What HHI to feel comfortable with a family in a close-in city like Bethesda/Arlington/McLean?

[Anonymous]

$500k and public schools

[Anonymous]

Anonymous wrote:This basically boils down to how much income to afford at least a 1.3 million dollar house (with a million-ish dollar mortgage). Assuming this translates to roughly $8,000 monthly payment (with escrows) then you could do it on 300K a year, but many would prefer not to. Maybe 350-400K is more reasonable.

Sorry, but $1.3m is on the ow end in those neighborhoods. The majority of your kids’ school friends will live in houses worth much more. The “poor kids” live in the $1.3 and under houses.

[Anonymous]

The reality is housing rates make it much more challenging now. My wife and I bought two years ago at $1.1 million with 10% down at 6.85% and our PITI is ~$7500. At 2% that same payment would be $3000 a month less.

[Anonymous]

We have done fine with <$250k.

[Anonymous]

Depends how much you put down. In Potomac and Bethesda a realtor said average downpayment is 40 percent. Makes sense who can afford the mortgage otherwise.

I work at a bank and we have a few Piggyback customers lately. The do a 30 years fixed mortgage combined with an adjustable ARM at same time. Theory is they are dual income they aggressively pay off ARM prior to adjustment then wife when kids come if wants to be SAHM or one loses job they are comfortable as only the smaller 30 year fixed is left.

For instance buy a 1.5 million dollars home. Get a 30 year mortgage of 800K, get a ARM of 400K and put down 300K. Then couple starts with low interest rate 10/1 year Teaser ARM starts prepaying that aggressively while dual income. By year 10 ARM done, by then second or third kid on way, working may not make sense for Mom and she goes part time or SAHM. The neighbors all wonder how she can afford it, but reality they just worked their butts off. Or could be husband loses job and he could be stay at home. Or both lose jobs down the road in a recession The first few years are risky. But taking a large 30 years mortgage is also very risky if you lose your job as it is high all 30 years.

It is no longer 2000 or 2018 where home prices only go up and mortgage rates only go down. We could get more mortgage rates up and home prices up.

[Anonymous]

Anonymous wrote:We have done fine with <$250k.

Fine and Comfortable are two different things

Comfortable is having a 4k sq foot house, with a decent yard, decent cars, substantial annual savings, no financial stress, can cash flow any urgent need without thinking, etc

Fine is living an acceptable house, old cars, maxing 401(k)s but that's really it, but still having to worry about money or contemplate bigger purchases

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have done fine with <$250k.

Fine and Comfortable are two different things

Comfortable is having a 4k sq foot house, with a decent yard, decent cars, substantial annual savings, no financial stress, can cash flow any urgent need without thinking, etc

Fine is living an acceptable house, old cars, maxing 401(k)s but that's really it, but still having to worry about money or contemplate bigger purchases

I find it very comfortable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Bought in 2022, in Rockville at age 28. Hhi of 390k. We’re comfortable but if we had bought in Bethesda, we would have been tight. But part of my budget is aggressively saving for an early retirement at 45 so that affects what we’re willing to spend

I think Bethesda is doable on 350k-400k but depends on your spending habits and goals

Rockville lol. This thread isn’t for you.

What’s your problem, buddy? My comment literally said that 390k would be a good HHI to comfortably buy in Bethesda, depending on the family’s goals.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have done fine with <$250k.

Fine and Comfortable are two different things

Comfortable is having a 4k sq foot house, with a decent yard, decent cars, substantial annual savings, no financial stress, can cash flow any urgent need without thinking, etc

Fine is living an acceptable house, old cars, maxing 401(k)s but that's really it, but still having to worry about money or contemplate bigger purchases

This is an insane size. Our CCMD house is only 2250 Sq feet for a family of 4 and it's great. I don't I could find much bigger within a 5 minute walk to metro, groceries, restaurants and schools. Also I don't need it bigger!

[Anonymous]

Depends. If you bought when rates were low, $350k is ok. No private school through. To buy now, you need $500k for the same house.

[Anonymous]

We are good at $350k for family of five. We have no mortgage, which helps. We also don’t out source a lot—no regular cleaning person for us, and we cook most meals (minimal takeout).

[Anonymous]

Depends on your kids! Hahaha. Age, ability to manage public v Pvt school environment, hobbies and activities aka sports and how many kids you have/ages.
.
Seriously. If it were just DH and I, HHI $300k is more than a happy life. With our 2 teens in Pvt and learning disabilities, $350k just gets us by.

With kids you really have to look at the money you need for daycare and holidays, activities and as they get older, a car and insurance, clothing, groceries, summer camps. It's a never ending list.

[Anonymous]

Anonymous wrote:It really depends on housing. I know many dual fed couples in Arlington, but they bought a while ago.

I also know families in apartments or condos, but many wouldn't be okay with that and want a SFH. Those family love being walkable and the community that comes with shared spaces like the local playground.

Where in Arlington do you know two Fed families? Everyone around us is law and tech. Are they in their 60s? Or are you talking SA, as that was cheaper more recently…

[Anonymous]

I’m going to echo that $350 is about right to be comfortable. But I have a high standard of living in most areas. My compromise is living on a busy street, driving cars into the ground, and catholic parochial school because of COVID teacher shortages. We have also had a few significant advantages, such as taking loans from parents and help with their 529’s. I also absolutely worked my tail off for a decade and a half to get to a good salary and pay off $100k in student loans for my spouse and I. I also saw the writing on the wall on interest rates and had us trade up the size of our house. I would say we have a good lifestyle now but it wasn’t comfortable until we paid off loans, had an emergency fund, and felt established in our careers. I’m hoping at 40 yo now I can keep working for 2-3 more years and switch to a lower paying job that’s more suited to raising kids. Don’t feel comfortable dropping down to the $170-200 range here in Bethesda.

[Anonymous]

Anonymous wrote:Depends how much you put down. In Potomac and Bethesda a realtor said average downpayment is 40 percent. Makes sense who can afford the mortgage otherwise.

I work at a bank and we have a few Piggyback customers lately. The do a 30 years fixed mortgage combined with an adjustable ARM at same time. Theory is they are dual income they aggressively pay off ARM prior to adjustment then wife when kids come if wants to be SAHM or one loses job they are comfortable as only the smaller 30 year fixed is left.

For instance buy a 1.5 million dollars home. Get a 30 year mortgage of 800K, get a ARM of 400K and put down 300K. Then couple starts with low interest rate 10/1 year Teaser ARM starts prepaying that aggressively while dual income. By year 10 ARM done, by then second or third kid on way, working may not make sense for Mom and she goes part time or SAHM. The neighbors all wonder how she can afford it, but reality they just worked their butts off. Or could be husband loses job and he could be stay at home. Or both lose jobs down the road in a recession The first few years are risky. But taking a large 30 years mortgage is also very risky if you lose your job as it is high all 30 years.

It is no longer 2000 or 2018 where home prices only go up and mortgage rates only go down. We could get more mortgage rates up and home prices up.

Never heard of this, really interesting and fits our personal situation too - who offers this?