First time home buyer. Am i over extending?

[Anonymous]

I was in about the same position as you -- single mom of four year old - when I bought our townhouse. I was making maybe a little less than you - and my mortgage is 1425. But here's the thing -- my salary has gone up and I wish I had extended just a bit more to get a nicer place. At the time I had her in daycare and just couldn't see beyond that. If you think your salary will go up -- I think it could be doable.

[Anonymous]

It’s tight but you’re already paying and rent will continue to rise while your mortgage won’t. I’m a single 34yo Mom and I wouldn’t be able to afford to rent the condo I purchased nearly a decade ago. My income has increased 65% since then.

[Anonymous]

I’m pretty conservative and I think you are fine. You are switching out rent for a mortgage. Yes, there will be some additional expenses related to a house, but you are taking them into account.

[Anonymous]

Anonymous wrote:Thanks so much for all the responses. This is very helpful.

These numbers are based on actual spending except the piti and utilities are projected (down payment and earnest money are not included here as I have that separately and taken care of). Its a house and I’m thinking about doing Airbnb th days that DD is with her dad or renting a room in the summer. Also, I get regular mileage reimbursements from work that give me extra funds if I want to go outside of my budgeted expenses or if I want to spend more on fun stuff (clothes, nails, hair, etc)

I agree groceries is low not because I can’t eat well but because I have to be very cautious as it’s easy to go over this amount. I think that’s one that I would like to get up more but also it’s only me and my 3.5 year old daughter half the week so it is doable. For utilities in a 2 bedroom apartment I pay average $50 monthly so i imagine that with my current usage in abigger house It would be $150. $40 water and sewer. Currently my water and sewer bill is average $25. And internet $50.

For DD clothes, etc. I go to consignment shops and sell her old toys and clothes/shoes and buy new ones there. It saves so much. We go to playgrounds, farms and other low cost activities for now. Child support is very low (thanks for sympathizing) because we have equal time with her and share custody. I’m lucky that Family child care is reliable and will be available. Preschool is currently year round. I guess I would have to prepare and possibly get a new job when DD goes to ES.

Im also thinking that this situation will give me the motivation to get a higher paying job faster than I would. In 1.5-2 years.

Utilities depends on efficiency. I went from a very small close in Sh!t shack to a 3,000sq foot newer home and my utilities went down.

[Anonymous]

I think you can do it. Your rent isn’t much more than that. You have some emergency funds and are saving for home repairs. You’ll just have to watch your spending.

Good luck to you!

[Anonymous]

One thing to consider in terms of repair issues is whether a home protection warranty would be beneficial. That would limit your costs in the event of appliance repair and replacement, HVAC issues etc. Not sure if they are good for roofing issues.

[Anonymous]

$1830 is pretty good. It would be hard to find a 2BR rental for less than that in most parts of the area.

I'm a single mom with a $2,400/mo mortgage payment. When I bought the place, I made less than $100K. I also get child support - does your $85k include that?

Before this house, I was paying about $2,100/mo. I won't lie, I wish my payment was less. But I was able to get into a close-in suburb with good schools, so the pain is worth it. It should get slightly easier when your child is out of preschool and into public school. Good luck!

[Anonymous]

One thing that surprised me when I moved into a SFH was the water/sewer bill - I had always had water included in apartments and my old
Condo. WSSC bills every other month and it’s about $180 and during the summer it goes up to over $300 because we water the plants etc. just something to keep in mind when you are budgeting. I live in Silver Spring.

[Anonymous]

That's less than 24K a year, which is only about 1/4 of your 85K income. That's well in line with recommended ratios of housing cost to income. If you can avoid keeping-up-with-Jonses-itis, you'll be fine.

[Anonymous]

Where will you be buying, water bills in DC are very high because of a large infrastructure project. I would look into current utilities for the home you are buying.

I think it sounds doable and that you can make it work. Good luck.

[Anonymous]

OP here. I am buying in Silver Spring and i am choosing a townhouse because of (hopefully) lower utilities and maintenance costs. I just did the inspection and it is high efficiency and well insulated. My fear is to move in and just be hit with repairs but i was present during the home inspection and the TH is in good shape with a 2-year old roof, new and top of the line HVAC, and the windows are in good shape so they will last a bit. Its useful to know about the water usage and potentially higher bill in the summer.

The $85k does not include the $4,200/year of child support.

[Anonymous]

I think you'll be in good shape, but I have a few questions:

- what year was the townhouse you're purchasing built and/or renovated? Did your inspection identify any systems or issues that are likely to need fixing soon? It's awesome that roof, HVAC, and windows are new.

- how would you handle a $2k unexpected expense? Or what if your car died and you had to get a new one? Will you have a reserve of emergency savings after your down payment?

- do you have any raises built into your income now (like a COLA, or yearly increase for performance)?

If money gets tight, you could always find a part-time job when you don't have your daughter (retail, restaurant server, babysitting) to get you over the hump.

Also, your car insurance and gas looks high to me. I wonder if you could call around and see if you can get a lower insurance rate (I know you probably don't need one more thing when you're doing all the work to get a mortgage and inspect the house!)