Am I crazy for thinking that we could afford this?

[Anonymous]

You need to add into your mortgage estimate cost of escrow (taxes and insurance), you also need to save for closing costs unless your strategy is to get the seller to pay your costs, which in this market isn't as likely as it used to be.
If you buy a town home there might be Monthly HOA fees which could be nothing to laugh at, another unexpected expense.

You also need to budget for childcare, even if you think both grandparents will want to provide 5 day a week Fulltime childcare, listen to all us seasoned parents on here who are warning you it is NEVER a guarantee or you may not like how they tend to your child. Go to the family relationship forum, there are tons of threads on this. This is a huge deal.

A good childcare center usually runs between $1200 to $1500 a month for an infant. An at home day care is usu less and a nanny is usu more.

I would advise to consider a smaller house/town home or maybe even think about a condo, at least for one kid it is doable.

[Anonymous]

Anonymous wrote:OP here... just wanted to address some of the earlier posts

- in terms of spending close to 500k for a home in gaithersburg, I don't see a problem. I work at home, my wife works in gaithersburg... we have no desire or need to be close to DC. all our close friends live in the area.

- in regards to childcare. i am not planning for childcare to be completely free... but considering the fact that we have two sets of inlaws that have agreed to watch the children, plus the fact that i work from home with an EXTREMELY flexible schedule... i think it is likely that we won't ever have to have our kids in a daycare (we would end up putting the kids in some sort of part time preschool at 3-4 to prepare them for kindergarten though). There could obviously be unforseen circumstances, but I am accounting for the LIKELY scenario, not the absolute worst case scenario.

-in terms of a fund, yes we have an emergency fund

-we currently rent a 1br for around 1400 a month

Oh friend, I say this in all sincerity, you are so naive. you absolutely have to plan for the worst case scenario with the childcare. That is what parents do.

[Anonymous]

Anonymous wrote:
We have a similar HHI, debts, and work situationss (scarily so) and recently bought a house in Rockville with 20% down and a 350K mortgage. It is a stretch for us, mostly because we are paying more than our mortgage cost every month for childcare.

I agree that you need to think very carefully about your childcare expenses. Affordable part-time childcare is almost impossible to find (I actually ended up increasing my work hours for this reason). Our children are in preschool from 9:30-3:30 and the cost is still ridiculous. At this point, we are not saving anything other than maxing our retirement, and our finances are tighter than I am comfortable with.

Can you delay buying and live very frugally for awhile to save for a bigger down payment? At your income, and with no kids, you should be able to save at least $30K in a year (that's nearly what we pay for childcare!). We lived in a one-bedroom with our first baby for a year, and it was fine. Also, I think you can find what you are looking for in Rockville/Gaithersburg for <$450K, especially if you are looking at townhomes. We bought in an area zoned for a great elementary but not one of the top high schools because we'll likely be moving before then (the school is still good enough that it won't be the end of the world if we don't move) which saved us some.


you lived in a 1br with a baby? yikes. i don't know if we could do that =) especially considering my "home office" takes up some space in the bedroom

Yes - we had some unforeseen circumstances (major disaster rendering our home uninhabitable) and ended up moving 5 times in the first two years of our first child's life. Much of time was in a one bedroom apartment (and some of it was in a friend's basement). It definitely was not ideal, but it really made me appreciate that especially for the first 6 months, you really don't need much for a baby. I think OP would be much better off saving while he can instead of rushing into something they might not be able to afford.

Plus, now I REALLY REALLY appreciate all the extra rooms in our current home!

[Anonymous]

We had free child care for eight years thanks to grandma....but then she got breast cancer. So did my friends...until grandma and grandpa thought babysitting eight hours a day was too draining (and boring). And older parents (once they hit 60) have multiple doctors appointments even if they are healthy...so one of my friends ended up going the nanny route when her parents continuously had appointments, got sick, were tired, had theater tickets, wanted to travel, etc. And while most grandparents don't mind after school care for a few hours, most aren't equipped to entertain kids all day during the summer...and summer camp is way more expensive than daycare (I'm talking several thousand for the summer, and that's from 9 to 3...before/after care nearly doubles it).

And what if your roof goes? Or you have a plumbing issue? Or you want to travel or eat out?

Factor all of that in.

[Anonymous]

You'll be ok with your incomes but be VERY careful about childcare. It's extremely rare to have full-time grandparent help. It won't work out the way anyone thinks it will.

[Anonymous]

That sounds like a doable plan. BUT, when kids (or just 1 kid) enter the picture, everything will change. You will find yourself paying for expenses you never had.

Free childcare? Don't assume, ask ahead of time. Even so, personality and preferences of relatives will surface. You might end up not wanting any of the other family members to watch your precious kid. That's FIVE days a week. Most likely, 7am-6pm. That's a lot of time! Most is 3 days a week and it would be for the first year. After that, you will start to think, does my kid need to socialize with other kids...is my parent spoiling my baby...why is my MIL overfeeding my baby...is auntie not reading to my child...why is my child crying nonstop...oh, my mom suddenly looks too old to take care of my baby. All sorts of things come up. Daycare for infants are like $1500/month if you don't have relatives to watch.

Also, with a kid (I'm just talking about one), baby necessities come up. You find yourself buying so much diapers, wipes, formula...what if there are other health issues. The expenses for us with one child was about $250/month and I thought we were frugal. But, you find yourself, needing this/that to make it easier.

Also, look at where you are buying. What public schools will it feed into. Unless you have already decided on private schools. Might be a lot to think about but, with a child, time flies so fast, next thing you know, you have to think about kindergarten! Will you move again because you don't like the school district? Speaking of school, will you start to tune into helping them save for college....all sorts of things come up when you have kids.

[Anonymous]

Anonymous wrote:You'll be ok with your incomes but be VERY careful about childcare. It's extremely rare to have full-time grandparent help. It won't work out the way anyone thinks it will.

I disagree with this based on my personal experience. We have family who watch our two kids full-time and it works out GREAT. I couldn't ask for better childcare and my relationship with my MIL is stronger than it has ever been. I'm not saying that this is always the case--of course, there are situations where things could be terrible. But I have known several people who have depended on family for childcare and all of them are very happy with the arrangement. It can work out--it has been great for our family.

We do send our older child to pre-school now and that is not cheap so while you may not need to estimate $50K for a nanny, you should factor in at least $10K a year for pre-school, camps, etc because even if the grandparents are willing, you will still want socialization for your child. But this doesn't really come into play until they are over 2.

Is it smart to factor in childcare before buying a house you can't afford if the grandparents don't work out? Yes, absolutely. But don't be discouraged by those who are saying that it won't work out no matter how successful you think it will be. It can work out...it's not impossible.

[Anonymous]

It can work out with grandparents, unless someone gets sick. That can happen anytime, but it usually happens in their 60s.

And $10k for preschool is cheap. Full day Pre k is likely more than that...even in Gburg. Then there's camp.

PS - diapers, formula, etc adds tons to your grocery bill. Clothing and gear are more costly than you think.

[Anonymous]

Anonymous wrote:This is definitely doable in my opinion. There are 80-10-10 programs out there where you can have a 10% down payment with only a slightly higher interest rate then you would get for 20% down.

Either you bought your house before the mortgage crisis or both you and your spouse have credit scores well above 800 (which most first time home buyers do not have).

[Anonymous]

I think this is probably doable but I echo the earlier poster who suggested you try living on this budget first. Figure out what your monthly payment would be, also budget a "worst case" childcare scenario, total those two numbers, subtract your rent, and try to save the resulting figure for several consecutive months. Then buy.

To the poster who thinks a 30K increase in salary is unreasonable to bank on, not necessarily if you're a federal worker. I got a large bump when my salary grade increased, and I knew exactly when it would happen and how much the raise would be almost two years before it became official.

[Anonymous]

It's do-able.

[Anonymous]

Income 90k 500k house 20% down 1 infant in daycare. If I can do it should be much easier for your family.

[Anonymous]

Anonymous wrote:Income 90k 500k house 20% down 1 infant in daycare. If I can do it should be much easier for your family.

My family couldn't do what you're doing, so I'm not sure you can generalize.

[Anonymous]

Income 80k- $300k house, 1 child in daycare and I am fine, so yeh you will be okay!

[Anonymous]

when my son was 3 months old, my mom was begging for me to start sending him to her for the summers once he was old enough. by the time he was a toddler, she was unable to keep up with him even for a few hours. you need to make sure the parents are willing, able, and that you feel comfortable with them taking care of your kid--they may seem normal, but once you have a baby and your own way of doing things, you might change your mind about them. also, working from home is great, as is flexibility, but very few people can work from home and watch kids at the same time.

otherwise, I think you can probably go for a mortage of under 417k. good luck.