An we afford $1.5M home?
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Anonymous
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We make about $400K from both salaries.
We have close to $1.5M for retirement. Small amount for college. About $100K in cash. We have $600K in equity now. Plus a second vacation home with mortgage. Selling a third home and expect to net $800K. We had kids late and so while close to retirement we have young kids. |
Anonymous
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I mean, on those salaries I would say that level of home would be totally fine, even with the current interest rates. But your final sentence threw me. If you are retiring soon, then that becomes a different story. And you have three houses? In any event, I guess it sounds like your two home sales could essentially pay for the new house, so that puts you in a good position.
Bottom line -- if you are retiring in the few years, you should maybe re-think this, but if by "close to retirement" you meant like in your 50s (and you can have those salaries for another decade), then you are probably fine. |
Anonymous
| We are both 50. Would like to retire in 7 years. |
Anonymous
Do you plan to live in this 1.5M home with a mortgage in retirement? If so, I’m not sure you’ll have enough saved to do that unless you get a windfall. |
Anonymous
| Something doesn’t add up. How are you funding college? I’m assuming the kids won’t graduate in the next 7 years? How much of the equity in the two houses are you putting down in the new home? Is there a pension or something that will provide additional income? |
Anonymous
What do you think? Not a chance I would do it but each to their own. How do you plan to pay for college? |
Anonymous
Then, how are you paying for college and your lifestyle given your spending habits? |
Anonymous
If your plan is to retire in 7 years, you don’t have enough to retire. I’m sure you know that. Why are you even asking? Troll? |
Anonymous
| Don’t retire in 7 years |
Anonymous
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You can afford it, but maybe not to retire in 7 years.
I wouldn't do it. I'm 46 and looking to be debt free by 52 - no mortgages. This is very important to me. Also, by 52 my kids will be done with college, in college, and almost to college - we have 529s that I expect to cover most of that, although we've been paying private school so could afford it out of pocket too. I will retire at 54. You're in a slightly different place with young kids, but I would look to having no debt and money to launch the kids. |
Anonymous
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Third home? How many homes are there? How long have you made $400k a year. If long time, then you really don't have much to show for it. Houses are not always assets. They are false assets.
Your retirement is probably invested fairly conservatively and is also a false assets. You are doing lifestyle creep, but go for it. You can afford the new house even though not the best idea. Too much money stuck in real estate. |
Anonymous
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Do you know plan to put the 800k down on the 1.5M home? So your mortgage would be 700k?
What annual savings rate are you trying to achieve? Check to ensure you are saving enough for college for your children especially if you will be retiring when tuition bills will need to be paid. You’ll likely be responsible for the full COA wherever they go. Depends on your answers but maybe? |
Anonymous
| OP you really have to share your plan to fund college, because otherwise it’s impossible to tell you what you can afford. |
Anonymous
Not OP, but it may be inherited property. I’m in this situation. And if they just started making 400k in the last 5 years, they are doing well with retirement savings. OP, we don’t know how far you are from retirement or how old you are. Or where you plan to retire or how long you plan to keep the 1.5M home. Do you plan to pay it off or sell it before it’s paid off and move to a lower COL area when you retire? |
Anonymous
| I can’t imagine at 50 taking out a mortgage on a house you don’t need. I would want a lot higher income to buy in that price range |