How much mortgage can we afford?

[Anonymous]

Anonymous wrote:You need a job!!!!!

OP already said she’s a lawyer.

OP, I would focus on your debt and building up a larger DP before buying. You can rent and it will be cheaper until you are ready.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You need a job!!!!!

OP already said she’s a lawyer.

OP, I would focus on your debt and building up a larger DP before buying. You can rent and it will be cheaper until you are ready.

Then how do they have 2 kids and no childcare expenses?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You need a job!!!!!

OP already said she’s a lawyer.

OP, I would focus on your debt and building up a larger DP before buying. You can rent and it will be cheaper until you are ready.

Then how do they have 2 kids and no childcare expenses?

Dad stays at home, Relative takes care of children, one parent works days and the other works nights and/or weekends. Lots of options.

[Anonymous]

You need to stay put.

[Anonymous]

It would be a seriously bad idea to purchase anything right now. Rent a nice 2 bedroom place, 3k per month, pay off your student debt and save money toward a downpayment. Interest rates will eventually get lower when the economy collapses. Might not happen next year, but it will happen before too long. Then, you will have a downpayment saved up, lower rates, and probably will be making more money (and lower debt ratio) so you will be able to afford a LOT more house.

Biggest mistake would be buy right now at high rates and low downpayment, put like half your income toward interest payments (between your student loans and mortgage) and pay 6% commission to the fake profession of "realtors." As a lawyer you should be smart enough to understnd this

[Anonymous]

Anonymous wrote:HHI - $300k
Student debt - $250k
Car debt and other debt -$50k
Retirement fund, IRAs and 401k balance- $170k
Monthly fixed expenses: $4k

In reality, with interest rates so high currently for mortgages, you should really continue renting and focus your efforts on reducing the debt. IMO, I wouldn't take a mortgage until the student debt is gone.

With your income, assume 70% is after taxes, so you have $17.5-$4=$13.5K per month left. You can knock out that student debt in less than 2 years if your fixed expenses are really only $4k.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How much do you think you can afford? Are you planning to have kids? That debt is crazy high.

Law school is expensive. That’s why our debt is so high. Yes, we have 2 kids under 5.

Yet somehow we paid ours off in 10 years. Maybe you should get a job instead of mooching off your lawyer husband.

Op here: for your information, I am the wife and the lawyer, not my husband. And good for you for paying off your debt in 10 years I haven’t even been out of law school for 5 years yet.

Not PP (who is incredibly rude btw), but you can easily continue to rent and pay that debt off in 2-3 years. With interest rates so high currently, I'd highly recommend that. What are your real expenses? What does that 4K include---how much do you actually spend each month. Then you will know how much can go to the debt and how many months it will take to pay it off.
I would focus on paying down the debt, saving for college and retirement and then buy in 3-4 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would advise that you rent a cheaper place and save up for a DP. Aim to get a job not in an expensive city center (Tysons, Columbia, Baltimore). Save save save and in a few years, have a sizable DP on a nice house that is 900K as opposed to 1.5M.

In what world is Tyson’s not expensive? Some of you are really out of touch. Rents are very high. There is no cheap rental. I own a few rentals and they are small older townhouses. Rent for those is 3k/mo on average. Only a few hundred bucks cheaper than if you purchased the same house with 20% down.

But when the kitchen sink leaks, I don't pay $2k to the plumber, when the roof leaks, I don't pay $10K for a new one, etc. Renting you know your costs. Owning an older home is expensive and interest rates are high right now. They need to get control of their finances before buying. With her income they have the ability to do just that in 3-4 years and be in a much better place.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You need a job!!!!!

OP already said she’s a lawyer.

OP, I would focus on your debt and building up a larger DP before buying. You can rent and it will be cheaper until you are ready.

Then how do they have 2 kids and no childcare expenses?

Reading is quite simple. Her DH is a SAHP. Amazing how people cannot grasp that concept.

[Anonymous]

I would aim to buy a house the spring/summer before your eldest is going to start kindergarten so you can have stability for them in schools but a little more time (unless "under 5" means they are turning 5 this summer and starting K). Before then, I would put some of your downpayment money to pay off your "other debt" if it's above 4% interest. Your debt load is what is going to limit your options.

If you are only out of law school for 5 years AND had two kids during that time, and the pandemic and student loan debt pauses--your life and your expenses are in a whirl. You might not have a handle on what your expenses really are. So take a little time and more intentionally sort that out.
If you think you can take on a 750k mortgage (seems tight but potentially doable ), start paying what the PITI for that would be (look up estimates for property tax and insurance in the area you want to buy) that plus 1% of the total home cost as the estimated annual cost of home maintenance into your savings/accelerated debt repayment. I would also at least open up 529 plans for your kids and put an autopay enough to get the state income tax break (if you have one) and tax-deferred savings. I would also be contributing the max to your retirement account if you aren't already. At your income you want to take advantage of all the tax breaks you can and you want to have a realistic sense of how tight things will be when you will be owning a house, responsible for taxes, insurance and maintenance, and be contributing appropriately to your future needs (college, retirement) and paying off your past purchases (student loan debt, car debt, other debt).

[Anonymous]

We also have 2 kids under 5 (only 1 still in childcare- the other is in public school), $300k HHI. No debt other than remaining mortgage. Our PITI is $2800 and we feel great about it. We are considering taking on a second mortgage that would be $1700/mon and feel we could still reasonably afford that.

[Anonymous]

Omg you cannot afford $750k for a house. Lord.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:HHI - $300k
Student debt - $250k
Car debt and other debt -$50k
Retirement fund, IRAs and 401k balance- $170k
Monthly fixed expenses: $4k

How much of the $4k goes to student debt, how much for car and how much to 401k/IRA?
How much are you putting toward college costs for children?
What is the “and other debt”?

How is the $300k income split between each spouse?

The $4k expenses doesn’t include any payments for the student debt (it’s on a freeze for now) and it doesn’t include retirement (we put $30k/annually in retirement funds). $722 for the car which is included in the $4k expense figure. We haven’t started saving for college yet.

Student loans are being unfrozen next month - in July 2023 - per the debt ceiling bill that just passed Congress...So your payments should absolutely be factored into your expenses. FWIW, I am 35, have three kids under 5, and came out of business school with $100K of debt about 7 years ago (I have about $14K left to go). We bought a house for $1.4M a few years ago when interest rates were reasonable (we put more than 20% down and our PITI is 5.5K) and I think I had around $30K in debt. Our income was about $350K then (now it's around $750K) and my student loans didn't impact our ability to get a mortgage. We currently pay for a nanny and preschool, but other than my student loan payments each month and our mortgage we don't have any debt. I would be cautious about taking out too much and overextending yourself with your loan payments... do you know what your loan payment will be when the pause ends next month? Are you going to try to pay it off in the next 10 years or so or are you just planning on paying the minimum for 30 years?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You need a job!!!!!

OP already said she’s a lawyer.

OP, I would focus on your debt and building up a larger DP before buying. You can rent and it will be cheaper until you are ready.

Then how do they have 2 kids and no childcare expenses?

Reading is quite simple. Her DH is a SAHP. Amazing how people cannot grasp that concept.

Sometimes people have really nice parents who essentially act as nannies or WFH and take care of their children while "working" from home. You wouldn't believe all the people on DCUM who say that they would never "let a stranger take care of their kid". I'm not one of them - I have a nanny. Just saying that many of us don't make assumptions about what is happening if someone has zero childcare expenses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You need a job!!!!!

OP already said she’s a lawyer.

OP, I would focus on your debt and building up a larger DP before buying. You can rent and it will be cheaper until you are ready.

Then how do they have 2 kids and no childcare expenses?

Reading is quite simple. Her DH is a SAHP. Amazing how people cannot grasp that concept.

Sometimes people have really nice parents who essentially act as nannies or WFH and take care of their children while "working" from home. You wouldn't believe all the people on DCUM who say that they would never "let a stranger take care of their kid". I'm not one of them - I have a nanny. Just saying that many of us don't make assumptions about what is happening if someone has zero childcare expenses.

The OP had already stated she works, DH is a SAHP well before that poster commented. So if people would just read the thread rather than attempting to be rude/obnoxious with "why are there no childcare expenses".
In reality, it does not matter why there is no childcare expenses, as long as the childcare is reliable.
And a SAHP or a relative caring for your kids is about as reliable as you can get.