How did you afford your $1M plus home?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP again. We take home about 19k (after paying into healthcare costs which are high for our firm, 401k, etc). Nanny is 3500/month. Family help is about 2k/month now but that will go up in time. We've also had to bail out the parents from a foreclosure and pick up emergency health expenses so all of those things took a toll early on and ate up money we could have saved. Also, we weren't as disciplined about savings until the last few years (paid for our own modest wedding etc). Student loans from college are 1k/month. Hoping we find a house eventually that has room for an au pair so we can cut way down on childcare costs. For those who have incomes similar to ours, thanks so much for posting your budgets. We know we can cut down in some areas but there aren't huge areas of excess (lavish vacations, jewelry, fancy clothes, cars, etc).
I'd like to put together a larger downpayment (wait until we can save enough) rather than raising our monthly cost if possible. It just seems excessive to spend more than 4500/month. We realize our HHI income is high now so it worries me to take on even more monthly expense.

I think your situation demonstrates very nicely the hedonic treadmill and why people who earn lots of money still feel poor. Just think about how "rich" you would be if you discarded your attachment to the $1 mil house and bought a $500k house. You'd be rich! But since you've developed this concept that you have to have a $1 mil house, you're essentially going to be financially exactly the same as my family in terms of disposible income (we earn almost half what you do and are looking for a 500k house). I guess you could argue that you get 2x the pleasure out of your $1 mil house as I do out of my $500 k house. But I truly believe that we adjust to our circumstances in terms of happiness -- as long as your home is safe, clean, and comfortable, you won't really notice the difference.

By your logic then, shouldn't you be looking at a $250K house? Why do you think you should buy at the same price point as you when they make twice as much. This doesn't make any sense to me

You seem to be saying that everyone should live to the maximum extent of their means, and as we can see from the meltdowns of the last several years, many Americans agree with you.

What PP is saying is that past a certain price point, everything else is gravy - and that the gravy is a waste of money, especially if it cuts into your disposable income (and hence, quality of life).

I don't think that. It just seems they are lecturing someone else when they are putting themselves in the same position. Why doesn't that person buy a $250K home and adjust their happiness level so they can feel "rich"? Just a worthless argument to me.

NP. I actually had the same reaction: that would be a $250K home then for the PP.
But the reason that the PP is staying with the $500K might be, because you can hardly even get a studio for $250K in this city. Forget about house! The real estate is insane here.

[Anonymous]

Some of you are so stupid.

really

In this economy you want to UP your mortgage? We pay under $2K for ours, live in a home that's over 3000 sq. ft. and have over 1/2 acre where our kids can run around.

nuts

just nuts

[Anonymous]

Anonymous wrote:Some of you are so stupid.

really

In this economy you want to UP your mortgage? We pay under $2K for ours, live in a home that's over 3000 sq. ft. and have over 1/2 acre where our kids can run around.

nuts

just nuts

Where do you live?

[Anonymous]

Anonymous wrote:Some of you are so stupid.

really

In this economy you want to UP your mortgage? We pay under $2K for ours, live in a home that's over 3000 sq. ft. and have over 1/2 acre where our kids can run around.

nuts

just nuts

all signs point to a stronger economy in the future. if you choose to be ascetic, good for you. but, yes, some people see an opportunity to move up in the world.

[Anonymous]

Anonymous wrote:Sold first house for $485,000 and made $300,000

Sold second house for $722,000 and made $400,000

Bought current house for $1.2 million and put $700,000 down

Wow I want your house buying/selling karma!!

[Anonymous]

Anonymous wrote:Some of you are so stupid.

really

In this economy you want to UP your mortgage? We pay under $2K for ours, live in a home that's over 3000 sq. ft. and have over 1/2 acre where our kids can run around.

nuts

just nuts

How much time do you spend in your car on any given week? I think you're the one who's nuts.

[Anonymous]

Married 1999. Bought first home in DC 2004. $605k. We put down 20% of our own $ (no help, inheritance, etc).

Moved out of first home 3 years later to rent in new area/test it out. Renovated first property and rented it out.

Bought 2nd home or 1.06k in 2009. Put down 20% of our own savings again.

No outside help, no prior home sale.

We rent out first home which more than covers that mortgage.

We could have sold first and gotten a slightly bigger second home- but first home is such a great investment property we decided we will hang onto it forever.

[Anonymous]

Anonymous wrote:Married 1999. Bought first home in DC 2004. $605k. We put down 20% of our own $ (no help, inheritance, etc).

Moved out of first home 3 years later to rent in new area/test it out. Renovated first property and rented it out.

Bought 2nd home or 1.06k in 2009. Put down 20% of our own savings again.

No outside help, no prior home sale.

We rent out first home which more than covers that mortgage.

We could have sold first and gotten a slightly bigger second home- but first home is such a great investment property we decided we will hang onto it forever.

1.06 mill (not k)

[Anonymous]

Anonymous wrote:Married 1999. Bought first home in DC 2004. $605k. We put down 20% of our own $ (no help, inheritance, etc).

Moved out of first home 3 years later to rent in new area/test it out. Renovated first property and rented it out.

Bought 2nd home or 1.06k in 2009. Put down 20% of our own savings again.

No outside help, no prior home sale.

We rent out first home which more than covers that mortgage.

We could have sold first and gotten a slightly bigger second home- but first home is such a great investment property we decided we will hang onto it forever.

when you rent out a home you origianlly bought to live in, do you need to tell the bank? I would think if you told them, they would recalculate so that you are paying 1% more (investor rate) interst on your remaining balance, plus maybe they would require you to kick in extra money since investors typically need to put 25% down rather than 20% down. I'm thinking of buying a new house and thinking of renting out our current house, but I'd like to carry two mortgages to do it rather than pay off my original with mutual funds as I have a feeling the mutual funds are undervalued right now.