Making 150k with mortgage of 550k?

[Anonymous]

With your salary, you should not take on a mortgage over $450,000. Sorry OP.

[Anonymous]

OP here-
Our Gross Take home pay is 12,500.
We have been putting 2,000 a month away in retirement, so it is hard to calculate net because we are going to no longer put so much in retirement and switch to putting the money into a house.
Our current rent is 2150 a month.
Afterschool care is 900 a month (we will be saving 500 dollars a month going from daycare to aftercare this school year for the youngest). We don't need summer care because of family in the area watch our kids.
The Mortgage will be 2700 a month, with taxes and insurance just under 3500 a month.
It would be safer to continue renting but we feel if we are ever going to own a house this is the time. We aren't willing to buy a starter house further out and commute. We can envision growing old in this house. We will have 50,000 left in an emergency fund once we purchase the house.

[Anonymous]

We have an HHI of $250K - and I work part-time - we bought a home that either one of us could carry on our own if something happened to one our incomes. We did have a hefty down payment, though. We never count our chickens before they hatch

[Anonymous]

Anonymous wrote:OP here-
Our Gross Take home pay is 12,500.
We have been putting 2,000 a month away in retirement, so it is hard to calculate net because we are going to no longer put so much in retirement and switch to putting the money into a house.
Our current rent is 2150 a month.
Afterschool care is 900 a month (we will be saving 500 dollars a month going from daycare to aftercare this school year for the youngest). We don't need summer care because of family in the area watch our kids.
The Mortgage will be 2700 a month, with taxes and insurance just under 3500 a month.
It would be safer to continue renting but we feel if we are ever going to own a house this is the time. We aren't willing to buy a starter house further out and commute. We can envision growing old in this house. We will have 50,000 left in an emergency fund once we purchase the house.

Do you have any other debt aside from maybe a small car loan? If so I wouldn't do it. We took out $420 on $140 and were squeezed because of student loans. Now we make $190 and are still squeezed with daycare for the second kid.

[Anonymous]

You can afford it. Ignore the frugal police here. Your mortgage would be pretty normal around here for your income level. If the payment amount fits into your budget,that's all you need to worry about. Different stroke for different folks.

[Anonymous]

DCUM are nuts you can certainly afford it! I would focus on how much you think the house will cost to run and what major repairs could you possible be faced with. That is what will make or break you.

[Anonymous]

I would have balked at this situation. But I am a risk averse person. We are a household of 300K HHI with a mortgage of 350K.

We have a great house but we compromised on schools and had to figure out other solutions for that.

At the end of the day, we have been able to finance retirement, college for kids, and have remained debt free - because the mortgage was sane.

[Anonymous]

Anonymous wrote:OP here-
Our Gross Take home pay is 12,500.
We have been putting 2,000 a month away in retirement, so it is hard to calculate net because we are going to no longer put so much in retirement and switch to putting the money into a house.
Our current rent is 2150 a month.
Afterschool care is 900 a month (we will be saving 500 dollars a month going from daycare to aftercare this school year for the youngest). We don't need summer care because of family in the area watch our kids.
The Mortgage will be 2700 a month, with taxes and insurance just under 3500 a month.
It would be safer to continue renting but we feel if we are ever going to own a house this is the time. We aren't willing to buy a starter house further out and commute. We can envision growing old in this house. We will have 50,000 left in an emergency fund once we purchase the house.

I think this is a bad decision. No one will loan you money to retire. House, college and some other stuff, you can get a loan. Your contribution to your retirement is 100% tax deductible, but your mortgage is not 100% tax deductible.

[Anonymous]

If the house is done and doesn't require a lot of expensive remodeling AND if the house is not at the very top of the neighborhood prices, then yes, go for it. With these low rates, I think it really is worth overextending yourself just a bit in order to get the long-term house that you can grow into and be happy with for the long-term. If you sacrificed and got something cheaper that wouldn't work long-term, you might never get the opportunity to buy the more expensive house at the cheap price as today.

The budget won't be tight by any means, but you won't feel cash rich either.

[Anonymous]

I would do it.

When we bought our first place, our mortgage was roughly $3300 all in with PITI and we made much less than $150k. We were both on Fed ladders so knew our income would increase substantially. We didn't have kids and lived very frugally as our incomes increased and also refinanced twice which eventually brought it down to $2400 a month.

Especially since you can use the public schools and won't have to additionally stretch for private. We just sold our old place and bought a new one with a much bigger mortgage that will still cost us less than our old mortgage plus private school, which is what we were facing in our old place.

[Anonymous]

Unless your HHI is crazy high and unless you are willing to live out in far out suburbs, everyone in the DC area has to stretch beyond their comfort level to get into a house now. It's just the way it is.

[Anonymous]

100K HHI.
2700 monthly mortgage payment (15 year).
House of similar value, no commute, walkable to everything (priceless!).
2 kids.
20K annual education investment ie: tuition and extra-curricular activities.
We continue to save for retirement and college.
0 student loans.

It's tight, we hardly have disposable income.
But this is how we prefer to spend our money.

Remember that daycare is nothing compared to accumulated costs of activities for kids once they get past elementary school (and even then, private music lessons or travel teams are expensive).

[Anonymous]

Anonymous wrote:
100K HHI.
2700 monthly mortgage payment (15 year).
House of similar value, no commute, walkable to everything (priceless!).
2 kids.
20K annual education investment ie: tuition and extra-curricular activities.
We continue to save for retirement and college.
0 student loans.

It's tight, we hardly have disposable income.
But this is how we prefer to spend our money.

Remember that daycare is nothing compared to accumulated costs of activities for kids once they get past elementary school (and even then, private music lessons or travel teams are expensive).

Ummm except those are voluntary expenses and most people NEED daycare.

[Anonymous]

You should be fine. We were in the exact same scenario...and have a $555 mortgage. We are fine and every year our salaries have increased plus we have been spending a fortune on child care. The real problem is that you aren't going to get a mortgage for much cheaper in this area, so you don't have much of a choice if you want to buy. Definitely go for it...especially since you are in the clear w/ child care!

[Anonymous]

We earn 80K more than you, and would NOT do it, even with wiggle room.