1.6MM home- how much would you want to be making?

[Anonymous]

We make $580,000 and I refused to go over $1.2 million.

[Anonymous]

It really depends on how stable income is and will it grow?
If so i think you can easily do around $6000. But i wouldnt do more than that.

[Anonymous]

INsane on your salary

[Anonymous]

We make 450k and almost bought a 1.6m with 245k down. We have no other debt.

[Anonymous]

As long as the mortgage doesn't exceed 40% your gross Inc dti you should be fine

[Anonymous]

I thought this post might show numbers similar to ours bc Ive seen on DCUM people react to our situation as "very risky" too. We have a 300k HHI and bought a 950k house...putting 200 down so a 750k mortgage. I feel like this is very comfortable. We save aggressively for retirement but do public schools. If we had an extra 3k on our mortgage very month I wouldn't be comfortable, in fact I wouldn't be buying much besides the right to stay in my house. Have you really done a realistic monthly budget? I would think the numbers speak for themselves.

[Anonymous]

OP here- thanks very much for the comments, greatly appreciate the feedback.

My kids are 5 and 2 - one just started kindergarten (public school), and the other has some activities during the week (little gym, etc.)

Here is the math I'm doing (may be wrong/short-sighted, so any suggestions are appreciated):

310K / 12 = 25833 gross monthly
* .67 (for 33% tax) = 17300 net monthly income
- 7000 PITI (if I put down 28-30% instead of 20%)
- 1500 housing costs (utilities, house cleaning, yard work, etc.)
- 5500 all other expenses, an average over 12 months, includes all necessary and luxury expenses such as food/groceries/restaurants, shopping, clothes, travel, etc.
- 175 car insurance (2 cars)

= a bit above $3K left

Now a few notes:

1) 401K: i'm currently contributing 6% of main-job income with 50% match (around 13K per year)

2) I fully expect both my main job as well as my side job to increase income over the next couple of years (possibly 50K more over the next 1-2 years)

3) DW may go back part-time in the future (she's a hygienist), after the youngest gets to kindergarten, probably can bring in 1.5K net monthly income

Thoughts? Thanks again for the feedback/comments so far.

[Anonymous]

You will be house poor. If your job is stable and income will increase, it may be doable but very very tight.

DH was earning about 300k when we bought our $900k house. We put 10% down at that time. We considered buying a $1.5m house when our HHI hit $500k but decided not to. Our HHI is now $1m and considering moving to a $2m house but we are seriously considering staying because our retirement savings are not great ($500k). It took us a while to pay off all our school loans and we have an expensive lifestyle. House can be paid off this year though.

[Anonymous]

Anonymous wrote:OP here- thanks very much for the comments, greatly appreciate the feedback.

My kids are 5 and 2 - one just started kindergarten (public school), and the other has some activities during the week (little gym, etc.)

Here is the math I'm doing (may be wrong/short-sighted, so any suggestions are appreciated):

310K / 12 = 25833 gross monthly
* .67 (for 33% tax) = 17300 net monthly income
- 7000 PITI (if I put down 28-30% instead of 20%)
- 1500 housing costs (utilities, house cleaning, yard work, etc.)
- 5500 all other expenses, an average over 12 months, includes all necessary and luxury expenses such as food/groceries/restaurants, shopping, clothes, travel, etc.
- 175 car insurance (2 cars)

= a bit above $3K left

Now a few notes:

1) 401K: i'm currently contributing 6% of main-job income with 50% match (around 13K per year)

2) I fully expect both my main job as well as my side job to increase income over the next couple of years (possibly 50K more over the next 1-2 years)

3) DW may go back part-time in the future (she's a hygienist), after the youngest gets to kindergarten, probably can bring in 1.5K net monthly income

Thoughts? Thanks again for the feedback/comments so far.

How old are you?

My DH makes the exact same in salary only and he brings home $14,500 per month. 26 pay cycles. 2 months we will get an extra pay check. We have a $5k mortgage and we spend every cent of his salary. I'm a SAHM and kids are 5, 7 and currently pregnant. Kids play sports and go to camp. We spent 6k on summer camps this year.

DH earns a bonus equal to his salary per year and we save that.

[Anonymous]

It wouldn't make me feel comfortable but you don't have a lot of other debt and your wife should be easily be able to go back to work. You are also young so probably on the upside of earnings.

The one thing that maybe makes me think it is an okay idea is that we now live in a house we bought for $1.5 million, it is our third home. We have wasted so much on transaction costs selling two previous homes in the DC area. The first starter home appreciated rapidly (we bought in DC in 1996) but there was no way we were going to stay in a small 1 bathroom home with 3 kids. We outgrew the next home too. If we'd just bought our "forever" home the first time, it would have been more risky but we would have wasted a lot less in moving and real estate fees over the years.

[Anonymous]

Anonymous wrote:OP here- thanks very much for the comments, greatly appreciate the feedback.

My kids are 5 and 2 - one just started kindergarten (public school), and the other has some activities during the week (little gym, etc.)

Here is the math I'm doing (may be wrong/short-sighted, so any suggestions are appreciated):

310K / 12 = 25833 gross monthly
* .67 (for 33% tax) = 17300 net monthly income
- 7000 PITI (if I put down 28-30% instead of 20%)
- 1500 housing costs (utilities, house cleaning, yard work, etc.)
- 5500 all other expenses, an average over 12 months, includes all necessary and luxury expenses such as food/groceries/restaurants, shopping, clothes, travel, etc.
- 175 car insurance (2 cars)

= a bit above $3K left

Now a few notes:

1) 401K: i'm currently contributing 6% of main-job income with 50% match (around 13K per year)

2) I fully expect both my main job as well as my side job to increase income over the next couple of years (possibly 50K more over the next 1-2 years)

3) DW may go back part-time in the future (she's a hygienist), after the youngest gets to kindergarten, probably can bring in 1.5K net monthly income

Thoughts? Thanks again for the feedback/comments so far.

How about health insurance and the actual 401k deduction from your salary?

More house equals more costs. When we bought our 6000 sf house, we spent 50k in furniture when we moved in. There is a lot of maintenance and upgrades. You may need blinds, drapes, carpets, lighting, etc.

You have no emergency funds.

[Anonymous]

Think about utilities for a large house.

[Anonymous]

Anonymous wrote:I'm curious to see opinions on how much you think your HHI should be if you were to purchase a 1.6MM home, 20-25% down (i.e., around $7000-7500 monthly mortgage).

Assume no student debt, no car loans, and no child care costs.

I'm thinking about doing this sometime next year, but in seeing the housing vs. HHI numbers of people here on various threads, I think I'd be on the 'very risky' side. HHI is around 310K (wife is SAHM for now), 2 'jobs' so side job is bringing in good income + has lots of income upside potential, and if I put down 20% down I'd still have over 125K liquid cash in the bank.

In addition, my retirement savings are below average I'd say (75K 401K/IRA, 1 rental property with 140K equity).

Interested to hear your thoughts.

So your hhi is 310 and you'd pay 7500/month. Our hhi is 385 and we pay 7500/month avg between mortgage and child care. We max 401k but other than that and a tiny bit for college don't save monthly. Some months we dip into savings depending on what expenses come up.

[Anonymous]

Eh - you can probably do it but it'll be challenging to save money and you'll probably find things are a bit tighter than you'd like for at least the first few years. If your income does go up as you think it will and wife goes back to work, then that should ease things up a bit. You should ramp up your retirement savings tho, esp since your wife doesn't work and isn't contributing to a 401k or similar. Honestly, I'd probably try to stay under $1.3 max if I were you - that's still a lot higher than what most folks on dcum would suggest but you're young and as long as you stay in the house a long time, it would probably be fine. Even in this region, that price should still give you a lot of choices in really good neighborhoods.

[Anonymous]

Anonymous wrote:OP here- thanks very much for the comments, greatly appreciate the feedback.

My kids are 5 and 2 - one just started kindergarten (public school), and the other has some activities during the week (little gym, etc.)

Here is the math I'm doing (may be wrong/short-sighted, so any suggestions are appreciated):

310K / 12 = 25833 gross monthly
* .67 (for 33% tax) = 17300 net monthly income
- 7000 PITI (if I put down 28-30% instead of 20%)
- 1500 housing costs (utilities, house cleaning, yard work, etc.)
- 5500 all other expenses, an average over 12 months, includes all necessary and luxury expenses such as food/groceries/restaurants, shopping, clothes, travel, etc.
- 175 car insurance (2 cars)

= a bit above $3K left

Now a few notes:

1) 401K: i'm currently contributing 6% of main-job income with 50% match (around 13K per year)

2) I fully expect both my main job as well as my side job to increase income over the next couple of years (possibly 50K more over the next 1-2 years)

3) DW may go back part-time in the future (she's a hygienist), after the youngest gets to kindergarten, probably can bring in 1.5K net monthly income

Thoughts? Thanks again for the feedback/comments so far.

Is that your actual take home and you don't owe taxes at the end of the year? How?!