Mortgage Payment on 200K salary?

[Anonymous]

Our HHI is about is about $235k. Daycare expenses are only about $600/month for us right now, but we're about to have #2 and they may go up to about $1,600/month for the next two years. We have a small student loan payment (less than $200) and no car payment, but we're also thinking of replacing one of our cars in the next year or two. We max out our 401ks and our take home pay is about $10,000/month.

Our monthly PITI payment is $3,000. It was higher (around $3,600) when we first bought and I'm so thankful that we've been able to bring it down by refinancing twice. With another child on the way, I think we're going to have to tighten our belts a little.

It really depends on your comfort level, how secure your incomes are, and how much you want to be saving for other things. We are certainly comfortable, I would never say we're living paycheck to paycheck or even close to that. We max out 401ks, put $10k/year into IRAs, invest in a 529 plan and other investments, etc. We also make one extra mortgage payment each year. We take vacations and we generally buy the things we need and go out to eat when we feel like it. So saying all that, it sounds like we're very comfortable. And we are, but there's still part of me that wishes we were saving more or that the student loans were finally paid off or that we could pay cash for our next car..... There's always something else you could do with your money besides putting it towards your mortgage!

For example, we just did a lot of work on our house and we have some additional projects we'd like to do in the next year or so. I think those are going to require us to dip into over savings right at a point when our expenses are increasing (day care). So despite our "comfort", we're actually going to have a negative cash flow.

Another thing to consider is that your PITI payment is not locked it. Our tax bill is going up this year and who knows what the future holds in terms of real estate taxes. Of course, that's a smaller percentage of your payment, but still something to think about.

[Anonymous]

We make $200/yr and have a complete mortgage payment of $2400 (PITI,taxes,insurance). We have one daycare payment of $1100/mo, plus before/aftercare for other child of $300/mo. No car payments, we max retirement, and do our best with college savings. We have about $50k liquid.

I wouldn't want to pay one penny more for our mortgage. There is always something that pops up and having a little extra to skim off the top in those cases is great.

[Anonymous]

Whoops, I'm PP, I meant we also make $200K/yr

[Anonymous]

Anonymous wrote:Our HHI is almost exactly 200k (varies a tad based on bonuses).

No kids, but a mortgage of $2750 is VERY comfortable here, no issues. One car with a low payment. Saving 5% into tax advantaged accounts, and another $15k-20k/yr into index funds.

Once kids come into the picture this may change, but we'll hopefully have the car fully paid off shortly as well to ease that.

If you don't yet have kids, it is apples to oranges.

[Anonymous]

We are a bit over that in salary, no daycare costs (except summer camps) and still saving a lot with a $4k mortgage, so I would say $3K for OP is very doable and could probably go a little higher.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our HHI is almost exactly 200k (varies a tad based on bonuses).

No kids, but a mortgage of $2750 is VERY comfortable here, no issues. One car with a low payment. Saving 5% into tax advantaged accounts, and another $15k-20k/yr into index funds.

Once kids come into the picture this may change, but we'll hopefully have the car fully paid off shortly as well to ease that.

If you don't yet have kids, it is apples to oranges.

+1,000

Between daycare, private, food, 529, higher health insurance, etc there's easily an extra $75,000 of after tax expenses each year. Easily.

[Anonymous]

The only way to really answer these questions is to put together a budget. We currently make a little less (about 175k) with three kids. I stay at home right now so childcare expenses are minimal. We always pay cash for cars, so no car payment. Since we now also eat out a lot less than we used to, I find we are "accidentally" saving a lot more money than we expected. We pay 3600 in PITI, and we are in no way financially stretched. We max out 401k for the husband, IRA for me, and still save close to 30k a year on top of that. We don't go to Paris every weekend, but we do vacation, and college for the kids is already funded thanks to some really aggressive saving when we were both making a lot of money in the private sector.

I would encourage OP to download Mint or something similar and just track expenses for a while.

[Anonymous]

Anonymous wrote:We are a little less than 200k and manage a $3,500 mortgage with one kid in day care ($1500/month) and one car payment. We are making good contributions to, but not maxing out, on retirement and college savings. We both have very stable jobs that will provide additional income, so I expect that payment to become a smaller portion of our income every year.

We found a house we love in an area we expect to be in for many years, so I felt comfortable stretching for the first couple of years.

PP should try to max out, you will kick yourself later...

[Anonymous]

Wow, our HHI is 150K and our monthly payment is nearly 2700...

[Anonymous]

Blanket statements like this make no sense. Some 401ks are horrible. I was at a place for a few years with very little match and terrible fees. I didn't put a dime in that thing. Good plan at the new job and I max out.

Anonymous wrote:

Anonymous wrote:We are a little less than 200k and manage a $3,500 mortgage with one kid in day care ($1500/month) and one car payment. We are making good contributions to, but not maxing out, on retirement and college savings. We both have very stable jobs that will provide additional income, so I expect that payment to become a smaller portion of our income every year.

We found a house we love in an area we expect to be in for many years, so I felt comfortable stretching for the first couple of years.

PP should try to max out, you will kick yourself later...

[Anonymous]

Anonymous wrote:Blanket statements like this make no sense. Some 401ks are horrible. I was at a place for a few years with very little match and terrible fees. I didn't put a dime in that thing. Good plan at the new job and I max out.

Anonymous wrote:

Anonymous wrote:We are a little less than 200k and manage a $3,500 mortgage with one kid in day care ($1500/month) and one car payment. We are making good contributions to, but not maxing out, on retirement and college savings. We both have very stable jobs that will provide additional income, so I expect that payment to become a smaller portion of our income every year.

We found a house we love in an area we expect to be in for many years, so I felt comfortable stretching for the first couple of years.

PP should try to max out, you will kick yourself later...

Well, you are ignoring the tax benefits ...

[Anonymous]

No, I fully understand the tax implications. If fees are high enough and performance is poor enough on tax advantaged accounts, taking the tax hit now and putting the money in a taxable account can y produce superior yield. This is a well known issue. Your grasp of these things is clearly limited (or you run a 401k), and you should not be giving advice on financial matters.

Anonymous wrote:

Anonymous wrote:Blanket statements like this make no sense. Some 401ks are horrible. I was at a place for a few years with very little match and terrible fees. I didn't put a dime in that thing. Good plan at the new job and I max out.

Anonymous wrote:

Anonymous wrote:We are a little less than 200k and manage a $3,500 mortgage with one kid in day care ($1500/month) and one car payment. We are making good contributions to, but not maxing out, on retirement and college savings. We both have very stable jobs that will provide additional income, so I expect that payment to become a smaller portion of our income every year.

We found a house we love in an area we expect to be in for many years, so I felt comfortable stretching for the first couple of years.

PP should try to max out, you will kick yourself later...

Well, you are ignoring the tax benefits ...

[Anonymous]

Anonymous wrote:No, I fully understand the tax implications. If fees are high enough and performance is poor enough on tax advantaged accounts, taking the tax hit now and putting the money in a taxable account can y produce superior yield. This is a well known issue. Your grasp of these things is clearly limited (or you run a 401k), and you should not be giving advice on financial matters.

Anonymous wrote:

Anonymous wrote:Blanket statements like this make no sense. Some 401ks are horrible. I was at a place for a few years with very little match and terrible fees. I didn't put a dime in that thing. Good plan at the new job and I max out.

Anonymous wrote:

Anonymous wrote:We are a little less than 200k and manage a $3,500 mortgage with one kid in day care ($1500/month) and one car payment. We are making good contributions to, but not maxing out, on retirement and college savings. We both have very stable jobs that will provide additional income, so I expect that payment to become a smaller portion of our income every year.

We found a house we love in an area we expect to be in for many years, so I felt comfortable stretching for the first couple of years.

PP should try to max out, you will kick yourself later...

Well, you are ignoring the tax benefits ...

There is no way this works if you are in the highest tax brackets. No way. Fees in a tax shelter are better.

[Anonymous]

Anonymous wrote:No, I fully understand the tax implications. If fees are high enough and performance is poor enough on tax advantaged accounts, taking the tax hit now and putting the money in a taxable account can y produce superior yield. This is a well known issue. Your grasp of these things is clearly limited (or you run a 401k), and you should not be giving advice on financial matters.

Anonymous wrote:

Anonymous wrote:Blanket statements like this make no sense. Some 401ks are horrible. I was at a place for a few years with very little match and terrible fees. I didn't put a dime in that thing. Good plan at the new job and I max out.





Well, you are ignoring the tax benefits ...

Haha. You are making quite a few assumptions there...high fees, poor performance, etc. The fees and performance drag have to be pretty darn high to offset a ~15%+ tax shield. It would have to be an absolutely atrocious plan - as in world class bad - to not have some level of index fund / general market exposure to make it a 99.9999% chance of outperforming any taxable option when the tax shield is included. I am quite confident my understanding of these issues would run absolute circles around your clearly elementary understanding.

[Anonymous]

Anonymous wrote:No, I fully understand the tax implications. If fees are high enough and performance is poor enough on tax advantaged accounts, taking the tax hit now and putting the money in a taxable account can y produce superior yield. This is a well known issue. Your grasp of these things is clearly limited (or you run a 401k), and you should not be giving advice on financial matters.

Anonymous wrote:

Anonymous wrote:Blanket statements like this make no sense. Some 401ks are horrible. I was at a place for a few years with very little match and terrible fees. I didn't put a dime in that thing. Good plan at the new job and I max out.

Anonymous wrote:

Anonymous wrote:We are a little less than 200k and manage a $3,500 mortgage with one kid in day care ($1500/month) and one car payment. We are making good contributions to, but not maxing out, on retirement and college savings. We both have very stable jobs that will provide additional income, so I expect that payment to become a smaller portion of our income every year.

We found a house we love in an area we expect to be in for many years, so I felt comfortable stretching for the first couple of years.

PP should try to max out, you will kick yourself later...

Well, you are ignoring the tax benefits ...

Agree with two prior PPs. You are an idiot. Please follow your own advice and refrain from giving financial advice.