$410k house with DH salary stretching ourselves too thin?

[Anonymous]

We found a house we love but my gut says we can't afford it. My DH makes $84k plus bonus (usually 10%) and I SAH. We have 20% for down payment but would have just $10k left in savings. We have tiny amount of student loan debt and no other debt.

My gut says it's too much of a stretch but the numbers say it's do-able.

What do you think?

[Anonymous]

Could you rent out a room in the house, to help cover the mortgages. I know quite a few people who do this.

[Anonymous]

Anonymous wrote:We found a house we love but my gut says we can't afford it. My DH makes $84k plus bonus (usually 10%) and I SAH. We have 20% for down payment but would have just $10k left in savings. We have tiny amount of student loan debt and no other debt.

My gut says it's too much of a stretch but the numbers say it's do-able.

What do you think?

What's your future HHI income potential?

How many kids? How old? Are you done having kids?

What do you pay in rent now? How is that working out/how does it compare?

Are you willing to go back to work to pick up the slack if needed or go back to work eventually?

My hunch is it would be tight for a while but things would get better as your income increases and housing payments stay stable.

[Anonymous]

it matters more what your gut says. you have to feel comfortable with it. if you don't feel that 10k in savings is enough or your mortgage is too high, then it's not the right choice.

as for going back to work to increase your HHI, don't forget then you have to factor in daycare, which is a pretty penny around here.

[Anonymous]

Anonymous wrote:it matters more what your gut says. you have to feel comfortable with it. if you don't feel that 10k in savings is enough or your mortgage is too high, then it's not the right choice.

as for going back to work to increase your HHI, don't forget then you have to factor in daycare, which is a pretty penny around here.

She is a SAHM.

[Anonymous]

3x salary is the basic rule of thumb fpu the amount of house you can afford. IMO, you don't earn enough, and you don't have enough saved. You should factor in the annual cost of maintenance, insurnce, taxes, ec. What of your car breaks down? What about a new roof? broken washer or dryer? These expenses pop up regularly hen pwning ahome, and your 10K will not go very far. How much will you have left after closing costs?

You should have 3-6 months of living expenses saved. Are both you and DH also saving enough for retirement?

[Anonymous]

Anonymous wrote:

Anonymous wrote:it matters more what your gut says. you have to feel comfortable with it. if you don't feel that 10k in savings is enough or your mortgage is too high, then it's not the right choice.

as for going back to work to increase your HHI, don't forget then you have to factor in daycare, which is a pretty penny around here.

She is a SAHM.

I know. Read the thread. This was in response to a PP who suggested returning back to work to pick up the slack.

[Anonymous]

We bought our first house at around that same price with a similar income and it was fine. However, there were a couple months when felt a bit stressed until our incomes went up. But I would totally do it again...it just meant that we had to budget a bit and watch our spending. Is your DH's job stable? Is there a potential for salary increase anytime soon? Since you are a SAHM I think a good rule is to have 4-6 month expenses in reserve.

[Anonymous]

We bought a $450k house with double the income and substantially more savings - but we did it based on calculations that we could pay the mortgage and continue to save on only one income. I was pregnant and knew I wanted to take a long leave, and my husband is incredibly conservative and wouldn't take on a mortgage beyond what we could afford in our worst nightmare. And it was doable - I stayed home for a year and my husband's $85k salary covered all the bills. Long term, it would have been really really hard if I hadn't gone back to work - what happens when the central air system dies in July? What about when you realize the roof needs replacing, or your second child needs private therapy, or your parents are sick and you need to fly across the country once a month for an indefinite period of time? (All this has happened to us, by the way.) Go with your gut, especially if you have no plans to go back to work. I've never regretted buying a smaller older house because I know that we can afford our lives even if one of us is out of work for an extended period of time.

[Anonymous]

Use your savings to pay off student loan debt and put aside 6 months of expenses in an emergency fund. Once you have rebuilt your 20% downpayment, thinking about buying.

[Anonymous]

We bought a smaller, older house for $300k with an HHI of approx $250k because we wanted to be able to live really well. We've been able to update to suit our family's needs and we know that we will be able to cover our very modest mortgage payment and continue to save and live decently on only DH's income ($175k) when I take some time off to stay home with children.

How much will your monthly mortgage payment be on that dream house?

[Anonymous]

Too much. We make $150 combined and can barely afford a $400K house.

[Anonymous]

We bought a $410k house with an income of $200k+. Your numbers kind of sound tight but ofcourse there are a number of factors that you should consider. 21:55's questions are very good. We have daycare costs and we like to travel a lot. So consider what you want in your life apart from a good house. Write it all down on a paper and rank them as your family prefers. We are happy to live in a less than stellar home but be able to travel. The same goes for whatever your family wants. Also do not under estimate the amount of money the house eats up after you move into it and on top of the mortgage payments.

As people often say, life is not about all material things but it feels good to take a trip or buy that one new shirt without worrying if that is going to cut into the grocery bill.

Good luck with your decision.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We found a house we love but my gut says we can't afford it. My DH makes $84k plus bonus (usually 10%) and I SAH. We have 20% for down payment but would have just $10k left in savings. We have tiny amount of student loan debt and no other debt.

My gut says it's too much of a stretch but the numbers say it's do-able.

What do you think?

What's your future HHI income potential?

How many kids? How old? Are you done having kids?

What do you pay in rent now? How is that working out/how does it compare?

Are you willing to go back to work to pick up the slack if needed or go back to work eventually?

My hunch is it would be tight for a while but things would get better as your income increases and housing payments stay stable.

This.
We did it- our income has increased 35% in two years. You'll be fine.

[Anonymous]

Don't forget that others who bought years ago at your income/home price were paying higher interest rates. Today's rates are in your favor.

However, I personally wouldn't make that purchase. Too risky for me.