Afford $1.8M on 300K?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have HHI at 450K and bought a 1.8m house last year. Monthly payment is around $8000 including tax and insurance. We don't have other debt and no car loan. Monthly utilities is around $500.

So without doing anything, it is already $8500 going out every month. We also max out 401K and other stock purchase plans but cut travel and goods spending for almost half year.

I just hope the property tax will not go higher next year.

PP, can I ask what made you decide to take on such a huge monthly mortgage? Are you expecting salary increase or some windfall to pay it down? We are similar HHI but find it very mind blowing to have such high portion of take home pay into housing. Please help us think it through.

PP here. We took on the mortgage because of low rate at 2.75% for 30 years and we do expect salary increase and some positive cash flow from our investiment property (luckily I got it rented out last month.). For the $8000 monthly payment, we are expecting a refund from escrow account for overestimating the property tax so next year the monthly payment including tax and insurance could reduce to $7600. We also expect the housing price around DMV to be more stable than other areas such as Florida, Arizona, and Texas. The principle part of the monthly payment (around $2700) is deemed as monthly saving towards equity value of the house.

Whatever makes you feel better . . .

[Anonymous]

Damn we make $400k and I feel anxious about a $4500 mortgage

[Anonymous]

Is there a reason the children cannot share offices? How old are they? You don't need to be around to supervise their work? I don't think children need offices. They just need homework space.Could something like this work?

[Anonymous]

Anonymous wrote:Damn we make $400k and I feel anxious about a $4500 mortgage

Well...you're also being ridiculous. Come on. You know you can easily afford more

[Anonymous]

Anonymous wrote:Is there a reason the children cannot share offices? How old are they? You don't need to be around to supervise their work? I don't think children need offices. They just need homework space.Could something like this work?

Op here. I said "ideally" we would like separate offices for the two kids (late elementary). If they are too close together, they will either fight or play instead of concentrating on their work. But right now we have a set up similar to your pic and we're making it work, atm. But where did you get that pic - if its from Ikea, I might be interested - thanks!

My ideas described in this thread are aspiratonal - I think most posters understand that. But I think several posters are thinking that I have immutable demands that are unbelievable at my HHI.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is there a reason the children cannot share offices? How old are they? You don't need to be around to supervise their work? I don't think children need offices. They just need homework space.Could something like this work?

Op here. I said "ideally" we would like separate offices for the two kids (late elementary). If they are too close together, they will either fight or play instead of concentrating on their work. But right now we have a set up similar to your pic and we're making it work, atm. But where did you get that pic - if its from Ikea, I might be interested - thanks!

My ideas described in this thread are aspiratonal - I think most posters understand that. But I think several posters are thinking that I have immutable demands that are unbelievable at my HHI.

I just googled shared desk space but I do think it's from IKEA.

[Anonymous]

Our HHI is $300K and we live in a low cost area and our mortgage is only $2,000 a month and I can say we live a lavish lifestyle.

We eat out once a week. We can’t afford 15K vacations. We have to save to buy some furniture. Just groceries are about 2K a month.

We spurge $24K a year on DC for a private school.

I can’t imagine having 9K mortgage. That would make us poor.

[Anonymous]

Anonymous wrote:Our HHI is $300K and we live in a low cost area and our mortgage is only $2,000 a month and I can say we live a lavish lifestyle.

We eat out once a week. We can’t afford 15K vacations. We have to save to buy some furniture. Just groceries are about 2K a month.

We spurge $24K a year on DC for a private school.

I can’t imagine having 9K mortgage. That would make us poor.

I mean I CANT say we live lavishly. We don’t.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is there a reason the children cannot share offices? How old are they? You don't need to be around to supervise their work? I don't think children need offices. They just need homework space.Could something like this work?

Op here. I said "ideally" we would like separate offices for the two kids (late elementary). If they are too close together, they will either fight or play instead of concentrating on their work. But right now we have a set up similar to your pic and we're making it work, atm. But where did you get that pic - if its from Ikea, I might be interested - thanks!

My ideas described in this thread are aspiratonal - I think most posters understand that. But I think several posters are thinking that I have immutable demands that are unbelievable at my HHI.

I can’t believe I keep commenting on this thread. Yes, you have a high HHI. The problem is that you live in the DMV which is one of the most expensive areas to live in the US and you want to live in McLean which is one of the most expensive suburbs in the DMV. You likely could get everything you want somewhere in Loudon. But I’m not sure bc I haven’t lived in the DMV for 8-9 years. You also have to know that most people don’t get their perfect house unless they make some sort of compromise and you may need to compromise on location.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is there a reason the children cannot share offices? How old are they? You don't need to be around to supervise their work? I don't think children need offices. They just need homework space.Could something like this work?

Op here. I said "ideally" we would like separate offices for the two kids (late elementary). If they are too close together, they will either fight or play instead of concentrating on their work. But right now we have a set up similar to your pic and we're making it work, atm. But where did you get that pic - if its from Ikea, I might be interested - thanks!

My ideas described in this thread are aspiratonal - I think most posters understand that. But I think several posters are thinking that I have immutable demands that are unbelievable at my HHI.

Good grief. You are contemplating using the *entire* non-tax deferred portion of your monthly budget for a house.

Now: $3k mortgage, $6k savings (so you say, at least).
Proposed: $9k mortgage, no savings (or so the math says, at least). This leaves no margin for error, or at least no way to replenish savings expended on an emergency.

That is, as many people have told you, nuts.

[Anonymous]

Anonymous wrote:

I can’t believe I keep commenting on this thread. Yes, you have a high HHI. The problem is that you live in the DMV which is one of the most expensive areas to live in the US and you want to live in McLean which is one of the most expensive suburbs in the DMV. You likely could get everything you want somewhere in Loudon. But I’m not sure bc I haven’t lived in the DMV for 8-9 years. You also have to know that most people don’t get their perfect house unless they make some sort of compromise and you may need to compromise on location.

What about these two?
https://www.redfin.com/VA/McLean/8025-Old-Dominion-Dr-22102/home/9267653

https://www.redfin.com/VA/McLean/1237-Beverly-Rd-22101/home/9390510

[Anonymous]

Anonymous wrote:Our HHI is $300K and we live in a low cost area and our mortgage is only $2,000 a month and I can say we live a lavish lifestyle.

We eat out once a week. We can’t afford 15K vacations. We have to save to buy some furniture. Just groceries are about 2K a month.

We spurge $24K a year on DC for a private school.

I can’t imagine having 9K mortgage. That would make us poor.

Good grief what are your expenses? You sound like you have a lot of bills.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our HHI is $300K and we live in a low cost area and our mortgage is only $2,000 a month and I can say we live a lavish lifestyle.

We eat out once a week. We can’t afford 15K vacations. We have to save to buy some furniture. Just groceries are about 2K a month.

We spurge $24K a year on DC for a private school.

I can’t imagine having 9K mortgage. That would make us poor.

Good grief what are your expenses? You sound like you have a lot of bills.

Pretty sure that $24k/yr for private school is impactful. I’m guessing they are probably maxing out retirement and college savings as well.

[Anonymous]

OP, curious about why you posted in the Real Estate forum instead of the Money and Finances one? You’ve gotten good advice about your insane house plan, but the folks over there could help you do a better job with college savings and figure our a better plan than putting 6k a month into a savings account.

I understand that you are talking about aspirational goals, but would like to note that it’s also insane to aspire to have a house with four offices for a family of four. Don’t you have a dining room table and room in the kitchen where your kids could work separately? And are you really not going to allow them to ever do their homework in their bedrooms either with a laptop in bed or at a desk?

[Anonymous]

Anonymous wrote:OP Here. sorry for the delay - running children around.
We have two kids in public schools and have typical UMC activities and expenses - nothing to write home about. I'm glad I'm getting alot of "That's crazy"s because I also think it's a bit crazy to buy a house whose price is 6X HHI.

We take home just under 16K a month after 401K, HSA, 529s, so after

$3.5K PITI
$1K utilities
$6K credit cards (everything including groceries goes on cards),

We have like 6K left over each month. We've saved quite a bit over the last couple of years, but the money just goes into a savings account (we don't put non-retirement money in stocks). So what to do with that money? Buy a townhouse/condo and rent it out? Or increase PITI to $9K and "invest" in our primary house?

To those asking that we just move to a less expensive house (or one that's farther away) - we've already decided where we want to live (based on schools /neighborhood /commute), so our question for DCUM is not "where can I find a 4000sqft house on my budget" but rather "I think I can afford $9K PITI - should I?"

Thanks for the responses.

How old are you and your kids, and how much have you saved for college and retirement?

I gotta say, our HHI is $270k, and the idea of a mortgage payment that high makes me want to vomit. Our kids are in college, and we pay $3k per month toward tuition and room & board (savings covers the rest). In-state cost of attendance at W&M is $38k, and people in our circumstances don't get financial aid.