7K Mortgage on a HHI of 500k

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you earn $500k I don't think you need to be getting financial advice from an anonymous message board.

That said, how are you getting a $7k mortgage payment on a $1.2 home (unless you're including taxes and insurance)? That's just not possible if you're paying 20% down. If you haven't saved enough for a 20% down payment on your HHI then I'm skeptical you should be making such a large financial commitment.

We are putting down 115k or so as we also just paid for a wedding and our honeymoon costs.

Then you're crazy for wanting to buy now. You're looking at total monthly payments of $8-8500. With that income and no kids you can easily live frugally for a couple years and be in a much better position to buy, no matter what happens with prices and interest rates.

This. What’s the rush?

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you earn $500k I don't think you need to be getting financial advice from an anonymous message board.

That said, how are you getting a $7k mortgage payment on a $1.2 home (unless you're including taxes and insurance)? That's just not possible if you're paying 20% down. If you haven't saved enough for a 20% down payment on your HHI then I'm skeptical you should be making such a large financial commitment.

We are putting down 115k or so as we also just paid for a wedding and our honeymoon costs.

OP, you are looking for justification of a bad financial decision from strangers. You make $500K a year and do not have enough for a 20% down payment because you just spend money (probably and obscene amount) on a wedding and honeymoon. Now you will borrow more mortgage at the current higher rates and blow money on PMI. Save up the 20% then buy. You do not need a 7k/month yoke around your neck to keep up with your social circle.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn’t be buying anything right now! Only reason I’d buy would be if I had to relocate for a job. I’d wait this one out.

So what do you recommend people do? Wait for a “crash” that may never happen? Same mindset of not investing money. Who cares if the price declines in the short term, you’ll never time it right, so just buy and play the long game.

I bought in 2006 and wish that I hadn't. It really damaged me financially at a young age. Sitting it out is actually wise advice.

I say that as someone who is currently under contract to buy a house. I was able to sell my house at a high price, relocated for work, and am making a large down-payment for our current house. One hand is essentially washing the other since I profited from the market. That isn't the case for a first time home buyer.

OP, I think when you're starting out, it's normal be stretched with your mortgage, and you grow into it. But if you're nervous, it's okay to live under your means. We have a HHI of 900k, but our new house has a mortgage of $6k/month. That puts us in the upper range for the area that we moved to and makes sense, since we don't want to be in a house on a hill away from the community we moved into. But 1.2M doesn't go far in DC so you may need to be comfortable with a hefty payment. There is no one answer to what you should have as a mortgage at higher incomes.

How did it damage you? Did you sell at a poor time? If you were close in DC 2005-2006 was not a huge deal for real estate prices...relative to tertiary markets.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn’t be buying anything right now! Only reason I’d buy would be if I had to relocate for a job. I’d wait this one out.

So what do you recommend people do? Wait for a “crash” that may never happen? Same mindset of not investing money. Who cares if the price declines in the short term, you’ll never time it right, so just buy and play the long game.

I bought in 2006 and wish that I hadn't. It really damaged me financially at a young age. Sitting it out is actually wise advice.

I say that as someone who is currently under contract to buy a house. I was able to sell my house at a high price, relocated for work, and am making a large down-payment for our current house. One hand is essentially washing the other since I profited from the market. That isn't the case for a first time home buyer.

OP, I think when you're starting out, it's normal be stretched with your mortgage, and you grow into it. But if you're nervous, it's okay to live under your means. We have a HHI of 900k, but our new house has a mortgage of $6k/month. That puts us in the upper range for the area that we moved to and makes sense, since we don't want to be in a house on a hill away from the community we moved into. But 1.2M doesn't go far in DC so you may need to be comfortable with a hefty payment. There is no one answer to what you should have as a mortgage at higher incomes.

How did it damage you? Did you sell at a poor time? If you were close in DC 2005-2006 was not a huge deal for real estate prices...relative to tertiary markets.

DP. No one knows what the future holds, including for the DC market. But it seems unwise to rush to buy a home during such a hot housing market with less than 20% down and a large mortgage. Why the rush?

[Anonymous]

Anonymous wrote:Our HHI is $460K (includes bonus), there is absolutely no way in hell we would want to do a $7K mortgage, even though I'm sure we would qualify. We max out our 401K, we have one kid out of college and one at community college. No really big expenses besides one car payment. Our mortgage is around $5K (includes taxes and insurance).

Life is expensive and it's only getting more and more expensive. The thought of that $7K albatross around my neck for the next 30 years....no thank you.

What do you spend your money on that 2k a month is going to derail your life; particularly at your age? With a nearly 500k HHI and only a 5K PITI, even after maxing both 401ks you should have more than enough money to save, live and spend more on housing.

You are on the tail end of parenting, your costs should dramatically decrease..

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn’t be buying anything right now! Only reason I’d buy would be if I had to relocate for a job. I’d wait this one out.

So what do you recommend people do? Wait for a “crash” that may never happen? Same mindset of not investing money. Who cares if the price declines in the short term, you’ll never time it right, so just buy and play the long game.

I bought in 2006 and wish that I hadn't. It really damaged me financially at a young age. Sitting it out is actually wise advice.

I say that as someone who is currently under contract to buy a house. I was able to sell my house at a high price, relocated for work, and am making a large down-payment for our current house. One hand is essentially washing the other since I profited from the market. That isn't the case for a first time home buyer.

OP, I think when you're starting out, it's normal be stretched with your mortgage, and you grow into it. But if you're nervous, it's okay to live under your means. We have a HHI of 900k, but our new house has a mortgage of $6k/month. That puts us in the upper range for the area that we moved to and makes sense, since we don't want to be in a house on a hill away from the community we moved into. But 1.2M doesn't go far in DC so you may need to be comfortable with a hefty payment. There is no one answer to what you should have as a mortgage at higher incomes.

How did it damage you? Did you sell at a poor time? If you were close in DC 2005-2006 was not a huge deal for real estate prices...relative to tertiary markets.

DP. No one knows what the future holds, including for the DC market. But it seems unwise to rush to buy a home during such a hot housing market with less than 20% down and a large mortgage. Why the rush?

Repeat, If i buy a house for 1.55M and it declines to 1.4M (10% drop)..how does this impact my life? You should never buy a house you don't plan to live in for 7-10 years.

7-10 years from now, odds (which are very high) are good that the price will be higher, or the same. Homes you live in are not meant to be investments

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn’t be buying anything right now! Only reason I’d buy would be if I had to relocate for a job. I’d wait this one out.

So what do you recommend people do? Wait for a “crash” that may never happen? Same mindset of not investing money. Who cares if the price declines in the short term, you’ll never time it right, so just buy and play the long game.

I bought in 2006 and wish that I hadn't. It really damaged me financially at a young age. Sitting it out is actually wise advice.

I say that as someone who is currently under contract to buy a house. I was able to sell my house at a high price, relocated for work, and am making a large down-payment for our current house. One hand is essentially washing the other since I profited from the market. That isn't the case for a first time home buyer.

OP, I think when you're starting out, it's normal be stretched with your mortgage, and you grow into it. But if you're nervous, it's okay to live under your means. We have a HHI of 900k, but our new house has a mortgage of $6k/month. That puts us in the upper range for the area that we moved to and makes sense, since we don't want to be in a house on a hill away from the community we moved into. But 1.2M doesn't go far in DC so you may need to be comfortable with a hefty payment. There is no one answer to what you should have as a mortgage at higher incomes.

How did it damage you? Did you sell at a poor time? If you were close in DC 2005-2006 was not a huge deal for real estate prices...relative to tertiary markets.

DP. No one knows what the future holds, including for the DC market. But it seems unwise to rush to buy a home during such a hot housing market with less than 20% down and a large mortgage. Why the rush?

Repeat, If i buy a house for 1.55M and it declines to 1.4M (10% drop)..how does this impact my life? You should never buy a house you don't plan to live in for 7-10 years.

7-10 years from now, odds (which are very high) are good that the price will be higher, or the same. Homes you live in are not meant to be investments

More likely it would be 10% followed by little if any appreciation. You could be underwater for years. It’s easy to say you don’t care because you aren’t moving, but things happen. School districts change, crime increases, job relocation etc. Do you really want to be stuck with a house you have to write a check for to sell?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our HHI is $460K (includes bonus), there is absolutely no way in hell we would want to do a $7K mortgage, even though I'm sure we would qualify. We max out our 401K, we have one kid out of college and one at community college. No really big expenses besides one car payment. Our mortgage is around $5K (includes taxes and insurance).

Life is expensive and it's only getting more and more expensive. The thought of that $7K albatross around my neck for the next 30 years....no thank you.

What do you spend your money on that 2k a month is going to derail your life; particularly at your age? With a nearly 500k HHI and only a 5K PITI, even after maxing both 401ks you should have more than enough money to save, live and spend more on housing.

You are on the tail end of parenting, your costs should dramatically decrease..

Yeah, this is honestly confusing. You make $460k/year, have no major expenses aside from one car payment, and you can't afford $7k/month? What are you spending that money on?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn’t be buying anything right now! Only reason I’d buy would be if I had to relocate for a job. I’d wait this one out.

So what do you recommend people do? Wait for a “crash” that may never happen? Same mindset of not investing money. Who cares if the price declines in the short term, you’ll never time it right, so just buy and play the long game.

I bought in 2006 and wish that I hadn't. It really damaged me financially at a young age. Sitting it out is actually wise advice.

I say that as someone who is currently under contract to buy a house. I was able to sell my house at a high price, relocated for work, and am making a large down-payment for our current house. One hand is essentially washing the other since I profited from the market. That isn't the case for a first time home buyer.

OP, I think when you're starting out, it's normal be stretched with your mortgage, and you grow into it. But if you're nervous, it's okay to live under your means. We have a HHI of 900k, but our new house has a mortgage of $6k/month. That puts us in the upper range for the area that we moved to and makes sense, since we don't want to be in a house on a hill away from the community we moved into. But 1.2M doesn't go far in DC so you may need to be comfortable with a hefty payment. There is no one answer to what you should have as a mortgage at higher incomes.

How did it damage you? Did you sell at a poor time? If you were close in DC 2005-2006 was not a huge deal for real estate prices...relative to tertiary markets.

DP. No one knows what the future holds, including for the DC market. But it seems unwise to rush to buy a home during such a hot housing market with less than 20% down and a large mortgage. Why the rush?

Repeat, If i buy a house for 1.55M and it declines to 1.4M (10% drop)..how does this impact my life? You should never buy a house you don't plan to live in for 7-10 years.

7-10 years from now, odds (which are very high) are good that the price will be higher, or the same. Homes you live in are not meant to be investments

More likely it would be 10% followed by little if any appreciation. You could be underwater for years. It’s easy to say you don’t care because you aren’t moving, but things happen. School districts change, crime increases, job relocation etc. Do you really want to be stuck with a house you have to write a check for to sell?

But even people who bought at peak before the last crash had recovered 10 years out. And no one seems to think the coming correction will be that bad. People are so dramatic on here.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our HHI is $460K (includes bonus), there is absolutely no way in hell we would want to do a $7K mortgage, even though I'm sure we would qualify. We max out our 401K, we have one kid out of college and one at community college. No really big expenses besides one car payment. Our mortgage is around $5K (includes taxes and insurance).

Life is expensive and it's only getting more and more expensive. The thought of that $7K albatross around my neck for the next 30 years....no thank you.

What do you spend your money on that 2k a month is going to derail your life; particularly at your age? With a nearly 500k HHI and only a 5K PITI, even after maxing both 401ks you should have more than enough money to save, live and spend more on housing.

You are on the tail end of parenting, your costs should dramatically decrease..

Yeah, this is honestly confusing. You make $460k/year, have no major expenses aside from one car payment, and you can't afford $7k/month? What are you spending that money on?

They said they want kids. A nanny/daycare is easily 3-5k per month. Then there is preschool. The 460k may include bonuses. If their take home is around 20k, I can see how they want to at least give it some serious thought. If you’re UMC it’s easy to spend 7-8k a month on saving in 529s and childcare expenses.

[Anonymous]

Last poster is exactly correct, even if there is a housing dip it’s unlikely to last more than a few years.

That said, nobody knows if the dip is going to come in six months, one year, two years etc.

Just but when it makes sense for your situation and you can afford it. The end

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn’t be buying anything right now! Only reason I’d buy would be if I had to relocate for a job. I’d wait this one out.

So what do you recommend people do? Wait for a “crash” that may never happen? Same mindset of not investing money. Who cares if the price declines in the short term, you’ll never time it right, so just buy and play the long game.

I bought in 2006 and wish that I hadn't. It really damaged me financially at a young age. Sitting it out is actually wise advice.

I say that as someone who is currently under contract to buy a house. I was able to sell my house at a high price, relocated for work, and am making a large down-payment for our current house. One hand is essentially washing the other since I profited from the market. That isn't the case for a first time home buyer.

OP, I think when you're starting out, it's normal be stretched with your mortgage, and you grow into it. But if you're nervous, it's okay to live under your means. We have a HHI of 900k, but our new house has a mortgage of $6k/month. That puts us in the upper range for the area that we moved to and makes sense, since we don't want to be in a house on a hill away from the community we moved into. But 1.2M doesn't go far in DC so you may need to be comfortable with a hefty payment. There is no one answer to what you should have as a mortgage at higher incomes.

How did it damage you? Did you sell at a poor time? If you were close in DC 2005-2006 was not a huge deal for real estate prices...relative to tertiary markets.

DP. No one knows what the future holds, including for the DC market. But it seems unwise to rush to buy a home during such a hot housing market with less than 20% down and a large mortgage. Why the rush?

Repeat, If i buy a house for 1.55M and it declines to 1.4M (10% drop)..how does this impact my life? You should never buy a house you don't plan to live in for 7-10 years.

7-10 years from now, odds (which are very high) are good that the price will be higher, or the same. Homes you live in are not meant to be investments

More likely it would be 10% followed by little if any appreciation. You could be underwater for years. It’s easy to say you don’t care because you aren’t moving, but things happen. School districts change, crime increases, job relocation etc. Do you really want to be stuck with a house you have to write a check for to sell?

But even people who bought at peak before the last crash had recovered 10 years out. And no one seems to think the coming correction will be that bad. People are so dramatic on here.

Not everyone, no. In many locations it took more than a decade.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn’t be buying anything right now! Only reason I’d buy would be if I had to relocate for a job. I’d wait this one out.

So what do you recommend people do? Wait for a “crash” that may never happen? Same mindset of not investing money. Who cares if the price declines in the short term, you’ll never time it right, so just buy and play the long game.

I bought in 2006 and wish that I hadn't. It really damaged me financially at a young age. Sitting it out is actually wise advice.

I say that as someone who is currently under contract to buy a house. I was able to sell my house at a high price, relocated for work, and am making a large down-payment for our current house. One hand is essentially washing the other since I profited from the market. That isn't the case for a first time home buyer.

OP, I think when you're starting out, it's normal be stretched with your mortgage, and you grow into it. But if you're nervous, it's okay to live under your means. We have a HHI of 900k, but our new house has a mortgage of $6k/month. That puts us in the upper range for the area that we moved to and makes sense, since we don't want to be in a house on a hill away from the community we moved into. But 1.2M doesn't go far in DC so you may need to be comfortable with a hefty payment. There is no one answer to what you should have as a mortgage at higher incomes.

How did it damage you? Did you sell at a poor time? If you were close in DC 2005-2006 was not a huge deal for real estate prices...relative to tertiary markets.

DP. No one knows what the future holds, including for the DC market. But it seems unwise to rush to buy a home during such a hot housing market with less than 20% down and a large mortgage. Why the rush?

Repeat, If i buy a house for 1.55M and it declines to 1.4M (10% drop)..how does this impact my life? You should never buy a house you don't plan to live in for 7-10 years.

7-10 years from now, odds (which are very high) are good that the price will be higher, or the same. Homes you live in are not meant to be investments

More likely it would be 10% followed by little if any appreciation. You could be underwater for years. It’s easy to say you don’t care because you aren’t moving, but things happen. School districts change, crime increases, job relocation etc. Do you really want to be stuck with a house you have to write a check for to sell?

Your argument is "things happen." Odds are those "things" wont happen so why make an irrational decision based upon the fear that something MAY occur.

We also could get nuked by Russia but that won't stop people from living. When gas goes up do you avoid driving? Are you not buying food now? If your stock portfolio declines for 3 years are you going to run out and sell it all? Fear based financial decision making is the biggest obstacle to building wealth.

Focus 10, 20, 30yrs down the road..not 6 months.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn’t be buying anything right now! Only reason I’d buy would be if I had to relocate for a job. I’d wait this one out.

So what do you recommend people do? Wait for a “crash” that may never happen? Same mindset of not investing money. Who cares if the price declines in the short term, you’ll never time it right, so just buy and play the long game.

I bought in 2006 and wish that I hadn't. It really damaged me financially at a young age. Sitting it out is actually wise advice.

I say that as someone who is currently under contract to buy a house. I was able to sell my house at a high price, relocated for work, and am making a large down-payment for our current house. One hand is essentially washing the other since I profited from the market. That isn't the case for a first time home buyer.

OP, I think when you're starting out, it's normal be stretched with your mortgage, and you grow into it. But if you're nervous, it's okay to live under your means. We have a HHI of 900k, but our new house has a mortgage of $6k/month. That puts us in the upper range for the area that we moved to and makes sense, since we don't want to be in a house on a hill away from the community we moved into. But 1.2M doesn't go far in DC so you may need to be comfortable with a hefty payment. There is no one answer to what you should have as a mortgage at higher incomes.

How did it damage you? Did you sell at a poor time? If you were close in DC 2005-2006 was not a huge deal for real estate prices...relative to tertiary markets.

DP. No one knows what the future holds, including for the DC market. But it seems unwise to rush to buy a home during such a hot housing market with less than 20% down and a large mortgage. Why the rush?

Repeat, If i buy a house for 1.55M and it declines to 1.4M (10% drop)..how does this impact my life? You should never buy a house you don't plan to live in for 7-10 years.

7-10 years from now, odds (which are very high) are good that the price will be higher, or the same. Homes you live in are not meant to be investments

More likely it would be 10% followed by little if any appreciation. You could be underwater for years. It’s easy to say you don’t care because you aren’t moving, but things happen. School districts change, crime increases, job relocation etc. Do you really want to be stuck with a house you have to write a check for to sell?

But even people who bought at peak before the last crash had recovered 10 years out. And no one seems to think the coming correction will be that bad. People are so dramatic on here.

Not everyone, no. In many locations it took more than a decade.

Not in DCUM "close in" land..sure Vegas got hit hard BFD.

My home in Bethesda was pretty flat in 2005-2007

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you earn $500k I don't think you need to be getting financial advice from an anonymous message board.

That said, how are you getting a $7k mortgage payment on a $1.2 home (unless you're including taxes and insurance)? That's just not possible if you're paying 20% down. If you haven't saved enough for a 20% down payment on your HHI then I'm skeptical you should be making such a large financial commitment.

Good point! Even if you're borrowing $1.2 million your principal and interest would be less than $7K even at today's higher-than-last-year's rates. Are you including taxes and/or homeowners insurance to get to $7K? In that case you can even more easily afford it. I missed the $1.2 million purchase price - buying a house that costs only 2.4x your gross income is very affordable for this area.

Even with taxes and insurance $7K sounds very high for a $1.2M house - unless OP is putting down less than 20%. We purchased a house at $1.21M, 20% down, our all in nut is $5100 and that includes taxes and insurance. granted we got in at the lower rate but I can't believe - and yes maybe I'm wrong - that the rate hike would cause the overall nut to go up by $2K.

Your taxes must be extremely low and you must have locked in a 2%. We borrowed 600 with stellar credit and our all in nut is only a grand less than yours on a 30 year at 4%