How much take home pay would you personally want to buy a $1.5M house right now?

[Anonymous]

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Anonymous wrote:Our HHI is in the 450ish range and I would not want a 10k mortgage payment. We live in a 1m dollar home and had a high down payment so our total monthly payment including tax (but excluding insurance) is around 4K.

We make ~$530K, and have a $4100 PITI, and I wouldn't want to double that. Could we do it? Yes. But it would come at the cost of both savings (retirement, college and other) and experiences that we would rather keep in our budget.

At the end of the day, it's all about choices.

I would love to keep it at $4000 but what is that with rates these days, a $700k house? Is that really what people making half a million are buying these days?

Is this OP? How much equity do you have in your current place? I think it's strange you have a full-time nanny, and expensive daycare, and 2+ kids but have just paid off your student loans on $550-600k/year HHI, and are apparently just now getting on the property ladder? Don't get me wrong, I had ~$200k in student loans, but you seem to be doing things in a strange order here.

I think plenty of people making half a million take out mortgages for $700k, yes. That does not mean that's the value of the house they're purchasing.

That was me. We’ve never owned a home. We’ve lived in different cities for various reasons and didn’t want to buy until we knew we would stay. We paid off student loans a few years ago (was just explaining why we haven’t saved enough to make a huge down payment). I’m not sure what you mean by expensive daycare, we need childcare so we do daycare and have a nanny for the baby until she’s older enough for daycare.

Ah you mean 700k mortgage - I agree. I meant a 700k house.

When you already have a full-time nanny, daycare for the older kid is an optional extra expense you've decided to have. A nanny is childcare, and babies can go to daycare. You're choosing the most expensive option for each kid, while and mixing and matching to maximize expense. Based on these facts, it's really hard to believe that 1) your kids will go to public school, and 2) you're "not big spenders."

Aim to spend no more than 1/3 of your take home income on PITI. You have multiple kids to send to college.

OP here. That’s an interesting perspective. I’d think a 3 year old and especially a 4 year old would benefit greatly from the socialization and structure of daycare. I can’t imagine that a nanny could nurture them properly while having their hands full with an infant.

Yes I plan on sending my kids to public school. Childcare isn’t free before then so I pay for it…

Sure. So send the baby to daycare too.

You've made some financially less than optimal decisions, OP. Paying off very low interest student loans rather than saving/investing. Having three kids (I realize that's much more than a financial decision, but is also *is* a financial decision). Don't compound them by extending yourself too far on a house.

Wow, so much judgment and so many assumptions! 1. I have 2 kids. 2. The baby is literally too young for daycare right now as in daycares don’t take babies that young. Plus I don’t just pick the cheapest childcare option possible since I actually care about their well being. 3. You don’t know what the interest on the loans are and I don’t see anything wrong with paying them off and being debt free if you can.

1. You wrote, "I’d think a 3 year old and especially a 4 year old would benefit greatly from the socialization and structure of daycare." Not sure how anyone is supposed to understand that you are talking about one child.
2. If the nanny is such a short-term expense, you shouldn't have included it for consideration.
3. You're right, I don't know the interest rates - what were they? I do know that we are coming out of an extended period of historically low rates. There's nothing intrinsically wrong with paying off low interest debt, but it's undisputed that it isn't financially optimal. That's compounded, in your case, by the fact that you cleared low-interest debt and now have to take on much higher interest debt in order to buy a house.

Also, as far as not picking the cheapest child care option available - that's great, and you can afford it. But then you have to adjust your housing budget. It's all about choices.

[Anonymous]

I'm just here to say how crazy it is that payments on a $1.5 Million house are between $9K-10k!. $1.5 Million doesn't even buy you that great of a house in this area, and that is an insane amount of money to be spending on a nice but not THAT nice house every month. I feel for young people that haven't bought their forever home yet.

Interest rates should come down some, so buyers should be able to refinance in the future, but I doubt we will ever see rates in the 2% or 3% range ever again.

[Anonymous]

3-4X gross salary. Maybe reduce by child care cost if it's going to be more than two years.

[Anonymous]

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Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our HHI is in the 450ish range and I would not want a 10k mortgage payment. We live in a 1m dollar home and had a high down payment so our total monthly payment including tax (but excluding insurance) is around 4K.

We make ~$530K, and have a $4100 PITI, and I wouldn't want to double that. Could we do it? Yes. But it would come at the cost of both savings (retirement, college and other) and experiences that we would rather keep in our budget.

At the end of the day, it's all about choices.

I would love to keep it at $4000 but what is that with rates these days, a $700k house? Is that really what people making half a million are buying these days?

Is this OP? How much equity do you have in your current place? I think it's strange you have a full-time nanny, and expensive daycare, and 2+ kids but have just paid off your student loans on $550-600k/year HHI, and are apparently just now getting on the property ladder? Don't get me wrong, I had ~$200k in student loans, but you seem to be doing things in a strange order here.

I think plenty of people making half a million take out mortgages for $700k, yes. That does not mean that's the value of the house they're purchasing.

That was me. We’ve never owned a home. We’ve lived in different cities for various reasons and didn’t want to buy until we knew we would stay. We paid off student loans a few years ago (was just explaining why we haven’t saved enough to make a huge down payment). I’m not sure what you mean by expensive daycare, we need childcare so we do daycare and have a nanny for the baby until she’s older enough for daycare.

Ah you mean 700k mortgage - I agree. I meant a 700k house.

When you already have a full-time nanny, daycare for the older kid is an optional extra expense you've decided to have. A nanny is childcare, and babies can go to daycare. You're choosing the most expensive option for each kid, while and mixing and matching to maximize expense. Based on these facts, it's really hard to believe that 1) your kids will go to public school, and 2) you're "not big spenders."

Aim to spend no more than 1/3 of your take home income on PITI. You have multiple kids to send to college.

OP here. That’s an interesting perspective. I’d think a 3 year old and especially a 4 year old would benefit greatly from the socialization and structure of daycare. I can’t imagine that a nanny could nurture them properly while having their hands full with an infant.

Yes I plan on sending my kids to public school. Childcare isn’t free before then so I pay for it…

Sure. So send the baby to daycare too.

You've made some financially less than optimal decisions, OP. Paying off very low interest student loans rather than saving/investing. Having three kids (I realize that's much more than a financial decision, but is also *is* a financial decision). Don't compound them by extending yourself too far on a house.

Wow, so much judgment and so many assumptions! 1. I have 2 kids. 2. The baby is literally too young for daycare right now as in daycares don’t take babies that young. Plus I don’t just pick the cheapest childcare option possible since I actually care about their well being. 3. You don’t know what the interest on the loans are and I don’t see anything wrong with paying them off and being debt free if you can.

1. You wrote, "I’d think a 3 year old and especially a 4 year old would benefit greatly from the socialization and structure of daycare." Not sure how anyone is supposed to understand that you are talking about one child.
2. If the nanny is such a short-term expense, you shouldn't have included it for consideration.
3. You're right, I don't know the interest rates - what were they? I do know that we are coming out of an extended period of historically low rates. There's nothing intrinsically wrong with paying off low interest debt, but it's undisputed that it isn't financially optimal. That's compounded, in your case, by the fact that you cleared low-interest debt and now have to take on much higher interest debt in order to buy a house.

Fair points. Thanks for the input

[Anonymous]

Anonymous wrote:I'm just here to say how crazy it is that payments on a $1.5 Million house are between $9K-10k!. $1.5 Million doesn't even buy you that great of a house in this area, and that is an insane amount of money to be spending on a nice but not THAT nice house every month. I feel for young people that haven't bought their forever home yet.

Interest rates should come down some, so buyers should be able to refinance in the future, but I doubt we will ever see rates in the 2% or 3% range ever again.

OP here. I know right, I’m not looking to live in a mansion or anything crazy. In the areas we are looking at, 1.5 million gets you a pretty regular looking house.

[Anonymous]

Living in these 1.5 million neighborhoods, even when the houses are pretty regular looking, can get expensive fast.

All of your neighbors drive a luxury (or at least newish) SUV, go to expensive camps and book nice summer vacations, and keep their yards and houses looking good for entertainment. It adds up fast. keep that in mind when extending yourself on the mortgage.

And I know everyone on here will say, "you don't have to do any of those things!" . . . but believe me you will.

We have a PITI of just under 5k and make 750, and it allows for all that spending pretty comfortably, along with savings.

[Anonymous]

Anonymous wrote:I'm just here to say how crazy it is that payments on a $1.5 Million house are between $9K-10k!. $1.5 Million doesn't even buy you that great of a house in this area, and that is an insane amount of money to be spending on a nice but not THAT nice house every month. I feel for young people that haven't bought their forever home yet.

Interest rates should come down some, so buyers should be able to refinance in the future, but I doubt we will ever see rates in the 2% or 3% range ever again.

This is why I expect to see some drops in housing prices in the next year. Yes, even in the “good” neighborhoods. There are not an endless supply of buyers who can afford $9,000/mo payments.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our HHI is in the 450ish range and I would not want a 10k mortgage payment. We live in a 1m dollar home and had a high down payment so our total monthly payment including tax (but excluding insurance) is around 4K.

We make ~$530K, and have a $4100 PITI, and I wouldn't want to double that. Could we do it? Yes. But it would come at the cost of both savings (retirement, college and other) and experiences that we would rather keep in our budget.

At the end of the day, it's all about choices.

I would love to keep it at $4000 but what is that with rates these days, a $700k house? Is that really what people making half a million are buying these days?

Is this OP? How much equity do you have in your current place? I think it's strange you have a full-time nanny, and expensive daycare, and 2+ kids but have just paid off your student loans on $550-600k/year HHI, and are apparently just now getting on the property ladder? Don't get me wrong, I had ~$200k in student loans, but you seem to be doing things in a strange order here.

I think plenty of people making half a million take out mortgages for $700k, yes. That does not mean that's the value of the house they're purchasing.

That was me. We’ve never owned a home. We’ve lived in different cities for various reasons and didn’t want to buy until we knew we would stay. We paid off student loans a few years ago (was just explaining why we haven’t saved enough to make a huge down payment). I’m not sure what you mean by expensive daycare, we need childcare so we do daycare and have a nanny for the baby until she’s older enough for daycare.

Ah you mean 700k mortgage - I agree. I meant a 700k house.

When you already have a full-time nanny, daycare for the older kid is an optional extra expense you've decided to have. A nanny is childcare, and babies can go to daycare. You're choosing the most expensive option for each kid, while and mixing and matching to maximize expense. Based on these facts, it's really hard to believe that 1) your kids will go to public school, and 2) you're "not big spenders."

Aim to spend no more than 1/3 of your take home income on PITI. You have multiple kids to send to college.

OP here. That’s an interesting perspective. I’d think a 3 year old and especially a 4 year old would benefit greatly from the socialization and structure of daycare. I can’t imagine that a nanny could nurture them properly while having their hands full with an infant.

Yes I plan on sending my kids to public school. Childcare isn’t free before then so I pay for it…

Sure. So send the baby to daycare too.

You've made some financially less than optimal decisions, OP. Paying off very low interest student loans rather than saving/investing. Having three kids (I realize that's much more than a financial decision, but is also *is* a financial decision). Don't compound them by extending yourself too far on a house.

Wow, so much judgment and so many assumptions! 1. I have 2 kids. 2. The baby is literally too young for daycare right now as in daycares don’t take babies that young. Plus I don’t just pick the cheapest childcare option possible since I actually care about their well being. 3. You don’t know what the interest on the loans are and I don’t see anything wrong with paying them off and being debt free if you can.

What? Daycare takes babies at least a few weeks old. Not everyone has PTO after babies so, of course they take them young.

[Anonymous]

Anonymous wrote:I'm just here to say how crazy it is that payments on a $1.5 Million house are between $9K-10k!. $1.5 Million doesn't even buy you that great of a house in this area, and that is an insane amount of money to be spending on a nice but not THAT nice house every month. I feel for young people that haven't bought their forever home yet.

Interest rates should come down some, so buyers should be able to refinance in the future, but I doubt we will ever see rates in the 2% or 3% range ever again.

Yep, new houses are being built in my neighborhood and will be selling at that price point. Their backyards/decks will back up to a multi-lane highway (that is planning to be expanded) and sits low and water drain and sits on the lots. It's insane.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm just here to say how crazy it is that payments on a $1.5 Million house are between $9K-10k!. $1.5 Million doesn't even buy you that great of a house in this area, and that is an insane amount of money to be spending on a nice but not THAT nice house every month. I feel for young people that haven't bought their forever home yet.

Interest rates should come down some, so buyers should be able to refinance in the future, but I doubt we will ever see rates in the 2% or 3% range ever again.

OP here. I know right, I’m not looking to live in a mansion or anything crazy. In the areas we are looking at, 1.5 million gets you a pretty regular looking house.

Time to change the bolded then if you can't afford it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our HHI is in the 450ish range and I would not want a 10k mortgage payment. We live in a 1m dollar home and had a high down payment so our total monthly payment including tax (but excluding insurance) is around 4K.

We make ~$530K, and have a $4100 PITI, and I wouldn't want to double that. Could we do it? Yes. But it would come at the cost of both savings (retirement, college and other) and experiences that we would rather keep in our budget.

At the end of the day, it's all about choices.

I would love to keep it at $4000 but what is that with rates these days, a $700k house? Is that really what people making half a million are buying these days?

Is this OP? How much equity do you have in your current place? I think it's strange you have a full-time nanny, and expensive daycare, and 2+ kids but have just paid off your student loans on $550-600k/year HHI, and are apparently just now getting on the property ladder? Don't get me wrong, I had ~$200k in student loans, but you seem to be doing things in a strange order here.

I think plenty of people making half a million take out mortgages for $700k, yes. That does not mean that's the value of the house they're purchasing.

That was me. We’ve never owned a home. We’ve lived in different cities for various reasons and didn’t want to buy until we knew we would stay. We paid off student loans a few years ago (was just explaining why we haven’t saved enough to make a huge down payment). I’m not sure what you mean by expensive daycare, we need childcare so we do daycare and have a nanny for the baby until she’s older enough for daycare.

Ah you mean 700k mortgage - I agree. I meant a 700k house.

When you already have a full-time nanny, daycare for the older kid is an optional extra expense you've decided to have. A nanny is childcare, and babies can go to daycare. You're choosing the most expensive option for each kid, while and mixing and matching to maximize expense. Based on these facts, it's really hard to believe that 1) your kids will go to public school, and 2) you're "not big spenders."

Aim to spend no more than 1/3 of your take home income on PITI. You have multiple kids to send to college.

OP here. That’s an interesting perspective. I’d think a 3 year old and especially a 4 year old would benefit greatly from the socialization and structure of daycare. I can’t imagine that a nanny could nurture them properly while having their hands full with an infant.

Yes I plan on sending my kids to public school. Childcare isn’t free before then so I pay for it…

Sure. So send the baby to daycare too.

You've made some financially less than optimal decisions, OP. Paying off very low interest student loans rather than saving/investing. Having three kids (I realize that's much more than a financial decision, but is also *is* a financial decision). Don't compound them by extending yourself too far on a house.

Wow, so much judgment and so many assumptions! 1. I have 2 kids. 2. The baby is literally too young for daycare right now as in daycares don’t take babies that young. Plus I don’t just pick the cheapest childcare option possible since I actually care about their well being. 3. You don’t know what the interest on the loans are and I don’t see anything wrong with paying them off and being debt free if you can.

What? Daycare takes babies at least a few weeks old. Not everyone has PTO after babies so, of course they take them young.

I’ve never seen that. Also I would not trust a daycare to take care of a newborn.

[Anonymous]

Anonymous wrote:Living in these 1.5 million neighborhoods, even when the houses are pretty regular looking, can get expensive fast.

All of your neighbors drive a luxury (or at least newish) SUV, go to expensive camps and book nice summer vacations, and keep their yards and houses looking good for entertainment. It adds up fast. keep that in mind when extending yourself on the mortgage.

And I know everyone on here will say, "you don't have to do any of those things!" . . . but believe me you will.

We have a PITI of just under 5k and make 750, and it allows for all that spending pretty comfortably, along with savings.

Did you still get a nice house in a good location, though? I’d have to sacrifice like crazy on the house or location/schools to get to that low of a PITI at current rates.

Hm, is there really peer pressure from random neighbors to send your kids to expensive camps and go on nice summer vacations? If they were my kids’ classmates, maybe, but neighbors in the suburbs?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our HHI is in the 450ish range and I would not want a 10k mortgage payment. We live in a 1m dollar home and had a high down payment so our total monthly payment including tax (but excluding insurance) is around 4K.

We make ~$530K, and have a $4100 PITI, and I wouldn't want to double that. Could we do it? Yes. But it would come at the cost of both savings (retirement, college and other) and experiences that we would rather keep in our budget.

At the end of the day, it's all about choices.

I would love to keep it at $4000 but what is that with rates these days, a $700k house? Is that really what people making half a million are buying these days?

Is this OP? How much equity do you have in your current place? I think it's strange you have a full-time nanny, and expensive daycare, and 2+ kids but have just paid off your student loans on $550-600k/year HHI, and are apparently just now getting on the property ladder? Don't get me wrong, I had ~$200k in student loans, but you seem to be doing things in a strange order here.

I think plenty of people making half a million take out mortgages for $700k, yes. That does not mean that's the value of the house they're purchasing.

That was me. We’ve never owned a home. We’ve lived in different cities for various reasons and didn’t want to buy until we knew we would stay. We paid off student loans a few years ago (was just explaining why we haven’t saved enough to make a huge down payment). I’m not sure what you mean by expensive daycare, we need childcare so we do daycare and have a nanny for the baby until she’s older enough for daycare.

Ah you mean 700k mortgage - I agree. I meant a 700k house.

When you already have a full-time nanny, daycare for the older kid is an optional extra expense you've decided to have. A nanny is childcare, and babies can go to daycare. You're choosing the most expensive option for each kid, while and mixing and matching to maximize expense. Based on these facts, it's really hard to believe that 1) your kids will go to public school, and 2) you're "not big spenders."

Aim to spend no more than 1/3 of your take home income on PITI. You have multiple kids to send to college.

OP here. That’s an interesting perspective. I’d think a 3 year old and especially a 4 year old would benefit greatly from the socialization and structure of daycare. I can’t imagine that a nanny could nurture them properly while having their hands full with an infant.

Yes I plan on sending my kids to public school. Childcare isn’t free before then so I pay for it…

Sure. So send the baby to daycare too.

You've made some financially less than optimal decisions, OP. Paying off very low interest student loans rather than saving/investing. Having three kids (I realize that's much more than a financial decision, but is also *is* a financial decision). Don't compound them by extending yourself too far on a house.

Wow, so much judgment and so many assumptions! 1. I have 2 kids. 2. The baby is literally too young for daycare right now as in daycares don’t take babies that young. Plus I don’t just pick the cheapest childcare option possible since I actually care about their well being. 3. You don’t know what the interest on the loans are and I don’t see anything wrong with paying them off and being debt free if you can.

What? Daycare takes babies at least a few weeks old. Not everyone has PTO after babies so, of course they take them young.

I’ve never seen that. Also I would not trust a daycare to take care of a newborn.

You’ve never seen a Bright Horizons or KinderCare? Both start at 6 weeks.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our HHI is in the 450ish range and I would not want a 10k mortgage payment. We live in a 1m dollar home and had a high down payment so our total monthly payment including tax (but excluding insurance) is around 4K.

We make ~$530K, and have a $4100 PITI, and I wouldn't want to double that. Could we do it? Yes. But it would come at the cost of both savings (retirement, college and other) and experiences that we would rather keep in our budget.

At the end of the day, it's all about choices.

I would love to keep it at $4000 but what is that with rates these days, a $700k house? Is that really what people making half a million are buying these days?

Is this OP? How much equity do you have in your current place? I think it's strange you have a full-time nanny, and expensive daycare, and 2+ kids but have just paid off your student loans on $550-600k/year HHI, and are apparently just now getting on the property ladder? Don't get me wrong, I had ~$200k in student loans, but you seem to be doing things in a strange order here.

I think plenty of people making half a million take out mortgages for $700k, yes. That does not mean that's the value of the house they're purchasing.

That was me. We’ve never owned a home. We’ve lived in different cities for various reasons and didn’t want to buy until we knew we would stay. We paid off student loans a few years ago (was just explaining why we haven’t saved enough to make a huge down payment). I’m not sure what you mean by expensive daycare, we need childcare so we do daycare and have a nanny for the baby until she’s older enough for daycare.

Ah you mean 700k mortgage - I agree. I meant a 700k house.

When you already have a full-time nanny, daycare for the older kid is an optional extra expense you've decided to have. A nanny is childcare, and babies can go to daycare. You're choosing the most expensive option for each kid, while and mixing and matching to maximize expense. Based on these facts, it's really hard to believe that 1) your kids will go to public school, and 2) you're "not big spenders."

Aim to spend no more than 1/3 of your take home income on PITI. You have multiple kids to send to college.

OP here. That’s an interesting perspective. I’d think a 3 year old and especially a 4 year old would benefit greatly from the socialization and structure of daycare. I can’t imagine that a nanny could nurture them properly while having their hands full with an infant.

Yes I plan on sending my kids to public school. Childcare isn’t free before then so I pay for it…

Sure. So send the baby to daycare too.

You've made some financially less than optimal decisions, OP. Paying off very low interest student loans rather than saving/investing. Having three kids (I realize that's much more than a financial decision, but is also *is* a financial decision). Don't compound them by extending yourself too far on a house.

Wow, so much judgment and so many assumptions! 1. I have 2 kids. 2. The baby is literally too young for daycare right now as in daycares don’t take babies that young. Plus I don’t just pick the cheapest childcare option possible since I actually care about their well being. 3. You don’t know what the interest on the loans are and I don’t see anything wrong with paying them off and being debt free if you can.

What? Daycare takes babies at least a few weeks old. Not everyone has PTO after babies so, of course they take them young.

I’ve never seen that. Also I would not trust a daycare to take care of a newborn.

You’ve never seen a Bright Horizons or KinderCare? Both start at 6 weeks.

Oh my bad

[Anonymous]

Anonymous wrote:

Anonymous wrote:Living in these 1.5 million neighborhoods, even when the houses are pretty regular looking, can get expensive fast.

All of your neighbors drive a luxury (or at least newish) SUV, go to expensive camps and book nice summer vacations, and keep their yards and houses looking good for entertainment. It adds up fast. keep that in mind when extending yourself on the mortgage.

And I know everyone on here will say, "you don't have to do any of those things!" . . . but believe me you will.

We have a PITI of just under 5k and make 750, and it allows for all that spending pretty comfortably, along with savings.

Did you still get a nice house in a good location, though? I’d have to sacrifice like crazy on the house or location/schools to get to that low of a PITI at current rates.

Hm, is there really peer pressure from random neighbors to send your kids to expensive camps and go on nice summer vacations? If they were my kids’ classmates, maybe, but neighbors in the suburbs?

We bought a house for $1 million, renovated with cash, and it's now worth ~1.4 Love the neighborhood. We also love our neighbors, but the lifestyle creep is real! If it's a good neighborhood, "random neighbors" will become your friends.