If you bought a house over $1.5 were you able to afford to do so on your salaries or equity?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Wow, I had no clue that my competition included people making $400K-$600K. Figured those people would easily be looking in the $2-$2.5 million range.

Um what!!?

400k and a 2.5M house. Do you know what a 400k income shakes out too? I wouldn’t touch event a 1.3M house with 400k. House poor

ITA. Do you people pay taxes? After maxing out my TSP and paying for benefits, I'm coming home with a little more than half gross.

[Anonymous]

1.5 isn’t their first house. I have a 1mill house on 260k income. We made 460k on our last house sale and rolled that plus our equity into our current home. We only have a 250k mortgage. I believe we could have done 1.5 but we’re in the suburbs in our dream home.

And before anyone asks, we bought a foreclosure in 2008. Got super lucky

[Anonymous]

I think the differences in this thread just show how differently people spend money. The idea that a combined income of $400K can't afford a $1.3 million home is strange, unless the couple is fresh out of college/grad school. It's just about priorities -- if you don't save and invest, and instead take 5-star vacations, pay private school tuition, eat out at high end restaurants often, buy designer clothes, upgrade cars every few years, then it doesn't seem doable. Those are choices, though. Many people make different choices -- they're not eating PB&J all the time, but they're just leading more modest lifestyles. And yes, on a $400K combined income, with modest lifestyle choices, it is not difficult to buy more than a $1.3 million house.

[Anonymous]

Anonymous wrote:I think the differences in this thread just show how differently people spend money. The idea that a combined income of $400K can't afford a $1.3 million home is strange, unless the couple is fresh out of college/grad school. It's just about priorities -- if you don't save and invest, and instead take 5-star vacations, pay private school tuition, eat out at high end restaurants often, buy designer clothes, upgrade cars every few years, then it doesn't seem doable. Those are choices, though. Many people make different choices -- they're not eating PB&J all the time, but they're just leading more modest lifestyles. And yes, on a $400K combined income, with modest lifestyle choices, it is not difficult to buy more than a $1.3 million house.

Fair point. We are 31 and 29 and make about 580k combined. I’m stressing about a 1.5M house because we had to save for the entire down payment (20%) with no family help. We have other assets, and a home with decent equity, but it just “feels” like we are being dumb or too spendy.

If I was 50 and have made my income for 20 years, you bet I wouldn’t stress about a 1.5M house because our liquid assets would be many millions at the rate we’re going.

Currently, we are stressing about buying a 1.4-1.5M house in Chevy chase. Should we be? Probably not? Are we ridiculously anxious, yes. If we had $5M liquid I wouldn’t think twice about buying the home

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$1.5m with 20% down at 3.5% interest should be under $7k/month, or $84k/year. Even at $300k HHI that's still less than 1/3 of your gross income. Understandable if that still makes you uncomfortable but you're competing against a lot of buyers who will stretch themselves much further to make things work.

That mortgage is an insane amount. We make around 500K, I'm a fed, and we couldn't pull 7K/month without huge sacrifices. We wouldn't be able to save a lot, travel, afford cleaning services and quality food, pay for the kids' tuition etc.

We're at $400K (salaries + bonus) and NO WAY in hell would we ever feel comfortable buying at $1.5M house. We purchased in 2020, house was $1.21M, mortgage + taxes and insurance = $5100 a month. We max out our 401K, we barely travel - vacation every 2 years, kids are in public.

$1.5M at $300K is insanity. You would be eating PBJ for the rest of your life.

I'm not trying to be snarky, I'm genuinely interested in your expenses.
$400K gross
- $20K 401k contribution (savings)
- $80K taxes
- $61K housing
= $239K take home pay

What do you spend that on? Also, the difference of $1.2M vs $1.5M house is $20K/year more.
If $20K is stretching your budget and what causes you to go on a PBJ diet, than you really should look somewhere else as the source of expenses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$1.5m with 20% down at 3.5% interest should be under $7k/month, or $84k/year. Even at $300k HHI that's still less than 1/3 of your gross income. Understandable if that still makes you uncomfortable but you're competing against a lot of buyers who will stretch themselves much further to make things work.

That mortgage is an insane amount. We make around 500K, I'm a fed, and we couldn't pull 7K/month without huge sacrifices. We wouldn't be able to save a lot, travel, afford cleaning services and quality food, pay for the kids' tuition etc.

We're at $400K (salaries + bonus) and NO WAY in hell would we ever feel comfortable buying at $1.5M house. We purchased in 2020, house was $1.21M, mortgage + taxes and insurance = $5100 a month. We max out our 401K, we barely travel - vacation every 2 years, kids are in public.

$1.5M at $300K is insanity. You would be eating PBJ for the rest of your life.

I'm not trying to be snarky, I'm genuinely interested in your expenses.
$400K gross
- $20K 401k contribution (savings)
- $80K taxes
- $61K housing
= $239K take home pay

What do you spend that on? Also, the difference of $1.2M vs $1.5M house is $20K/year more.
If $20K is stretching your budget and what causes you to go on a PBJ diet, than you really should look somewhere else as the source of expenses.

Since you're digging I'll tell you. DS has special needs - so a ton of our money goes to tutors and therapy. does that make more sense now? Also we do catch up contributions for our 401K so itsm $27K. But even without our DS's needs I would never squeeze into a $1.5M house at our income. Nor should anyone else. But that's not my problem.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$1.5m with 20% down at 3.5% interest should be under $7k/month, or $84k/year. Even at $300k HHI that's still less than 1/3 of your gross income. Understandable if that still makes you uncomfortable but you're competing against a lot of buyers who will stretch themselves much further to make things work.

That mortgage is an insane amount. We make around 500K, I'm a fed, and we couldn't pull 7K/month without huge sacrifices. We wouldn't be able to save a lot, travel, afford cleaning services and quality food, pay for the kids' tuition etc.

We're at $400K (salaries + bonus) and NO WAY in hell would we ever feel comfortable buying at $1.5M house. We purchased in 2020, house was $1.21M, mortgage + taxes and insurance = $5100 a month. We max out our 401K, we barely travel - vacation every 2 years, kids are in public.

$1.5M at $300K is insanity. You would be eating PBJ for the rest of your life.

I'm not trying to be snarky, I'm genuinely interested in your expenses.
$400K gross
- $20K 401k contribution (savings)
- $80K taxes
- $61K housing
= $239K take home pay

What do you spend that on? Also, the difference of $1.2M vs $1.5M house is $20K/year more.
If $20K is stretching your budget and what causes you to go on a PBJ diet, than you really should look somewhere else as the source of expenses.

Why is only one person contributing to the 401k? They also have to pay for health care and all the random life crap that comes up and probably like to save every month. Kids go to college eventually. Seems reasonable to me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$1.5m with 20% down at 3.5% interest should be under $7k/month, or $84k/year. Even at $300k HHI that's still less than 1/3 of your gross income. Understandable if that still makes you uncomfortable but you're competing against a lot of buyers who will stretch themselves much further to make things work.

That mortgage is an insane amount. We make around 500K, I'm a fed, and we couldn't pull 7K/month without huge sacrifices. We wouldn't be able to save a lot, travel, afford cleaning services and quality food, pay for the kids' tuition etc.

We're at $400K (salaries + bonus) and NO WAY in hell would we ever feel comfortable buying at $1.5M house. We purchased in 2020, house was $1.21M, mortgage + taxes and insurance = $5100 a month. We max out our 401K, we barely travel - vacation every 2 years, kids are in public.

$1.5M at $300K is insanity. You would be eating PBJ for the rest of your life.

I'm not trying to be snarky, I'm genuinely interested in your expenses.
$400K gross
- $20K 401k contribution (savings)
- $80K taxes
- $61K housing
= $239K take home pay

What do you spend that on? Also, the difference of $1.2M vs $1.5M house is $20K/year more.
If $20K is stretching your budget and what causes you to go on a PBJ diet, than you really should look somewhere else as the source of expenses.

Why is only one person contributing to the 401k? They also have to pay for health care and all the random life crap that comes up and probably like to save every month. Kids go to college eventually. Seems reasonable to me.

First PP here- that is correct, thank you for pointing that out. I should have added that we're both contributing. One is catch up, one is not. I don't like to live on a shoestring budget how people don't get this is beyond me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$1.5m with 20% down at 3.5% interest should be under $7k/month, or $84k/year. Even at $300k HHI that's still less than 1/3 of your gross income. Understandable if that still makes you uncomfortable but you're competing against a lot of buyers who will stretch themselves much further to make things work.

That mortgage is an insane amount. We make around 500K, I'm a fed, and we couldn't pull 7K/month without huge sacrifices. We wouldn't be able to save a lot, travel, afford cleaning services and quality food, pay for the kids' tuition etc.

We're at $400K (salaries + bonus) and NO WAY in hell would we ever feel comfortable buying at $1.5M house. We purchased in 2020, house was $1.21M, mortgage + taxes and insurance = $5100 a month. We max out our 401K, we barely travel - vacation every 2 years, kids are in public.

$1.5M at $300K is insanity. You would be eating PBJ for the rest of your life.

I'm not trying to be snarky, I'm genuinely interested in your expenses.
$400K gross
- $20K 401k contribution (savings)
- $80K taxes
- $61K housing
= $239K take home pay

What do you spend that on? Also, the difference of $1.2M vs $1.5M house is $20K/year more.
If $20K is stretching your budget and what causes you to go on a PBJ diet, than you really should look somewhere else as the source of expenses.

Since you're digging I'll tell you. DS has special needs - so a ton of our money goes to tutors and therapy. does that make more sense now? Also we do catch up contributions for our 401K so itsm $27K. But even without our DS's needs I would never squeeze into a $1.5M house at our income. Nor should anyone else. But that's not my problem.

Cool, but don't assume other people have your expenses.
Everybody's financial situation is different. So $400k for you might not be enough, for plenty of people is plenty.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have 1.2M on 300K and it's perfectly comfortable. Could we retire earlier with a smaller mortgage? Sure, but we don't want to be totally cramped and miserable in our home.

Do you think everyone who owns a home less than $1.2M is totally cramped and miserable?

That’s what I thought too lol I guess my 700k house must be a shack.

+1 or a tremendous bargain!

[Anonymous]

We have a gross HHI of $565k with another $100k in bonuses and are considering a $3 mil house. We have elderly parents that need to live with us and it’s hard to find a place that accommodates their needs. We have $500k+ equity in our current home and plan to stick that in a brokerage and create a sort of endowment for the house. Makes me nervous but husband has persuaded me that we can swing it.

[Anonymous]

I think your salary range is perfectly doable for 1.5mil. We bought in 2019 in McLean for 1.3mil on 425k HHI, down payment was 350k, it has been easily manageable. Our kids go to public, so there’s that. Our house has appreciated to almost 1.6mil and our income is now 600-750k and we are on a 15 yr mortgage.

I think you should go for it, in close in areas it’s not like you are going to have trouble selling the house, in case you are not comfortable.

[Anonymous]

I'll throw in my own data point. Spouse and I make 210K combined. Bought townhouse 13 years ago in silver spring that turned out to be terrible from an investment standpoint; we maybe will get $100K profit after commissions. But we save aggressively and have no kids. We are looking to spend $1.3 million max on a house, and will do a down payment up to 50% to make it work. We don't like that we have to spend that much, but we despise commuting, and we want a place that we will enjoy. Unfortunately, our incomes are unlikely to grow significantly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think the differences in this thread just show how differently people spend money. The idea that a combined income of $400K can't afford a $1.3 million home is strange, unless the couple is fresh out of college/grad school. It's just about priorities -- if you don't save and invest, and instead take 5-star vacations, pay private school tuition, eat out at high end restaurants often, buy designer clothes, upgrade cars every few years, then it doesn't seem doable. Those are choices, though. Many people make different choices -- they're not eating PB&J all the time, but they're just leading more modest lifestyles. And yes, on a $400K combined income, with modest lifestyle choices, it is not difficult to buy more than a $1.3 million house.

Fair point. We are 31 and 29 and make about 580k combined. I’m stressing about a 1.5M house because we had to save for the entire down payment (20%) with no family help. We have other assets, and a home with decent equity, but it just “feels” like we are being dumb or too spendy.

If I was 50 and have made my income for 20 years, you bet I wouldn’t stress about a 1.5M house because our liquid assets would be many millions at the rate we’re going.

Currently, we are stressing about buying a 1.4-1.5M house in Chevy chase. Should we be? Probably not? Are we ridiculously anxious, yes. If we had $5M liquid I wouldn’t think twice about buying the home

You'll be fine. If you're law firm associates (or have some equally stressful jobs), I get how that 580K income might not seem very secure. But at the end of the day, you're doing well, and even if you both take less stressful jobs, you should still be able to easily afford the 1.5 million house. Buying a house is not being dumb or spendy; it's actually very responsible. By contrast, all the stupid stuff that people buy is being dumb and spendy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think the differences in this thread just show how differently people spend money. The idea that a combined income of $400K can't afford a $1.3 million home is strange, unless the couple is fresh out of college/grad school. It's just about priorities -- if you don't save and invest, and instead take 5-star vacations, pay private school tuition, eat out at high end restaurants often, buy designer clothes, upgrade cars every few years, then it doesn't seem doable. Those are choices, though. Many people make different choices -- they're not eating PB&J all the time, but they're just leading more modest lifestyles. And yes, on a $400K combined income, with modest lifestyle choices, it is not difficult to buy more than a $1.3 million house.

Fair point. We are 31 and 29 and make about 580k combined. I’m stressing about a 1.5M house because we had to save for the entire down payment (20%) with no family help. We have other assets, and a home with decent equity, but it just “feels” like we are being dumb or too spendy.

If I was 50 and have made my income for 20 years, you bet I wouldn’t stress about a 1.5M house because our liquid assets would be many millions at the rate we’re going.

Currently, we are stressing about buying a 1.4-1.5M house in Chevy chase. Should we be? Probably not? Are we ridiculously anxious, yes. If we had $5M liquid I wouldn’t think twice about buying the home

You'll be fine. If you're law firm associates (or have some equally stressful jobs), I get how that 580K income might not seem very secure. But at the end of the day, you're doing well, and even if you both take less stressful jobs, you should still be able to easily afford the 1.5 million house. Buying a house is not being dumb or spendy; it's actually very responsible. By contrast, all the stupid stuff that people buy is being dumb and spendy.

Sure, like therapy for their special needs child or college tuition.