Income $176k — how much would you spend on mortgage now?

[Anonymous]

OP, people on this board are VERY conservative about mortgage payments. Part of the answer will depend on what other savings you already have and how you are currently spending your income. If you're saving a ton each month towards a DP, then saving for a DP or paying a mortgage with it will be easy. If a higher mortgage will require lifestyle changes, you're better of with a lower mortgage. We have a PITI payment of $3,700 on a $130K pre-tax income. Three kids. Its been fine for us. BUT 1) While we're still saving for retirement, we don't NEED to save any more to be fine (we saved a lot early in our careers). 2) We super funded 529s when we were dual income. 3) We have a 6 month emergency fund. 4) we have separate savings that total 5% of the purchase price of our home. On top of this we save 1% of the purchase price each year for home repairs.

[Anonymous]

Anonymous wrote:OP, people on this board are VERY conservative about mortgage payments. Part of the answer will depend on what other savings you already have and how you are currently spending your income. If you're saving a ton each month towards a DP, then saving for a DP or paying a mortgage with it will be easy. If a higher mortgage will require lifestyle changes, you're better of with a lower mortgage. We have a PITI payment of $3,700 on a $130K pre-tax income. Three kids. Its been fine for us. BUT 1) While we're still saving for retirement, we don't NEED to save any more to be fine (we saved a lot early in our careers). 2) We super funded 529s when we were dual income. 3) We have a 6 month emergency fund. 4) we have separate savings that total 5% of the purchase price of our home. On top of this we save 1% of the purchase price each year for home repairs.

Whoa, your gross is 130k? So you spend like what, over 50% of your take home pay on your mortgage, and you have three kids?

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, people on this board are VERY conservative about mortgage payments. Part of the answer will depend on what other savings you already have and how you are currently spending your income. If you're saving a ton each month towards a DP, then saving for a DP or paying a mortgage with it will be easy. If a higher mortgage will require lifestyle changes, you're better of with a lower mortgage. We have a PITI payment of $3,700 on a $130K pre-tax income. Three kids. Its been fine for us. BUT 1) While we're still saving for retirement, we don't NEED to save any more to be fine (we saved a lot early in our careers). 2) We super funded 529s when we were dual income. 3) We have a 6 month emergency fund. 4) we have separate savings that total 5% of the purchase price of our home. On top of this we save 1% of the purchase price each year for home repairs.

Whoa, your gross is 130k? So you spend like what, over 50% of your take home pay on your mortgage, and you have three kids?

Yeah, that’s terrifying IMO.

[Anonymous]

Also OP, how old are you?

[Anonymous]

OP, it's a range and depends on a few factors. If you are buying in a highly desirable area, I'd be willing to go as high as 3300-3400, especially if you are in a career position where you expect your income to go up 10-20k in the next few years. It will be tight, but if you are buying in, say, a close in neighborhood with good schools where houses do not depreciate (this describes a number of neighborhoods in and around DC), it's worth the stretch initially because long run you are looking at more equity. Plus with only one kid, that simplifies your other savings (you need retirement plus one 529 plus emergency fund, which is doable and I'm assuming you have a good start on all of it). So you tone down vacations and don't eat out a few years. Worth it.

On the other hand, if you are buying somewhere with less certainty about future value and appreciation, I'd want to keep it much lower, closer to 2700. This leaves you much more room for savings, including a fund for a future trade-up house purchase.

You have to think both in terms of what you can afford (which is highly personal and dependent on your other debt load, your spending habits, and your willingness to reign those habits in to afford the house you want) AND what your potential ROI is. What you don't want to do is lock yourself into a payment at the top of your affordability range only to see a bubble pop and your house lose 20% of its value overnight. So don't stretch for the bigger mortgage on some huge far-out development of brand new cookie cutter homes, or a huge brownstone in downtown Baltimore. But a cute 3/2 in Kensington on a good street? Go for it. It will pay off. Your income catches up and your house keeps appreciating.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, people on this board are VERY conservative about mortgage payments. Part of the answer will depend on what other savings you already have and how you are currently spending your income. If you're saving a ton each month towards a DP, then saving for a DP or paying a mortgage with it will be easy. If a higher mortgage will require lifestyle changes, you're better of with a lower mortgage. We have a PITI payment of $3,700 on a $130K pre-tax income. Three kids. Its been fine for us. BUT 1) While we're still saving for retirement, we don't NEED to save any more to be fine (we saved a lot early in our careers). 2) We super funded 529s when we were dual income. 3) We have a 6 month emergency fund. 4) we have separate savings that total 5% of the purchase price of our home. On top of this we save 1% of the purchase price each year for home repairs.

Whoa, your gross is 130k? So you spend like what, over 50% of your take home pay on your mortgage, and you have three kids?

+1. I’m trying to think about how this would work, given that I pay $2500 for PITI at the same income. I take home just about $6k/month.

Props to you if you can do this, but I literally can’t figure out how it is comfortable or even possible, even with zero child care costs.

[Anonymous]

No more than 3k piti.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, people on this board are VERY conservative about mortgage payments. Part of the answer will depend on what other savings you already have and how you are currently spending your income. If you're saving a ton each month towards a DP, then saving for a DP or paying a mortgage with it will be easy. If a higher mortgage will require lifestyle changes, you're better of with a lower mortgage. We have a PITI payment of $3,700 on a $130K pre-tax income. Three kids. Its been fine for us. BUT 1) While we're still saving for retirement, we don't NEED to save any more to be fine (we saved a lot early in our careers). 2) We super funded 529s when we were dual income. 3) We have a 6 month emergency fund. 4) we have separate savings that total 5% of the purchase price of our home. On top of this we save 1% of the purchase price each year for home repairs.

Whoa, your gross is 130k? So you spend like what, over 50% of your take home pay on your mortgage, and you have three kids?

Yeah, that’s terrifying IMO.

No, that’s beyond stupid.

[Anonymous]

$3k a month should be manageable but plan to refinance if/when rates come down. If you have a super stable job with union protection or such then you could go a bit higher.

[Anonymous]

Anonymous wrote:OP, people on this board are VERY conservative about mortgage payments. Part of the answer will depend on what other savings you already have and how you are currently spending your income. If you're saving a ton each month towards a DP, then saving for a DP or paying a mortgage with it will be easy. If a higher mortgage will require lifestyle changes, you're better of with a lower mortgage. We have a PITI payment of $3,700 on a $130K pre-tax income. Three kids. Its been fine for us. BUT 1) While we're still saving for retirement, we don't NEED to save any more to be fine (we saved a lot early in our careers). 2) We super funded 529s when we were dual income. 3) We have a 6 month emergency fund. 4) we have separate savings that total 5% of the purchase price of our home. On top of this we save 1% of the purchase price each year for home repairs.

Post your monthly budget or it didn't happen.

[Anonymous]

Anonymous wrote:OP, people on this board are VERY conservative about mortgage payments. Part of the answer will depend on what other savings you already have and how you are currently spending your income. If you're saving a ton each month towards a DP, then saving for a DP or paying a mortgage with it will be easy. If a higher mortgage will require lifestyle changes, you're better of with a lower mortgage. We have a PITI payment of $3,700 on a $130K pre-tax income. Three kids. Its been fine for us. BUT 1) While we're still saving for retirement, we don't NEED to save any more to be fine (we saved a lot early in our careers). 2) We super funded 529s when we were dual income. 3) We have a 6 month emergency fund. 4) we have separate savings that total 5% of the purchase price of our home. On top of this we save 1% of the purchase price each year for home repairs.

I'm not a math genius but I don't understand how these numbers add up. Do you have a lot of help from family or something? How are you doing this with three kids?

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, people on this board are VERY conservative about mortgage payments. Part of the answer will depend on what other savings you already have and how you are currently spending your income. If you're saving a ton each month towards a DP, then saving for a DP or paying a mortgage with it will be easy. If a higher mortgage will require lifestyle changes, you're better of with a lower mortgage. We have a PITI payment of $3,700 on a $130K pre-tax income. Three kids. Its been fine for us. BUT 1) While we're still saving for retirement, we don't NEED to save any more to be fine (we saved a lot early in our careers). 2) We super funded 529s when we were dual income. 3) We have a 6 month emergency fund. 4) we have separate savings that total 5% of the purchase price of our home. On top of this we save 1% of the purchase price each year for home repairs.

I'm not a math genius but I don't understand how these numbers add up. Do you have a lot of help from family or something? How are you doing this with three kids?

It sounds like one parent is at home and they saved a ton before kids, when both were working. Without childcare costs, and given early savings, this would be ok, especially if you had a spouse who could re enter the workforce if necessary. I wouldn’t do it without a good bit of insurance, though.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, people on this board are VERY conservative about mortgage payments. Part of the answer will depend on what other savings you already have and how you are currently spending your income. If you're saving a ton each month towards a DP, then saving for a DP or paying a mortgage with it will be easy. If a higher mortgage will require lifestyle changes, you're better of with a lower mortgage. We have a PITI payment of $3,700 on a $130K pre-tax income. Three kids. Its been fine for us. BUT 1) While we're still saving for retirement, we don't NEED to save any more to be fine (we saved a lot early in our careers). 2) We super funded 529s when we were dual income. 3) We have a 6 month emergency fund. 4) we have separate savings that total 5% of the purchase price of our home. On top of this we save 1% of the purchase price each year for home repairs.

Whoa, your gross is 130k? So you spend like what, over 50% of your take home pay on your mortgage, and you have three kids?

+1. I’m trying to think about how this would work, given that I pay $2500 for PITI at the same income. I take home just about $6k/month.

Props to you if you can do this, but I literally can’t figure out how it is comfortable or even possible, even with zero child care costs.

No retirement deferrals, no premiums on the employer-sponsored health plan, no cars, very low utility bills, and generous SmarTrip benefits from work is the only way this could possibly work for the PP. Either that or she's making more than she's letting on. Or committing egregious tax fraud.

Also, PP, you definitely need to be saving more for retirement. Unless you bought a load TSLA in your Roth IRA at $5/share. In which case, bully for you, but you are an edge case.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, people on this board are VERY conservative about mortgage payments. Part of the answer will depend on what other savings you already have and how you are currently spending your income. If you're saving a ton each month towards a DP, then saving for a DP or paying a mortgage with it will be easy. If a higher mortgage will require lifestyle changes, you're better of with a lower mortgage. We have a PITI payment of $3,700 on a $130K pre-tax income. Three kids. Its been fine for us. BUT 1) While we're still saving for retirement, we don't NEED to save any more to be fine (we saved a lot early in our careers). 2) We super funded 529s when we were dual income. 3) We have a 6 month emergency fund. 4) we have separate savings that total 5% of the purchase price of our home. On top of this we save 1% of the purchase price each year for home repairs.

I'm not a math genius but I don't understand how these numbers add up. Do you have a lot of help from family or something? How are you doing this with three kids?

I have found that every person has a very different view of what is comfortable. I would be freaking out with the situation above but I am conservative and like to take vacations. I am also retiring before 50. Others, may have different values. Additionally, it can all go to he)) very quickly if the market is like it is now - lose 50% of the value and most people don't feel so okay.

[Anonymous]

We have the same HHI and our payment is $2300 and we're comfortable. I don't think we'd go up past $2800.

Early 30s, two kids under 3yo FWIW