Would you take a $950k mortgage on 300k salary?

[Anonymous]

If you live in DC, yes, in normal times only. But now? Heck no. Things could get very very very bad here soon.

[Anonymous]

Wow these threads are from another planet for me. We are the opposite extreme I guess. 250hhi and we bought a 460k house in 2019 with a 15 year 4% mortgage. We are fine and on track but jeez not like we are swimming in extra cash. We do have three kids. No idea how people make those numbers work. I would be so stressed out. I doubt my marriage (or sanity) could survive that stress. We bought way further out (Anne arundel) for gs 9 schools but a very humble house. We do have friends that went the NW/rockville/bethesda route for close to this. They seemed to make it work but some weren’t thrilled with the public schools and couldn’t afford private options. At the end of the day it probably doesn’t matter too much as long as you guys are happy.

[Anonymous]

Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
My God $950k mortgage!! Can you find a cheaper house?


When you make over $300k a year this is not too much of a stretch. We bought our first house 16 years ago for $500k but times have changed.


I'm sorry it is. We are just addicted to debt in this country. Starting with a $950k mortgage should not be normalized.


Your claim is completely without context.

I'm sorry, but $1m isn't what it used to be.

Better to stretch for a house you want for a long time, than skimp, and have to move at least once, and pay all those transaction costs.


I would agree with this. If we had not bought our house a few years ago when interest rates were lower we would not be able to afford it now.

This is what should make you nervous.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I took a $400k mortgage on a $150k salary and I thought that was insane. Sorry OP you guys can't afford it.

My first mortgage was $450K on a $110K salary, around 2008. Interest rate around 5%. Never had any issues and never felt that finances were tight.

You cannot have a $450k mortgage on a $110k salary in Long Island NY because of property taxes..some of you I guess are assuming low property taxes?!

[Anonymous]

Wow these threads are from another planet for me. We are the opposite extreme I guess. 250hhi and we bought a 460k house in 2019 with a 15 year 4% mortgage. We are fine and on track but jeez not like we are swimming in extra cash. We do have three kids. No idea how people make those numbers work. I would be so stressed out. I doubt my marriage (or sanity) could survive that stress. We bought way further out (Anne arundel) for gs 9 schools but a very humble house. We do have friends that went the NW/rockville/bethesda route for close to this. They seemed to make it work but some weren’t thrilled with the public schools and couldn’t afford private options. At the end of the day it probably doesn’t matter too much as long as you guys are happy.

You did the right thing for you. We don't know how many kids the OP has. I would not take out a mortgage like that unless I could still max out my 401K, build up a Roth and still have enough for a life I would enjoy. Maybe the OP has very stable job situation that comes with a nice pension. Who knows? If the OP is retired military and in a secure job, that means a lot as far as steady income, health benefits, free college for kids, etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I took a $400k mortgage on a $150k salary and I thought that was insane. Sorry OP you guys can't afford it.

My first mortgage was $450K on a $110K salary, around 2008. Interest rate around 5%. Never had any issues and never felt that finances were tight.

You cannot have a $450k mortgage on a $110k salary in Long Island NY because of property taxes..some of you I guess are assuming low property taxes?!

This.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
My God $950k mortgage!! Can you find a cheaper house?


When you make over $300k a year this is not too much of a stretch. We bought our first house 16 years ago for $500k but times have changed.


I'm sorry it is. We are just addicted to debt in this country. Starting with a $950k mortgage should not be normalized.


Your claim is completely without context.

I'm sorry, but $1m isn't what it used to be.

Better to stretch for a house you want for a long time, than skimp, and have to move at least once, and pay all those transaction costs.


I would agree with this. If we had not bought our house a few years ago when interest rates were lower we would not be able to afford it now.

This is what should make you nervous.

Why should they be nervous? They have a permanently locked-in low rate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
My God $950k mortgage!! Can you find a cheaper house?


When you make over $300k a year this is not too much of a stretch. We bought our first house 16 years ago for $500k but times have changed.


I'm sorry it is. We are just addicted to debt in this country. Starting with a $950k mortgage should not be normalized.


Your claim is completely without context.

I'm sorry, but $1m isn't what it used to be.

Better to stretch for a house you want for a long time, than skimp, and have to move at least once, and pay all those transaction costs.


I would agree with this. If we had not bought our house a few years ago when interest rates were lower we would not be able to afford it now.

This is what should make you nervous.

Huh? It should make that happy they made the right decision.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
My God $950k mortgage!! Can you find a cheaper house?


When you make over $300k a year this is not too much of a stretch. We bought our first house 16 years ago for $500k but times have changed.


I'm sorry it is. We are just addicted to debt in this country. Starting with a $950k mortgage should not be normalized.


Your claim is completely without context.

I'm sorry, but $1m isn't what it used to be.

Better to stretch for a house you want for a long time, than skimp, and have to move at least once, and pay all those transaction costs.


I would agree with this. If we had not bought our house a few years ago when interest rates were lower we would not be able to afford it now.

This is what should make you nervous.

Why should they be nervous? They have a permanently locked-in low rate.

Because if they have to sell no one else like them can afford to buy it - and the price likely has to go down.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
My God $950k mortgage!! Can you find a cheaper house?


When you make over $300k a year this is not too much of a stretch. We bought our first house 16 years ago for $500k but times have changed.


I'm sorry it is. We are just addicted to debt in this country. Starting with a $950k mortgage should not be normalized.


Your claim is completely without context.

I'm sorry, but $1m isn't what it used to be.

Better to stretch for a house you want for a long time, than skimp, and have to move at least once, and pay all those transaction costs.


I would agree with this. If we had not bought our house a few years ago when interest rates were lower we would not be able to afford it now.

This is what should make you nervous.

Why should they be nervous? They have a permanently locked-in low rate.

Because if they have to sell no one else like them can afford to buy it - and the price likely has to go down.

That's not how real estate markets work. And we can see that right now as the markets continue to function without significant declines in value, despite higher rates.

[Anonymous]

OP we had two sets of friends recently purchase around this HHI / mortgage amount too. I think it’s working fine for them - they’re doing renos and buying expensive furniture so doesn’t feel like a cash strapped situation. They have family members with $ that can swoop in and “save them” in the event of job less etc and I think that went into their risk calcs too.

[Anonymous]

Anonymous wrote:Did OP say how old they were? And age of kids? Personally I would not want to be paying a mortgage in retirement and kids College years.

This is the OP. Thank you to all who’ve opined. We have two kids and no matter what I’ll be paying a mortgage while they’re in college. I had my first at 30, so I’ll only be 48 when he goes to school. We’ve been very aggressive in savings and a bit lucky so looking at a $915k mortgage. I don’t want to say our jobs but they truly are secure although I hear you that nothing is a guarantee. People have to be prudent and do what’s best for them to sleep at night but I have faith that this is right for us. FWIW, we have 7 figures in 401k and if that doubled twice by the time we hit 60, it feels like we’ll be ok. But there are no guarantees in life.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Did OP say how old they were? And age of kids? Personally I would not want to be paying a mortgage in retirement and kids College years.

This is the OP. Thank you to all who’ve opined. We have two kids and no matter what I’ll be paying a mortgage while they’re in college. I had my first at 30, so I’ll only be 48 when he goes to school. We’ve been very aggressive in savings and a bit lucky so looking at a $915k mortgage. I don’t want to say our jobs but they truly are secure although I hear you that nothing is a guarantee. People have to be prudent and do what’s best for them to sleep at night but I have faith that this is right for us. FWIW, we have 7 figures in 401k and if that doubled twice by the time we hit 60, it feels like we’ll be ok. But there are no guarantees in life.

Can you find a much cheaper house where you live? You don't need a huge/fancy house..it's just a shelter. As long as it's in a good district and safe that's all that matters.

[Anonymous]

Not in this economy

[Anonymous]

Anonymous wrote:
Anonymous wrote:
Anonymous wrote:

Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
My God $950k mortgage!! Can you find a cheaper house?


When you make over $300k a year this is not too much of a stretch. We bought our first house 16 years ago for $500k but times have changed.


I'm sorry it is. We are just addicted to debt in this country. Starting with a $950k mortgage should not be normalized.


Your claim is completely without context.

I'm sorry, but $1m isn't what it used to be.

Better to stretch for a house you want for a long time, than skimp, and have to move at least once, and pay all those transaction costs.


I would agree with this. If we had not bought our house a few years ago when interest rates were lower we would not be able to afford it now.


This is what should make you nervous.

Why should they be nervous? They have a permanently locked-in low rate.


Because if they have to sell no one else like them can afford to buy it - and the price likely has to go down.


That's not how real estate markets work. And we can see that right now as the markets continue to function without significant declines in value, despite higher rates.

Oh, tell us how they work please. Because it's not "working" for a whole lot of people. This situation is concerning. I remember the last time we had a lot of people who could not afford housing. The prices went down.