How did you afford your $1M plus home?
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Anonymous
| OP, you may have to suck it up and commute like most people do. Especially if you did not get into the real estate home owning game early (without help) and especially if you are not willing to concede on anything else. Very few people in this area know about sacrifice, to their own detriment. Not everyone has everything, but few people here see that. I hate to tell you, but not one person I know had help from anyone, not a parent, not anyone. Now is a terrible time to buy, anyway. The only ones telling you it is a good time to buy is the realtors. I can not believe the entitlement. You should be ashamed. |
Anonymous
| What kind of money are you paying out to "help family"? |
Anonymous
Huh? Yeah, you definitely shouldn't buy when interested rates are low! Wait until prices and interest rates go up and then buy. |
Anonymous
So you would have to move again in a few years if you had bought e.g. a $700K house? So anything under $1M is not a "long term home"? I still don't understand. Yes, it is possible without family money or large real estate gains. Lots of things are possible. That doesn't mean that they are not foolish. |
Anonymous
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Unemployed parents in poor health. One of our requirements is to have a space, preferably in-law suite, where they can live with us if needed down the line.
I'm ignoring the snarky PP. I didn't ask if I was entitled- I'm happy to debate that with people who actually know me. I'm just trying to understand how others have put together the money for a large purchase. |
Anonymous
| Okay. I've had it with people who make poor decisions and can't afford the things they WANT. Not need. If you can't afford a $1m house on 400k then you really need to scour your budget. You're flushing cash down the drain somewhere. I know this. I live in Mclean in a 1m plus house, make about $400k (a bit more) and want for nothing, and still save a very good bit. In my family we were taught to save, save and save some more. |
Anonymous
I am the silly one. "Hardship" is just a generic term: the 401K plan will allow me to take up to my whole balance for a number of reasons, which they call "hardship" reasons. One such reason is the purchase of a primary residence. I will not take all the balance, but a sizable chunk of it. Why do I want to do that? This is the context: HHI of about $300K+, current mortgage about $710K, current home value about $800K. Almost no car or other debt, but nanny expenses. Problem: for a number of reasons (long story), we don't have a lot of savings, other than our $90K home equity (which will go down to $50K or so if/when we sell due to realtor fees), and my 401K. (We have good pensions, and we're not touching those). We want to move for schools to MoCo in a couple of years, but we are aiming to a smallish, not updated home. We've seen homes we like for less than $850K. So we'll plan to use about $120K of the 401K, plus some other minor savings and current equity. I don't see any other way to get the downpayment. Still silly to get $120K from a 401K plan if really want to move? Why? |
Anonymous
| The key for us was saving before kids came along. Luckily DH was really tough about it (I'm not so disciplined). |
Anonymous
So maybe you don't get something you really like. You'll be saving a lot on school tuition -- that has a value to a lot of homebuyers; if it doesn't to you, I guess you're not moving. |
Anonymous
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HHI is around $350K, mortgage (plus taxes) is about $4800. Here's how we paid for our $1M+ house:
(1) Family help for downpayment for house #1 (yes, we're very lucky). (2) We bought a house #1 for $575,000 and sold it for $800,000, so we had between 25-30% to put down on our next house. (3) We don't have to help any family, don't have school loans or other debt. (4) While we do pay for preschool & will be paying for private school + preschool next year, we don't have childcare expenses. Everyone I know under age 40 who lives in a house that costs $1M and up either has family money to help with the downpayment or made money on a previous home. Those in their late 20s-early 30s with these types of houses tend to have always had family help. And although I know a few people in $2M+ homes who did it all themselves, most of the people I know who live in those kids of homes also have family money. Without family money, it takes sacrifice and patience. |
Anonymous
It is really not that difficult. To get the features we wanted in a home in this area, the prices were $1mil +. The homes we looked at in the $700-800 range did not have everything we wanted, and yes we would have traded up in a few years. I'm not sure why you are so concerned with my mortgage that I pay on time every month. We all spend our money differently. We wanted a nice house. You may want nice cars and fancy vacations. We felt in the long run that it would make more sense to get the house we want now while we can get a really great loan. You clearly don't agree. OK. |
Anonymous
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We make $280 HHI and can afford it. We save save save save save. We don't buy fancy clothes or shoes. We drive one very old car and one new but modest car. We don't go on big vacations--all we do is drive to visit family or maybe drive for a long weekend somewhere off-season. Our TV is 10 years old and is not a flat screen. We don't pay for extra cable channels we don't need. We still buy all our groceries at Whole Foods...but I only buy the 365 brands, chicken thighs instead of breasts, no fancy cheese, etc. It's seriously cheaper than if I bought similar, organic products at Giant (and even cheaper sometimes than if I bought name-brand non-organics at Giant). We also save $1K a month for our son's college fund, fully fund our 401ks, and save an additional $1 - 2k a month for retirement on top of that. Bonuses go directly into savings--we don't think of it as money that we use to "treat ourselves." We're still paying $1200/month in law school debt too! We do our own yardwork, clean our own home, and do most home repairs ourselves.
I hear people who make much less than us talk all the time talking about their new BMWs, their fancy stereo/tv systems, their 2 week all-inclusive vacations, and their new Cartier watches and, in the same breath, talk about how poor they are. Give me a f-ing break. I'm now a SAHM, but we saved almost all of this money when I was working and we were paying a ridiculous of money for our on-the-books nanny--took at least 80% of my take-home pay. I have a Cartier watch that I bought for myself when I was working my a$$ off and we used to go on crazy amazing vacations when we were newly married, big law firm associates, but once we decided we wanted to buy a home that we could raise a family in, we cut out all of the extra spending and made the home our #1 priority. I also left my big law job several years ago and was making a much smaller salary, so the bulk of our savings came from DH's job. You CAN buy a million dollar home if you don't think of yourself as the kind of people who can afford a million dollar home. We live modestly, but after 7 years of working, we have over $600k in assets. We also lost money on the last place we sold, so we don't have that equity to rely on when we buy our next place. I have family money, but we don't touch it. We also don't live like we're poor, but we don't spend our money unwisely or use it to buy tons of "stuff." Definitely helps that, like 11:21, we saved a ton before our two kids were born and DH is very very cautious about spending. But even with two small kids, we still save a ton of money by not spending carelessly. We could afford up to $1.2M and comfortably make our mortgage payments, but DH won't even consider it. In fact, he's hoping that the home we buy is closer to $850K than $1M so that we have some cushion. |
Anonymous
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How much longer will you have the nanny?
I also have a hard time understanding why you can't save at least 30K/year. I save 10K on a little over 200K/year and an almost $4000 mortgage. |
Anonymous
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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 |
Anonymous
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We saved up a lot before DS was born. We also saved a lot before we got married. We are fortunate in that we got scholarships for our grad school, so we have little to no educational debt. We make $240K a year.
What we did was, we used the money we saved to pay off more than 20 percent as the down payment so that our monthly payments would be lower. |