How much to expect to spend on a new house?
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Anonymous
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DH and I both work FT. I have always worked FT and have no desire to be a SAH parent. Neither does he. We have 2 preschoolers in full day preschool.
DH says we should buy a house based only on a single salary because its a safer thing to do and I totally disagree. Thoughts? Does anyone do that? It seems dramatically over-cautious to me. By the way, I disagree because I think we'll end up in too-small of a home that we will quickly outgrow (which is what is happening now) |
Anonymous
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Where do you live?
If you mean a SFH, unless you have $100,000 in liquid cash to put down you're probably not going to find much inside the Beltway, PG County excepted. |
Anonymous
| OP - to be clear, he wants to budget the future mortgage on a single income, not double, which I think is absurd. Our combined HHI is $300 ish. |
Anonymous
| That is doable in dc. easily. |
Anonymous
| We do, but interpret it as one salary covers the house, childcare, 401ks, and other basic expenses. Not much left after that. So we could pay bills on one salary as long as we need to, but need the second income to save enough for retirement and to afford luxuries. Same HHI. |
Anonymous
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Make sure you have good insurance in case, god forbid, one of you can no longer work. Get a good life insurance.
That will cover the two worst case scenarios. Now, think how likely it is that one of you will be unemployed for a significant amount of time. Then deal with that risk, and see what you;re comfortable with. |
Anonymous
Our HHI is 330K, and we budget for a mortgage we can swing on a single income. Not absurd, just conservative. |
Anonymous
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DW and I both work and we got a mortgage that we could only swing with both incomes and are now feeling some stress related to it. We do, however, have additional assets that we could put into the house to decrease the mortgage, if the stress gets too much. It's just with such low interest rates, it seems to make sense to keep those assets elsewhere.
In our ideal world, we would have bought a home that was $100k-$150k less than what we did. However, at the end of the day, we found a slightly bigger house walkable to the metro and decided to pull the trigger because we didn't want to outgrow the house and have to pay double realtors' commissions, taxes, etc. As PPs have noted, to answer your question better, we would need to know where you are looking and how much you have for a down payment. In addition, it also would help to know if the two salaries are the same or far apart, since it may be much easier for you to get a mortgage for a house you want on a single salary if one of them is 200 or 250 than if both are 150, etc. |
Anonymous
| HHI of 165k and we bought with the idea that if we had to, we could live on a single income. That means mortgage and bills would be paid, but we would have nothing extra left each month. FYI, we also decided that experiences would be a better way to spend our money than on a house. Could we have afford more, yes. But did we need more, no. We are be no means in a house we will outgrow. We are in NoVA, but neither of us work in DC so we bought close to work with great schools. |
Anonymous
| It is dramatically over-cautious. If he is that worried you should just make sure you have enough savings to tide you over for a period of time if one of you became unemployed and you had to survive on one salary - 6 or 12 months. |
Anonymous
| OP, read Elizabeth Warren's book, The Two Income Trap. Then decide how you feel. |
Anonymous
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OP, obviously only you know how risk-tolerant you and your husband are. We've just gone through this process and are buying a place that we wouldn't be able to afford on one salary but is also $200k less than what the bank thinks we can afford. FWIW I wanted to go with a budget of about $100k more but DH was really uncomfortable, so we compromised. We also both did a bunch of number-crunching to figure out what life will be like with the new mortgage payment. It will be a stretch initially but not so much that we can never go on a vacation or eat in a restaurant. Those would have been deal-breakers for me and I think DH as well.
One thing that was really important to me in this process was never to feel like either DH or I was being dragged into something one of us wasn't comfortable with. I didn't want either of us to wake up in a year or two and say, "you made me buy this house." We have worked hard to be on the same page throughout. |
Anonymous
| Your kids will need more space as they grow up. A small place that you fit into with young kids will be a tight squeeze when that are older. |
Anonymous
We bought based on a single salary and it has made a big difference. F L E X I B I L I T Y cannot be underestimated. Neither can the reduced stress. We used the extra money to save for renovations and paid cash for those and we used/are using the extra money for college savings. It reduces stress when one of you gets a toxic boss and needs to find a new job. You can look at taking a step back to get out of the toxic environment before it drains you dry. It reduces stress when one of your children has an issue that requires more parenting time and one of you can negotiate part time for the time being. It reduces stress because you can afford a nice vacation where you want to go. Or an every other week maid service or a lawn service so you can spend more time together as a family or with each other alone at an Inn for the whole weekend. It reduces stress because then you can take the job you LOVE and not just the one that pays the best. |
Anonymous
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Would love to hear the specific numbers on these mortgage.
Not OP, but DH and I are facing the exact same issue. Although in our case, I am the more conservative one. 
We have a HHI of $150k and will have about $100k cash from sale of our current place. What mortgage range would be reasonable for us? |