Just bought an $800,000 house on a $186,000 salary and now I'm panicking....

[Anonymous]

Anonymous wrote:It amazes me how many people on this board must be terrible with money and waste money on who knows what. If you are one of those people, then you shouldn't buy that much house with your income. If you are good with money and don't go crazy spending money you will be fine. Our HHI is 170K with 2 kids and we just bought a 700K house (550K mortgage, 2,900 PITI). It is about $500 more per month than our last house, so we are comfortable we can afford it.

I totally agree. What do people need so much money to spend on? Our combined gross income is only $150000; we purchased a house for $800000 5 years ago which is paid off now. We sold our previous house and put a downpayment of $650000. We have 1 child that goes to public school. We are careful with money and don't spend it on frivolous things like going to Starbucks, nail salons etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It amazes me how many people on this board must be terrible with money and waste money on who knows what. If you are one of those people, then you shouldn't buy that much house with your income. If you are good with money and don't go crazy spending money you will be fine. Our HHI is 170K with 2 kids and we just bought a 700K house (550K mortgage, 2,900 PITI). It is about $500 more per month than our last house, so we are comfortable we can afford it.

I totally agree. What do people need so much money to spend on? Our combined gross income is only $150000; we purchased a house for $800000 5 years ago which is paid off now. We sold our previous house and put a downpayment of $650000. We have 1 child that goes to public school. We are careful with money and don't spend it on frivolous things like going to Starbucks, nail salons etc.

The difference is a large down payment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It amazes me how many people on this board must be terrible with money and waste money on who knows what. If you are one of those people, then you shouldn't buy that much house with your income. If you are good with money and don't go crazy spending money you will be fine. Our HHI is 170K with 2 kids and we just bought a 700K house (550K mortgage, 2,900 PITI). It is about $500 more per month than our last house, so we are comfortable we can afford it.

I totally agree. What do people need so much money to spend on? Our combined gross income is only $150000; we purchased a house for $800000 5 years ago which is paid off now. We sold our previous house and put a downpayment of $650000. We have 1 child that goes to public school. We are careful with money and don't spend it on frivolous things like going to Starbucks, nail salons etc.

I don't spend much on frivolous things either. But I'm also smart enough to notice that $h!t happens. Maybe the good health of your and your family and good salary that you enjoy at at 35 won't last a full 30 years?

[Anonymous]

Anonymous wrote:

Look, you are doing ok. Coming to this message board is one of the worst things you could have done for your mental health. Apparently everyone here makes 1M and buys a $400K house, but somehow is still paying it off after 20 years. People ain't right. Even if you wanted to back out and sell, the transactions costs would be near ruinous and set you back for years. Say another 5-8% or $50-60K depending on transaction costs. Do you really want to blow $50-60K right now?

Now if you aren't used to only spending 7K/month after retirement and housing, you may need to cut down a bit; but nothing crazy (i.e. no first class tickets to paris...). You may have spent a tad too much on housing, but it isn't nuts.


Seriously, this board is so skewed when it comes to money and debt.

Yeah the dcum millionaires are looking for homes for under 400k. Where the heck are those homes? Boondocks va and Trump town Maryland? Doesn't make sense.

[Anonymous]

Anonymous wrote:OP these are the weaknesses in your situation:

You and spouse only save 18,000 per year for retirement and that includes the employer contribution. That seems really, really low. What are your current retirement savings?

You are late 30s with a 30 year mortgage. This house will likely mean you can't retire until your mortgage is paid. But the average retirement age is 61 and most people at that age retire involuntarily. Do you have a plan for how to pay your mortgage if you have to quit your job for health reasons?

She's already a GS 15 so unless she becomes SES, her salary will not keep pace with inflation, so her expensive mortgage will likely never "feel" cheaper due to salary increases.

OP, make a plan to mitigate these issues and you will be fine.

Who stays in a house for 30 years? Not sure why some think you have to pay off your house before you retire. This is a HCOL area. A lot of people will move to a lower cost area and it doesn't matter if their house is paid off or not. Others will want to downsize to a smaller, more accessible place.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP these are the weaknesses in your situation:

You and spouse only save 18,000 per year for retirement and that includes the employer contribution. That seems really, really low. What are your current retirement savings?

You are late 30s with a 30 year mortgage. This house will likely mean you can't retire until your mortgage is paid. But the average retirement age is 61 and most people at that age retire involuntarily. Do you have a plan for how to pay your mortgage if you have to quit your job for health reasons?

She's already a GS 15 so unless she becomes SES, her salary will not keep pace with inflation, so her expensive mortgage will likely never "feel" cheaper due to salary increases.

OP, make a plan to mitigate these issues and you will be fine.

Who stays in a house for 30 years? Not sure why some think you have to pay off your house before you retire. This is a HCOL area. A lot of people will move to a lower cost area and it doesn't matter if their house is paid off or not. Others will want to downsize to a smaller, more accessible place.

OP didn't mention any plans to retire to a LCOL. In fact, she said this was her "forever home."

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP these are the weaknesses in your situation:

You and spouse only save 18,000 per year for retirement and that includes the employer contribution. That seems really, really low. What are your current retirement savings?

You are late 30s with a 30 year mortgage. This house will likely mean you can't retire until your mortgage is paid. But the average retirement age is 61 and most people at that age retire involuntarily. Do you have a plan for how to pay your mortgage if you have to quit your job for health reasons?

She's already a GS 15 so unless she becomes SES, her salary will not keep pace with inflation, so her expensive mortgage will likely never "feel" cheaper due to salary increases.

OP, make a plan to mitigate these issues and you will be fine.

Who stays in a house for 30 years? Not sure why some think you have to pay off your house before you retire. This is a HCOL area. A lot of people will move to a lower cost area and it doesn't matter if their house is paid off or not. Others will want to downsize to a smaller, more accessible place.

OP didn't mention any plans to retire to a LCOL. In fact, she said this was her "forever home."

$800k house = $8000 per year in property taxes + $8000 dollars per year in maintenance costs + $2000 per year for homeowners insurace = $18,000 per year (in today's dollars). That is equal to the amount that OP saves for retirement each year. Right now, she only saves enough to cover the costs of her house in retirement.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It amazes me how many people on this board must be terrible with money and waste money on who knows what. If you are one of those people, then you shouldn't buy that much house with your income. If you are good with money and don't go crazy spending money you will be fine. Our HHI is 170K with 2 kids and we just bought a 700K house (550K mortgage, 2,900 PITI). It is about $500 more per month than our last house, so we are comfortable we can afford it.

I totally agree. What do people need so much money to spend on? Our combined gross income is only $150000; we purchased a house for $800000 5 years ago which is paid off now. We sold our previous house and put a downpayment of $650000. We have 1 child that goes to public school. We are careful with money and don't spend it on frivolous things like going to Starbucks, nail salons etc.

I like to take care of myself - nails, hair, skin, pilates, gym, barre. Looking and feeling good are not frivolous.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It amazes me how many people on this board must be terrible with money and waste money on who knows what. If you are one of those people, then you shouldn't buy that much house with your income. If you are good with money and don't go crazy spending money you will be fine. Our HHI is 170K with 2 kids and we just bought a 700K house (550K mortgage, 2,900 PITI). It is about $500 more per month than our last house, so we are comfortable we can afford it.

I totally agree. What do people need so much money to spend on? Our combined gross income is only $150000; we purchased a house for $800000 5 years ago which is paid off now. We sold our previous house and put a downpayment of $650000. We have 1 child that goes to public school. We are careful with money and don't spend it on frivolous things like going to Starbucks, nail salons etc.

I like to take care of myself - nails, hair, skin, pilates, gym, barre. Looking and feeling good are not frivolous.

priorities - priorities.
I'd rather have a house I like then spend money on pilates, gym and barre. Hiking and biking is free.

PS didn't read the whole 13 pages, but I did same thing as OP - bought $785K house in my late 30s on under $200K HHI 7 years ago. It was a bit tight at the beginning with 4.5K monthly payments, but now we're fine. Income grew overtime, rates went down, initial set-up costs went away.
Everything s possible if you set your mind and stick to your goals.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It amazes me how many people on this board must be terrible with money and waste money on who knows what. If you are one of those people, then you shouldn't buy that much house with your income. If you are good with money and don't go crazy spending money you will be fine. Our HHI is 170K with 2 kids and we just bought a 700K house (550K mortgage, 2,900 PITI). It is about $500 more per month than our last house, so we are comfortable we can afford it.

I totally agree. What do people need so much money to spend on? Our combined gross income is only $150000; we purchased a house for $800000 5 years ago which is paid off now. We sold our previous house and put a downpayment of $650000. We have 1 child that goes to public school. We are careful with money and don't spend it on frivolous things like going to Starbucks, nail salons etc.

I like to take care of myself - nails, hair, skin, pilates, gym, barre. Looking and feeling good are not frivolous.

priorities - priorities.
I'd rather have a house I like then spend money on pilates, gym and barre. Hiking and biking is free.

PS didn't read the whole 13 pages, but I did same thing as OP - bought $785K house in my late 30s on under $200K HHI 7 years ago. It was a bit tight at the beginning with 4.5K monthly payments, but now we're fine. Income grew overtime, rates went down, initial set-up costs went away.
Everything s possible if you set your mind and stick to your goals.

+1. Why stop at an $800k house? How about 2million? Your income will increase. Just make a budget!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It amazes me how many people on this board must be terrible with money and waste money on who knows what. If you are one of those people, then you shouldn't buy that much house with your income. If you are good with money and don't go crazy spending money you will be fine. Our HHI is 170K with 2 kids and we just bought a 700K house (550K mortgage, 2,900 PITI). It is about $500 more per month than our last house, so we are comfortable we can afford it.

I totally agree. What do people need so much money to spend on? Our combined gross income is only $150000; we purchased a house for $800000 5 years ago which is paid off now. We sold our previous house and put a downpayment of $650000. We have 1 child that goes to public school. We are careful with money and don't spend it on frivolous things like going to Starbucks, nail salons etc.

I like to take care of myself - nails, hair, skin, pilates, gym, barre. Looking and feeling good are not frivolous.

priorities - priorities.
I'd rather have a house I like then spend money on pilates, gym and barre. Hiking and biking is free.

PS didn't read the whole 13 pages, but I did same thing as OP - bought $785K house in my late 30s on under $200K HHI 7 years ago. It was a bit tight at the beginning with 4.5K monthly payments, but now we're fine. Income grew overtime, rates went down, initial set-up costs went away.
Everything s possible if you set your mind and stick to your goals.

I also hike but highlights and derms are not free. I'd rather age like Paulina Porizkova than be house poor, but again, this is my priority. I enjoy a good meal and a nice piece of jewelry.

[Anonymous]

Jewelry? I would prefer to put my money into an appreciating asset.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here...

Our net income - after taxes and after saving for retirement - is about $11,000. So our total PITI payment will be 34% of our net income.

The good news is that we don't have any other debt (no credit cards, student loan, or car payments).

So you are concerned you can't live on 7k a month?

The net pay seems too high. My base salary is $180K and after fully funding my 401k, HSA, and paying for insurance my take home is about $9000 per month.

And yes, I think you bought too expensive of a house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It amazes me how many people on this board must be terrible with money and waste money on who knows what. If you are one of those people, then you shouldn't buy that much house with your income. If you are good with money and don't go crazy spending money you will be fine. Our HHI is 170K with 2 kids and we just bought a 700K house (550K mortgage, 2,900 PITI). It is about $500 more per month than our last house, so we are comfortable we can afford it.

I totally agree. What do people need so much money to spend on? Our combined gross income is only $150000; we purchased a house for $800000 5 years ago which is paid off now. We sold our previous house and put a downpayment of $650000. We have 1 child that goes to public school. We are careful with money and don't spend it on frivolous things like going to Starbucks, nail salons etc.

I like to take care of myself - nails, hair, skin, pilates, gym, barre. Looking and feeling good are not frivolous.

priorities - priorities.
I'd rather have a house I like then spend money on pilates, gym and barre. Hiking and biking is free.

PS didn't read the whole 13 pages, but I did same thing as OP - bought $785K house in my late 30s on under $200K HHI 7 years ago. It was a bit tight at the beginning with 4.5K monthly payments, but now we're fine. Income grew overtime, rates went down, initial set-up costs went away.
Everything s possible if you set your mind and stick to your goals.

+1. Why stop at an $800k house? How about 2million? Your income will increase. Just make a budget!

Yes, on this forum people will tell you the stories of how incomes went up and everything worked out. You will not hear the sad stories where things did not work out. It's a dumb idea to buy more house than you can afford currently based on the hopes that incomes will go up in the future. Bad financial planning and irresponsible if you have a family. Some people are living in a bubble or believe they are invincible. Just look at around at all of the covid-related job loss. Do you think your job is bullet proof or you will always earn as much as you do now?

[Anonymous]

Anonymous wrote:

Anonymous wrote:It amazes me how many people on this board must be terrible with money and waste money on who knows what. If you are one of those people, then you shouldn't buy that much house with your income. If you are good with money and don't go crazy spending money you will be fine. Our HHI is 170K with 2 kids and we just bought a 700K house (550K mortgage, 2,900 PITI). It is about $500 more per month than our last house, so we are comfortable we can afford it.

I totally agree. What do people need so much money to spend on? Our combined gross income is only $150000; we purchased a house for $800000 5 years ago which is paid off now. We sold our previous house and put a downpayment of $650000. We have 1 child that goes to public school. We are careful with money and don't spend it on frivolous things like going to Starbucks, nail salons etc.

Clearly, the reason you were able to pay off an 800K house in 5 years was not because of your 150K salary so I fail to see how the OP can learn anything from your situation, except that maybe they should have had a much larger downpayment to afford the house they purchased.