SERIOUSLY - how are people affording these $1Mil+ homes with $8,000+ monthly mortgages!?

[Anonymous]

Lower interest rates and higher down payments

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have a lower HHI. We bought later in life have a mortgage right around what you're saying. Like a PP we rented way below our means for a long time to save.

We don't live lavishly otherwise. Old car, limited vacations, limited extracurriculars, but we are happy.

If rates go down we will refi and get some of our equity out of the property and our cash flow will modify in a life altering way.

Housing prices aren't going down. Limited inventory and zoning rules that keep the nice areas nice.

Make it work.

Please explain how pulling equity out of a property, and thereby increasing your indebtedness, will improve your cash flow.

Pull out home equity. Invest in stock market. And make huge profits.
Also, pull from credit cards. Invest in stock market. And make huge profits.
Then pay off the money.

[Anonymous]

Equity and low interest rate. We bought our first house in 2000 and just kept rolling over the equity when we bought bigger homes. Our current interest rate is also very low. Our house is worth about $3M and out payment is less than $4,000. No family money. We saved.

Buy what you can afford now. It doesn’t have to be your forever home. You have to start somewhere

[Anonymous]

Anonymous wrote:A lot of people bought when interest rates and prices were lower. People move up the property ladder.

+1
We did this. Almost 30 yrs ago. Bought in a moderately priced diverse neighborhood, a brand new SFH, which became our forever home. Schools and commute was mediocre. Later locked in super low interest rate (still have a mortgage of 2K a month) when it was a good time to refinance, and have never bothered to prepay the mortgage early

We have also taken home equity out when interest rates dipped and invested in prepaid college tuition, paid for higher education for DH, bought real estate for elderly parents in country of origin and invested in stock market at opportune time.

[Anonymous]

All these people talking about the property ladder....I guess that makes sense if you owned from 2002-2007 and from 2020-2025. But DC real estate is not going to have appreciation like those two periods for a loooong time. A house can be a forced savings account, but I wouldn't rely on it actually appreciating in value.

[Anonymous]

I'm not sure why you feel like you deserve a $1M house with an $8K mortgage as your first home? We just bought a $1M home, but we used savings + the proceeds from selling our first home (a modest townhouse) to put down $400K so our mortgage (including taxes and insurance) is $4600/month. Our old mortgage was $2700 so yes, it's a large increase but if we hadn't bought a "starter home" we certainly wouldn't be able to afford this one. We are mid to late 40s with children in elementary school.

[Anonymous]

Anonymous wrote:I must be doing something wrong. My household income is $300K and with two small kids, I want to live in a good public school zone. It feels impossible! My mortgage budget is $4k…which is maybe a $600K home. My research says if I want a good school with that budget, I’m buying an outdated 1500sq ft home with 7.5 foot ceilings. I need to leave Montgomery county!

You can buy a nice townhouse for $600K, OP.

[Anonymous]

Look at this whiny rich lady complaining that she can ONLY afford a $4K mortgage, LOL!!

How much do you have to put down? Maybe stop spending so much, sweetie.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A lot of people bought when interest rates and prices were lower. People move up the property ladder.

+1 most people buy starter homes and keep rolling their equity forward. I started with a condo, then a fixer upper, which allowed me to cash out ~$250k for my current home.

Condos are terrible idea. It worked during housing bubble when sanity left the market but have been a bad deal ever since.

Agreed and add townhomes to the list. We bought one as our starter home thinking we'd upgrade someday. The townhome has appreciated by about 1/3 in the time that SFHs have by 50-100%. Now consider current interest rates...I wish we hadn't tried so hard to be responsible, and had stretched our budget when we first bought.

Ditto. We kept our condo as a rental as it didn’t make sense to sell it (nets $1,500/month due to our super low interest rate) and our SFH is modest but in the right school district. I am grateful but also annoyed our forever home doesn’t look the same way as our peers (and then annoyed at myself for being annoyed).

[Anonymous]

I put down a lot of cash. My mortgage is only 300k and PITI is under 2k a month.

I know that's not what financial advisors would tell you to do, but we're dual feds whose salaries aren't high. We were good savers though and rolled a prior home's value in.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have a lower HHI. We bought later in life have a mortgage right around what you're saying. Like a PP we rented way below our means for a long time to save.

We don't live lavishly otherwise. Old car, limited vacations, limited extracurriculars, but we are happy.

If rates go down we will refi and get some of our equity out of the property and our cash flow will modify in a life altering way.

Housing prices aren't going down. Limited inventory and zoning rules that keep the nice areas nice.

Make it work.

Please explain how pulling equity out of a property, and thereby increasing your indebtedness, will improve your cash flow.

Pull out home equity. Invest in stock market. And make huge profits.
Also, pull from credit cards. Invest in stock market. And make huge profits.
Then pay off the money.

FFS

[Anonymous]

1- Buy a condo or small townhouse in your 20s. 2- upgrade in your 30s before having kids

It's very hard to save once you have kids and daycare is 24k a year, but prior to that you should be able to save a lot more.

[Anonymous]

Anonymous wrote:All these people talking about the property ladder....I guess that makes sense if you owned from 2002-2007 and from 2020-2025. But DC real estate is not going to have appreciation like those two periods for a loooong time. A house can be a forced savings account, but I wouldn't rely on it actually appreciating in value.

Ok. Then you move to a city where you can get in the property/equity ladder. Free will. Make smart decisions rather than whine about how things used to be.

[Anonymous]

Parental help.

[Anonymous]

Anonymous wrote:I must be doing something wrong. My household income is $300K and with two small kids, I want to live in a good public school zone. It feels impossible! My mortgage budget is $4k…which is maybe a $600K home. My research says if I want a good school with that budget, I’m buying an outdated 1500sq ft home with 7.5 foot ceilings. I need to leave Montgomery county!

Why is your mortgage budget so low? According to DCUM, I am an old fogey at 60. When we bought the rule of thumb was 3x your salary for your mortgage.and that was at 8.5%. We had a $275k mortgage on $100k income. I would think, you should be able to go to $800k- at least. How much of a down payment do you have?