions, 529, healthcare premiums), etc. Keep in mind there’s no match. That is why I used that number. Hopefully that helps.

In any event, a $10K mortgage on $20K still seems untenable?

[Anonymous]

Anonymous wrote:OP here. Hope this will clarify. As a self-employed person, my cash flow works differently than an employee. I get quarterly distributions, which are used to in its entirety to pay federal taxes, and I also lay a lot of state taxes due to individual and partnership circumstances. It’s apples to oranges to some extent, but the $18-20K is my gross monthly distribution before retirement contributions, 529, healthcare premiums), etc. Keep in mind there’s no match. That is why I used that number. Hopefully that helps.

In any event, a $10K mortgage on $20K still seems untenable?

So you don’t make $650k..

There is no way you are paying 60% + in effective taxes, even in a multi state partnership.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. Hope this will clarify. As a self-employed person, my cash flow works differently than an employee. I get quarterly distributions, which are used to in its entirety to pay federal taxes, and I also lay a lot of state taxes due to individual and partnership circumstances. It’s apples to oranges to some extent, but the $18-20K is my gross monthly distribution before retirement contributions, 529, healthcare premiums), etc. Keep in mind there’s no match. That is why I used that number. Hopefully that helps.

In any event, a $10K mortgage on $20K still seems untenable?

So you don’t make $650k..

There is no way you are paying 60% + in effective taxes, even in a multi state partnership.

Sigh. I have no incentive to lie. I’m just a tired single mom not understanding real estate in this area. I’d welcome feedback on the question though, which said in another way are people paying $10K+/month for mortgages to live in Bethesda/CC/Kensington? Or is it that I actually don’t make enough to live in those areas comparatively?

[Anonymous]

Could you consider an 2.5 bed apartment instead? There are availabilities for more around 5k/month, which would be more doable with a 20k/month. Agree that 10k mortgage of 20k net is untenable. Our HHI is similar, and I’m having a hard time feeling more comfortable than 1.5M. That being said, there’s some homes in WJ district that look possible closer to 1.2, and could be closer to metro to work, if you’re on the red line.

[Anonymous]

People bought before prices and rates went way up, so more than 1-2yrs ago. That’s it. Your income is good enough for it. You probably save a fair amount based on your current mortgage. You would be saving a few less thousand per month

[Anonymous]

If you make that much you should have saved a big down payment. Most are not financing the full cost. We live in CC and carry ~$500K in mortgage which is about $4K a month in PITI for our house (our property taxes are ~17K a year). The rest we put down in cash