Another how much PITI can we afford post

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have similar stats as u with higher income $300k, more in our 3 kids 529s and retirement. Our PITI is $2500 and I can’t imagine doing more than that. We’re in PG county and our house is worth $600k (a little over $200k that what we purchase for). I have a 40 min metro commute to my DC office that I rarely go to.

Our kids go to private school, albeit more affordable Christian school, and do extracurriculars and we vacation every year.

Why would you spend that much when u can get what u need with less? Maybe expand the area where you’re looking?

Editing to add that we do have SFH with a nice sized yard and pretty much walking distance to school and metro and everything else we need.

How is the commute to Alexandria from PG though? That's where DH works

Less than an hour from mid-north PG, less if coming from south PG. I know this bc we have friends in Alexandria. You should drive it and check it out. Look into neighborhoods closer to the DC border, e.g., college park and south of that.

Thanks... I don't think a Christian school works for my family though.

Also, if we have to pay for private for two kids, what's the difference vs just paying probably the same or less for a mortgage in a place with good public schools (ie 20k a year for tuition vs 20k a year for mortgage that becomes an asset in terms of equity)? I guess I'm not sure that's necessarily putting us on better financial ground?

Oh, u don’t have to put your kids in private school, we’ve just always planned to wherever we lived. My point was we could afford to bc our PITI is low. None of our neighborhood friends (most with the same stats as us) have their kids in private school.

But also consider whether you can guarantee that your public schools is the best fit for your children. That’s not always the case, and it’s always good to have extra funds for either private school or to pay for other resources and services that ur kids might end up needing.

OP here. I know.... I'm hesitant on the PG side though. I work with a lot of folks who live in PG, but generally they favored privates only and some have even hated the privates so switched schools a lot (I know this varies a lot by district)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have similar stats as u with higher income $300k, more in our 3 kids 529s and retirement. Our PITI is $2500 and I can’t imagine doing more than that. We’re in PG county and our house is worth $600k (a little over $200k that what we purchase for). I have a 40 min metro commute to my DC office that I rarely go to.

Our kids go to private school, albeit more affordable Christian school, and do extracurriculars and we vacation every year.

Why would you spend that much when u can get what u need with less? Maybe expand the area where you’re looking?

Editing to add that we do have SFH with a nice sized yard and pretty much walking distance to school and metro and everything else we need.

How is the commute to Alexandria from PG though? That's where DH works

Less than an hour from mid-north PG, less if coming from south PG. I know this bc we have friends in Alexandria. You should drive it and check it out. Look into neighborhoods closer to the DC border, e.g., college park and south of that.

Thanks... I don't think a Christian school works for my family though.

Also, if we have to pay for private for two kids, what's the difference vs just paying probably the same or less for a mortgage in a place with good public schools (ie 20k a year for tuition vs 20k a year for mortgage that becomes an asset in terms of equity)? I guess I'm not sure that's necessarily putting us on better financial ground?

Oh, u don’t have to put your kids in private school, we’ve just always planned to wherever we lived. My point was we could afford to bc our PITI is low. None of our neighborhood friends (most with the same stats as us) have their kids in private school.

But also consider whether you can guarantee that your public schools is the best fit for your children. That’s not always the case, and it’s always good to have extra funds for either private school or to pay for other resources and services that ur kids might end up needing.

OP here. I know.... I'm hesitant on the PG side though. I work with a lot of folks who live in PG, but generally they favored privates only and some have even hated the privates so switched schools a lot (I know this varies a lot by district)

Fair point and it does vary by where in PG u r. It’s a big county!

I think the main thing to take away at least from my example is that keeping ur PITI low allows u to have discretionary funds for whatever life throws at u, whether the loss of a job, or special needs u or ur kids might need, etc. I would be constantly stressed if I had a 4000 PITI!

So at minimum, u should look outside ur comfort zone (of real estate), drive around, check out schools, backup schools, etc. We did all that and are very happy where we are (we were coming from DC). We live a very comfortable life, even with 3 kids!

Good luck!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have similar stats as u with higher income $300k, more in our 3 kids 529s and retirement. Our PITI is $2500 and I can’t imagine doing more than that. We’re in PG county and our house is worth $600k (a little over $200k that what we purchase for). I have a 40 min metro commute to my DC office that I rarely go to.

Our kids go to private school, albeit more affordable Christian school, and do extracurriculars and we vacation every year.

Why would you spend that much when u can get what u need with less? Maybe expand the area where you’re looking?

Editing to add that we do have SFH with a nice sized yard and pretty much walking distance to school and metro and everything else we need.

How is the commute to Alexandria from PG though? That's where DH works

I think you can afford it. What about Fairfax or Burke? There's houses in the 700-800 range there and lots of land with them--1970s suburban style houses generally but with larger plots and older trees than average. I know someone who just bought a SFH there for under 800k.

Thanks! That's actually an area we're looking, but seeing the homes sell for way over listing. So list for 800s, sell for 900s. I guess I'm trying to anticipate a competitive real estate environment where we need to bid up and need to know how far we can max.

I think you could afford a house there no problem--the public schools are good so you won't need private and the commute to Alexandria is easy.

[Anonymous]

Stay put and save more.

[Anonymous]

What’s your PITI now? You’re already behind on your retirement and 529s. And your income is likely going to be pretty stagnant. I think you’re setting yourself up with a stressful quality of life. I mean you are likely buying houses not as worth as much as you’re paying for them (bc of the low inventory) and high interest rates. It just seems like a terrible idea even if you technically can afford it.

[Anonymous]

Anonymous wrote:Stay put and save more.

OP here.

For one, unwilling to do middle school where we live. For another, if we're going to move, prefer to do it sooner than later so the oldest can make friends in elementary school before middle school.

And lastly, it doesn't really change the PITI much because prices are rising where we're looking. So we could save an extra 20k a year and the home prices will rise that much anyways. The only difference in waiting is the mortgage rate which should be less by the time we are ready to buy in 9ish months or so, but don't know anything for certain on that. Certainly it won't be 2.5% though.

[Anonymous]

I think you’d be fine. We’ve had that payment for 10 years on a salary that was a little more and we were able to save a lot.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Stay put and save more.

OP here.

For one, unwilling to do middle school where we live. For another, if we're going to move, prefer to do it sooner than later so the oldest can make friends in elementary school before middle school.

And lastly, it doesn't really change the PITI much because prices are rising where we're looking. So we could save an extra 20k a year and the home prices will rise that much anyways. The only difference in waiting is the mortgage rate which should be less by the time we are ready to buy in 9ish months or so, but don't know anything for certain on that. Certainly it won't be 2.5% though.

I don't know why people think you can't afford it. It's less than all the benchmarks for affordability for you. You said you only want 2 years of state school saved up in 529--so in today's dollars that's about 60k each kid all in--you're not that far behind. (I think a lot of people at your income level want to fund 4 years private/OOS so that's why they are commenting on that). VA has great public schools at a range of price points. Your retirement is a little behind, but that's more because your income grew. If you don't want to retire early, then it's not that much of an issue. Just run the numbers, but that looks totally okay in my opinion for you.

I wouldn't wait for mortgage rates to go down--you can always refinance if they do with your size of down payment--but there's really no guarantee. They could go up if inflation isn't tamed and the fed decides to resume increases. Even if the fed pauses, they really might not go down at all.

[Anonymous]

Anonymous wrote:What’s your PITI now? You’re already behind on your retirement and 529s. And your income is likely going to be pretty stagnant. I think you’re setting yourself up with a stressful quality of life. I mean you are likely buying houses not as worth as much as you’re paying for them (bc of the low inventory) and high interest rates. It just seems like a terrible idea even if you technically can afford it.

2500. FWIW, when I project out retirement (I have. Spreadsheet projecting contributions and returns) we'll have $3.5M by the time we hit age 63ish assuming an annual 5-6 percent return, not counting other savings, plus DH doesn't think he'd retire (I probably would work part time). I'm struggling with DCUM standards vs routine middle class national standards. Like, I don't expect to do ski weekends. We are frugal with vacations, we stack travel card credit card points and have gone to europe several times without paying for airfare and even some of the lodging for us and kids. What am I saving beyond for?

I also don't expect to save further for our kids beyond two years state school (doable with family money and $500-600/month contributions per kid between now and then). I don't expect to leave them inheritance beyond whatever we got left when we go.

[Anonymous]

Anonymous wrote:What’s your PITI now? You’re already behind on your retirement and 529s. And your income is likely going to be pretty stagnant. I think you’re setting yourself up with a stressful quality of life. I mean you are likely buying houses not as worth as much as you’re paying for them (bc of the low inventory) and high interest rates. It just seems like a terrible idea even if you technically can afford it.

DP: The interest rates aren't historically high, they are still slightly below average. We had a weird period post 2009 where rates were made artificially low that is now over:
https://fred.stlouisfed.org/series/MORTGAGE30US

If OP is looking for an 800-900 house in NOVA within a reasonable commute it's not likely going to be overvalued.

[Anonymous]

Anonymous wrote:What’s your PITI now? You’re already behind on your retirement and 529s. And your income is likely going to be pretty stagnant. I think you’re setting yourself up with a stressful quality of life. I mean you are likely buying houses not as worth as much as you’re paying for them (bc of the low inventory) and high interest rates. It just seems like a terrible idea even if you technically can afford it.

+1. You are early 40s and are maybe expecting a 20K bump in a few years beyond inflation. I wouldn’t overextend on a home with two little kids, what you have in college savings, and what you have in 401Ks. You’ll be stuck underfunding those things and while it’s great that your DH doesn’t mind working forever chronic illness, age related diseases, layoffs, etc. are all (mostly) outside of his control and could impact that part of his plan.

[Anonymous]

Anonymous wrote:OP here. Here's why I don't want to be attached anymore. Living in a rowhouse we dealt with:

-A hoarding neighbor with a cockroach infestation that infiltrated our walls. It was only made better by....

-Neighbor home catching fire causing soot damage that traveled into multiple adjacent rowhouses. Displaced for nearly a year due to this, though on the plus side, not a cockroach since we moved back in.

-Smoke that infiltrated brick walls and nothing would make it better; running an air purifier nonstop when I had a newborn

Also just sick of hearing loud noises at all hours, still with the wafting smoke, and on and on.

I also freaking love gardening and I want to garden the sh*t out of a backyard that's bigger than a rowhouse plot.

So SFH only.

For college savings... I own about a quarter of my mom's house (she died) and informed my siblings I want my quarter, so at some point I'll get it. They are going to rent the house, but I don't want the share as it's in another state.

Probably $80k when all is said and done, and I will add this to the kids college fund.

please address this plan. How many siblings are there? How certain are you that they will sell so you can get your quarter when you need it? If they don’t want to sell you may have time consuming legal battles. Just saying, don’t count on a co-owned property being a reliable source of funds for something like kids college.

[Anonymous]

^PP again. 3 siblings, plus in-laws can be messy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What’s your PITI now? You’re already behind on your retirement and 529s. And your income is likely going to be pretty stagnant. I think you’re setting yourself up with a stressful quality of life. I mean you are likely buying houses not as worth as much as you’re paying for them (bc of the low inventory) and high interest rates. It just seems like a terrible idea even if you technically can afford it.

2500. FWIW, when I project out retirement (I have. Spreadsheet projecting contributions and returns) we'll have $3.5M by the time we hit age 63ish assuming an annual 5-6 percent return, not counting other savings, plus DH doesn't think he'd retire (I probably would work part time). I'm struggling with DCUM standards vs routine middle class national standards. Like, I don't expect to do ski weekends. We are frugal with vacations, we stack travel card credit card points and have gone to europe several times without paying for airfare and even some of the lodging for us and kids. What am I saving beyond for?

I also don't expect to save further for our kids beyond two years state school (doable with family money and $500-600/month contributions per kid between now and then). I don't expect to leave them inheritance beyond whatever we got left when we go.

This is unrealistic unless he plans on dying at 70. He is going to stop being employable, and his body and mind will give out. Not retiring is not a plan to pay for your care in elder years.

The reason we are saying OP can't afford it is they have not been able to save much while paying 2500 and they need to save more, so paying an extra 1500/month will make it difficult.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What’s your PITI now? You’re already behind on your retirement and 529s. And your income is likely going to be pretty stagnant. I think you’re setting yourself up with a stressful quality of life. I mean you are likely buying houses not as worth as much as you’re paying for them (bc of the low inventory) and high interest rates. It just seems like a terrible idea even if you technically can afford it.

+1. You are early 40s and are maybe expecting a 20K bump in a few years beyond inflation. I wouldn’t overextend on a home with two little kids, what you have in college savings, and what you have in 401Ks. You’ll be stuck underfunding those things and while it’s great that your DH doesn’t mind working forever chronic illness, age related diseases, layoffs, etc. are all (mostly) outside of his control and could impact that part of his plan.

So one guideline is that PITI should be 25-28% of monthly gross income. If OP spent 4k on PITI, it would be under 20%, how is this over-extending? OP said they only need 2 years of state school in their 529s.I think it's better for OP to get into a house that her kids can go to public school than in a house they don't want where the kids can't go to public school. Houses appreciate, tuition is just spent. I would put your reasonable max at 900k total price of house with 350k downpayment and 4k PITI and I tend to be conservative.