Afford $1.8M on 300K?
![[Post New]](/jforum/templates/default/images/icon_minipost_new.gif){kind=icon}
Anonymous
...or $1.3M if the rates keep climbing... |
Anonymous
|
OP here - you are right - $9K would eliminate our positive savings cash flow. Certainly we could reduce it to $8K and have $1K monthly positive savings cash flow. We have enough savings and equity in our current house to put 20% down on a new house (so $300-$400K). And accumulate about $90K in cash savings each year. I don't know why we would put more than 20% - though - PMI is done for, and I don't see why getting a smaller mortgage just for the sake of having a small mortgage is better (besides the positive cash flow issue). Waiting as year to reduce the principal by $90K doesn't make sense to me if I am able to borrow at <5% (and possibly refinance if the rate drops below 3%). Suppose I had $2M in cash. I don't think I would buy the house in all cash (and have a $0 PITI). I think the right (income maximizing) thing to do is put pay exactly $400K down on a house (to eliminate PMI) and do something else with the remaining $1.6M that garners returns greater than my expected borrowing rate. or am I being financially illiterate here? You are not being financially illiterate if you can earn a return greater than your borrowing rate. But some people (including myself) would prefer the security of having a house paid off vs. maximizing financial returns. Also I’m confused why you have only been dumping your savings in 1% accounts. Why have you not been investing some of that in non-retirement stocks? |
Anonymous
Anonymous
| You can afford it and I think a lot of people are in similar situations to get the housing they want. You don’t need dcum to approve. |
Anonymous
Same here! I think she’s missing a ton of regular expenses- where’s the line item for health insurance, life insurance, camps, sports, vacations, clothes, date nights, car repairs, home repairs, furniture/home stuff, etc? We make $290K and after maxing 401k, TSP, FSA, dependent care FSA and all our taxes and insurance deductions, we bring home around $11k/mo. Our housing expenses are $3000 and only recently have I felt like we have disposable money to buy a new car. |
Anonymous
Same. Nice to see these normals posts for a change. |
Anonymous
| OP is nuts and doesn’t listen. Why bother posting? |
Anonymous
also, don’t forget hair appointments. Highlights, blow outs, hair cuts, manicures, pedicures, parking costs at work, transportation costs, childcare, even with a decent paycheck, there’s not much left… |
Anonymous
Yup I’m the $290k pP- this income is new for us but the Mortgage is not, and I finally feel like we have enough to pay landscapers, potentially not drive a 10-15 year old car, take $10k vacation, send my kid to sleep away camp, buy new shoes! We Both max our retirement accounts, and save $1000/mo to an index fund. And we only have 1 kid! If we had 2 kids I would feel a little stretched and/or have to pull back on the fun stuff. |
Anonymous
| we have a 300k HHI and i have no idea how I would put 9k in the bank each month. Are you contributing nothing to retirement?? |
Anonymous
| are we STILL talking about this ridiculous scenario? come on.... |
Anonymous
But OP wants 4,000 sq. ft. and 3-4 bedrooms + 4 offices. OP, I really think you need to talk to a financial adviser. I'm married to one (not shilling, I promise) and he has a CFP designation and an MBA. I don't understand all the financial stuff, but luckily, I don't have to. I do know, however, that a 4,000 sq. ft., $1.8 million house is totally unrealistic on a $300k HHI. Also, your kids are in late elementary, and these next few years are going to go fast. And then you'll have kids in college and beyond. What are you going to do with all those empty offices? One idea is to rent an office in a coworking building ... it would surely be cheaper in both the short term and long term, as well as a better use of space. I'm positive you can afford a somewhat more expensive house, or a nice addition, but you should not forego saving entirely just to live in a home that would be considered very large even in less expensive areas. And you really need to be investing beyond the 1% interest account. If you want to invest in real estate, invest in some rental properties, not your primary residence. Your primary residence should not be viewed as your primary investment. |