How would you handle buying a SFH in this situation?

[Anonymous]

Pondering buying a single family house. We currently own a town house. Early 30's, 2 kids, wife stays home. I make 250k in tech.

Current PITI/HOA is $2200 combined with a mid 2% rate.

Our assets:

Town house equity is roughly 230k.
450k in retirement accounts
45k in an HSA
390k in brokerage (not much in gains, most of this I recently put in from an inheritance, so minimal tax from selling)
25k in cash

We don't need to buy a bigger house right now but in 5 years I think we'll wish we did, when our kids are older. Given that tech is unstable with layoffs I'm hesitant to make a big purchase and wipe out our savings but I'm also afraid of being priced out of larger houses in the future if we wait. The houses we would aim for are around $1M.

[Anonymous]

We were similar and stretched to buy a SFH and it’s appreciated much more.

We are two income too which diversified the risk somewhat. But tech is very marketable.

Your kids will benefit from a SFH, people hate dealing with friends in townhouses because parking is always a pain. And of course more place to play and have activities.

Financially it’s very difficult to say. Honestly can your wife work? Adding $100k to your situation would help a lot.

[Anonymous]

Alternatively I would simply drive until you have an affordable price. With just one worker, you can take on a longer commute while DW manages the home front. This actually would be my strongest recommendation

[Anonymous]

No way I’d spend a million on that salary. Kids need college savings, activities, etc. they get. More expensive vs less. Sit tight.

[Anonymous]

Anonymous wrote:No way I’d spend a million on that salary. Kids need college savings, activities, etc. they get. More expensive vs less. Sit tight.

Yeah it's a lot if we didn't put much down, but I would do at least 50%, maybe 60% if we used our current equity. With a 400k mortgage, our housing payment would only rise by ~$1250 give or take, maybe 1500 if you factor in maintenance and utility use being higher.

We have plenty of room in our monthly budget as is, we live as if we made 150k not 250k. We just wouldn't save as much.

[Anonymous]

No way. You can’t afford to buy a bigger place.

[Anonymous]

You'll be fine. How much will your loan be/put down?

[Anonymous]

We don't need to buy a bigger house right now but in 5 years I think we'll wish we did, when our kids are older

Bigger? when the kids are bigger, taking up more space? I would stay put and get a storage unit for off-season clothes/sports equipment/lots of things. Ignore the cost of that, it's just getting you over the hump. The few years when there's too much stuff in the house. Do you like your schools, your neighborhood?

[Anonymous]

Anonymous wrote:

Anonymous wrote:No way I’d spend a million on that salary. Kids need college savings, activities, etc. they get. More expensive vs less. Sit tight.

Yeah it's a lot if we didn't put much down, but I would do at least 50%, maybe 60% if we used our current equity. With a 400k mortgage, our housing payment would only rise by ~$1250 give or take, maybe 1500 if you factor in maintenance and utility use being higher.

We have plenty of room in our monthly budget as is, we live as if we made 150k not 250k. We just wouldn't save as much.

That $230 doesn’t include moving expenses. Your taxes and utilities will go way up. We make slightly more than you and you have no college savings and doing well on retirement but most of your savings is inheritance. I wouldn’t do it. With tech you can get fired with no notice.

[Anonymous]

You don’t make enough and you don’t have enough. I’m surprised by how poor some people are.

[Anonymous]

I would never ask this kind of advice on this site. Responses are soooo conservative. You will just feel poor and you are not. They are literally telling you that you are poor, and you are not. We have lower hhi and bought slightly lower and are fine. We’ve been fine for many, many years.

[Anonymous]

We were in almost this exact situation when we bought our home 3 years ago. We were able to buy that million dollar home first with 10% down and the recast to a much smaller loan once we sold our townhouse (we put in $300K). Our PITI now is $4800/month with a $280K HHI and we are thrilled with two late ES-aged kids to have a much larger house and yard. Worth it.

*Our utilities increased but not by as much as we thought. Maybe this house is just better insulated?

[Anonymous]

Your income is too low for a $1m house, even if you dump all your equity into the down payment. Your wife needs to get back to work and you guys need to start saving aggressively for college.

[Anonymous]

I would wait and see if interest rates come down. Also I think it depends on the schools and whether you are happy with your current school district. We were able to afford a 3500K PITI on your salary but would not have gone much higher.

[Anonymous]

He$$ no. Your wife needs to get a job first. If you are laid off you are looking at 6 months minimum to get a new job with an 8K/month mortgage? Nope.