What HHI to feel comfortable with a family in a close-in city like Bethesda/Arlington/McLean?

[Anonymous]

If you bought a house in the last few years, I think the number is closer to 600-750k. This allows you to save 100K +/yr while living a very comfortable life.

[Anonymous]

Anonymous wrote:We're a family of 4 with $300k in Chevy Chase and it's fine

20% down
Bought at age 38, 3 years ago at 5% interest
Dual non-profit and fed lawyers
No family help beyond paying for undergrad

[Anonymous]

Agree it depends on how you define American Dream. SFH or is a TH or condo acceptable? Does the housing need to be large and fully renovated or are you ok with a small, older house? How picky are you about neighborhood and school zones? What kind of cars do you want to drive? What kind of schools and activities are you looking for your kids? All of these choices make a difference.

[Anonymous]

Anonymous wrote:

Anonymous wrote:To get a real answer you first need to be more specific about how you define the American dream. That "expenses" category is where you'll see the biggest variation in the incomes people think they need. Also, SFH or town house? One SAHP or both parents working (and thus needing full time child care)?

And you need to realize that most people chiming in to say $300k bought their homes 10-20 years ago and locked in a 3 percent mortgage.

This is us. Bought more then we could afford when income between the 2 of us was about $160, house was $320,000. Same house today (and yes, we've made a lot of improvements, including more square footage which was about $300k at the time), is worth about $1.4 million today and our income is over $400k.

So my advice, stretch to buy when you are young, choose the best location you cam, because close in always goes up (I believe this to be true even with the current administration)

[Anonymous]

Anonymous wrote:Bought in 2022, in Rockville at age 28. Hhi of 390k. We’re comfortable but if we had bought in Bethesda, we would have been tight. But part of my budget is aggressively saving for an early retirement at 45 so that affects what we’re willing to spend

I think Bethesda is doable on 350k-400k but depends on your spending habits and goals

Rockville lol. This thread isn’t for you.

[Anonymous]

Anonymous wrote:We were comfortable on two decent government salaries. We made compromises like living on a busy street, but had a very good quality of life. I think a HHI of $300k is plenty.

Agree- this is us and we’re comfortable (our home is older and small, but our commutes are not horrendous and our neighbor and schools are great).

[Anonymous]

You don’t need 600k to buy in these places. What you need is help with the down payment. We did that with our kid and they’re doing fine with a 900k mortgage making half of that.

[Anonymous]

Anonymous wrote:Real answer: We are living the American dream but it's funded by previous generations plus what we earn. DH makes 300k, I make 90k. We bought in North Arlington in 2003 and the mortgage is paid off with family money. Family money also funded 529s and paid private school tuition.

I appreciate your honesty about this! The people I know in your shoes seem non-aware of how those facts positively influence their lifestyle.

[Anonymous]

We feel comfortable at about $1m HHI. It allows us a nice but not crazy home with a 3-car garage, separate rooms for all the kids, a good school district, and a nice backyard. We can afford to max out retirement accounts, $19,000 per child per year into 529 accounts, help out one of our parents, and save a little in a brokerage account. We take two vacations a year, drive decent cars, and don't stress over the little things. We are not rich, though, meaning we don't have a second home, fly first class, buy designer clothes, send our kids to private school, or go on international vacations every year.

[Anonymous]

This basically boils down to how much income to afford at least a 1.3 million dollar house (with a million-ish dollar mortgage). Assuming this translates to roughly $8,000 monthly payment (with escrows) then you could do it on 300K a year, but many would prefer not to. Maybe 350-400K is more reasonable.

[Anonymous]

$500k and public schools

[Anonymous]

Anonymous wrote:This basically boils down to how much income to afford at least a 1.3 million dollar house (with a million-ish dollar mortgage). Assuming this translates to roughly $8,000 monthly payment (with escrows) then you could do it on 300K a year, but many would prefer not to. Maybe 350-400K is more reasonable.

Sorry, but $1.3m is on the ow end in those neighborhoods. The majority of your kids’ school friends will live in houses worth much more. The “poor kids” live in the $1.3 and under houses.

[Anonymous]

The reality is housing rates make it much more challenging now. My wife and I bought two years ago at $1.1 million with 10% down at 6.85% and our PITI is ~$7500. At 2% that same payment would be $3000 a month less.

[Anonymous]

We have done fine with <$250k.

[Anonymous]

Depends how much you put down. In Potomac and Bethesda a realtor said average downpayment is 40 percent. Makes sense who can afford the mortgage otherwise.

I work at a bank and we have a few Piggyback customers lately. The do a 30 years fixed mortgage combined with an adjustable ARM at same time. Theory is they are dual income they aggressively pay off ARM prior to adjustment then wife when kids come if wants to be SAHM or one loses job they are comfortable as only the smaller 30 year fixed is left.

For instance buy a 1.5 million dollars home. Get a 30 year mortgage of 800K, get a ARM of 400K and put down 300K. Then couple starts with low interest rate 10/1 year Teaser ARM starts prepaying that aggressively while dual income. By year 10 ARM done, by then second or third kid on way, working may not make sense for Mom and she goes part time or SAHM. The neighbors all wonder how she can afford it, but reality they just worked their butts off. Or could be husband loses job and he could be stay at home. Or both lose jobs down the road in a recession The first few years are risky. But taking a large 30 years mortgage is also very risky if you lose your job as it is high all 30 years.

It is no longer 2000 or 2018 where home prices only go up and mortgage rates only go down. We could get more mortgage rates up and home prices up.