HHI 200K - how much house can/should we afford

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are going through the same process, with just about the same HHI. We currently live in Arlington, but we're moving to Potomac. One of us works in VA, the other MD, so we were trying to split the commute. We're looking at $700-725k with 20% down. We have one car payment, and one kid in a nanny share which combined costs $2,000/month (but we don't pay for child care in the summer). We will have a cash cushion when it's all said and done, but it will be hard to add to significantly for a few years. We both have steady and secure jobs.

To be frank it's a little more than I feel comfortable with, but with the areas that make sense for our commute there was nothing desirable for less than that. We both grew up in MoCo and we expect to be in this house for a while. There are definitely areas that we can cut back on if it came to that.

Have you looked at McLean or West Falls Church?

Falls Church/Vienna is to far for the MD commute (not a significant time savings from Arlington). We looked at McLean but the inventory available in our range left a lot to be desired. Most need some significant work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:But what PPs have said is correct -- everyone's threshold for what percentage of take-home they are willing to spend on mortgage is different.

Right. I would have no problem spending $4900 a month of a 200K HHI for the first year after I purchase the house (the childcare cost is going away in one year, I think?), if it was a house I was happy with. Particularly when there is a large tax benefit to the mortgage during the first few years of the loan and where home-ownership is one component of a long-term savings strategy.

Home ownership provides a place to live. Relying on it as a savings strategy is outdated.

+1

See the "Are We Stuck?" thread in the Money forum, for a cautionary tale.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:But what PPs have said is correct -- everyone's threshold for what percentage of take-home they are willing to spend on mortgage is different.

Right. I would have no problem spending $4900 a month of a 200K HHI for the first year after I purchase the house (the childcare cost is going away in one year, I think?), if it was a house I was happy with. Particularly when there is a large tax benefit to the mortgage during the first few years of the loan and where home-ownership is one component of a long-term savings strategy.

Home ownership provides a place to live. Relying on it as a savings strategy is outdated.

+1

See the "Are We Stuck?" thread in the Money forum, for a cautionary tale.

No you moron , completely different time and they do private.

[Anonymous]

Anonymous wrote:you can afford whatever you want. Being over conservative is different than what you can afford.

I agree
with this HHI - it is really a matter of personal preferences and priorities. Yes, you can't afford it all, and have to make some compromises.

With similar HHI and less cash we bought a house for 780K (and would need to add some more into renovation), but we do not max out our 401K
We have 3 kids, need a lot of space and good schools, so it is my choice - to live comfortably now and worry about retirement later. Might not be the best choice, but I'm ok with it.
Just my 2 cents.

[Anonymous]

Anonymous wrote:

Anonymous wrote:you can afford whatever you want. Being over conservative is different than what you can afford.

I agree
with this HHI - it is really a matter of personal preferences and priorities. Yes, you can't afford it all, and have to make some compromises.

With similar HHI and less cash we bought a house for 780K (and would need to add some more into renovation), but we do not max out our 401K
We have 3 kids, need a lot of space and good schools, so it is my choice - to live comfortably now and worry about retirement later. Might not be the best choice, but I'm ok with it.
Just my 2 cents.

I agree. Op here. We are willing to compromise on size of house and perhaps aesthetic updates, for good schools but not too much need for structural modifications and upkeep (like a fixer upper). Thanks everyone for weighing in

[Anonymous]

Anonymous wrote:Wrong place to ask, OP. Everyone on here is freakishly conservative. You can't buy shit for 500k.

You're a dumb ass. It was only in 2008 when the market crashed and everyone was blaming the Wall Street. Guess what, people are at it again. People are getting mortgages that they cannot afford and you think that a prudent advice is "freakishly conservative. You are an example of how some do not learned from mistakes and are destined to be poor.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Wrong place to ask, OP. Everyone on here is freakishly conservative. You can't buy shit for 500k.

You're a dumb ass. It was only in 2008 when the market crashed and everyone was blaming the Wall Street. Guess what, people are at it again. People are getting mortgages that they cannot afford and you think that a prudent advice is "freakishly conservative. You are an example of how some do not learned from mistakes and are destined to be poor.

being too conservative can be just as bad for your longterm wealth

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Wrong place to ask, OP. Everyone on here is freakishly conservative. You can't buy shit for 500k.

You're a dumb ass. It was only in 2008 when the market crashed and everyone was blaming the Wall Street. Guess what, people are at it again. People are getting mortgages that they cannot afford and you think that a prudent advice is "freakishly conservative. You are an example of how some do not learned from mistakes and are destined to be poor.

being too conservative can be just as bad for your longterm wealth

Do you not learned anything from the Wall Street?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Wrong place to ask, OP. Everyone on here is freakishly conservative. You can't buy shit for 500k.

You're a dumb ass. It was only in 2008 when the market crashed and everyone was blaming the Wall Street. Guess what, people are at it again. People are getting mortgages that they cannot afford and you think that a prudent advice is "freakishly conservative. You are an example of how some do not learned from mistakes and are destined to be poor.

You stupid bro? The non verified income loans with balloons , interest only resets and 100 to 125% financing were the problem. The loans offered today are completely different. Also it's not some house cleaner with 30k income getting a 500k house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Wrong place to ask, OP. Everyone on here is freakishly conservative. You can't buy shit for 500k.

You're a dumb ass. It was only in 2008 when the market crashed and everyone was blaming the Wall Street. Guess what, people are at it again. People are getting mortgages that they cannot afford and you think that a prudent advice is "freakishly conservative. You are an example of how some do not learned from mistakes and are destined to be poor.

being too conservative can be just as bad for your longterm wealth

I did - not to put to much into 401K - I live now and need my money now; can't afford to lose it due to some market crash
So, I invest in my children and my house, at least I can enjoy it Pile of cash does not make me happy as glass of wine on my own backyard watching kids playing ball
I'm a dumbass I guess

Do you not learned anything from the Wall Street?

[Anonymous]

/\/\ something wrong with my quote

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:But what PPs have said is correct -- everyone's threshold for what percentage of take-home they are willing to spend on mortgage is different.

Right. I would have no problem spending $4900 a month of a 200K HHI for the first year after I purchase the house (the childcare cost is going away in one year, I think?), if it was a house I was happy with. Particularly when there is a large tax benefit to the mortgage during the first few years of the loan and where home-ownership is one component of a long-term savings strategy.

Home ownership provides a place to live. Relying on it as a savings strategy is outdated.

+1

See the "Are We Stuck?" thread in the Money forum, for a cautionary tale.

No you moron , completely different time and they do private.

[Anonymous]

My opinion--you're still young. Do you expect your HHI to increase significantly in the next few years? Significantly meaning 50 or 100k. If so, then buy what you can afford today without erring on the too conservative side. Selling and upgrading your house is very costly, due to transaction costs and small amount of equity you gain the first few years.

We bought our first house at your age with the same HHI. It was $500k, 20% down. We would have felt very stretched any higher. (Back then, interest rates were higher and it was nearly $3000/mo.) Now we make $350k and have a $750k house. Again that's what we can comfortably afford with two kids, if we want to save enough for retirement.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Wrong place to ask, OP. Everyone on here is freakishly conservative. You can't buy shit for 500k.

You're a dumb ass. It was only in 2008 when the market crashed and everyone was blaming the Wall Street. Guess what, people are at it again. People are getting mortgages that they cannot afford and you think that a prudent advice is "freakishly conservative. You are an example of how some do not learned from mistakes and are destined to be poor.

being too conservative can be just as bad for your longterm wealth

I did - not to put to much into 401K - I live now and need my money now; can't afford to lose it due to some market crash
So, I invest in my children and my house, at least I can enjoy it Pile of cash does not make me happy as glass of wine on my own backyard watching kids playing ball
I'm a dumbass I guess

Do you not learned anything from the Wall Street?

i hope you love your job, because you ain't retiring. but at least you are enjoying (spending) your money as you earn it

[Anonymous]

Anonymous wrote:We were in a similar position. Although we could have afforded a small house in Bethesda, we chose to buy in Silver Spring. My kids went to high school in the Northeast Consortium (Springbrook, Blake, Paint Branch) and got into very good colleges. They are now in their early and mid-20s, employed in jobs in their chosen fields, paying their own rent (not living in my basement!) and self supporting. I've talked to them about it and they think they benefitted from going to schools with very diverse populations. They know they benefitted by the fact that we were able to save enough money for their college education that they did not need to take out any loans.

If we had moved to Bethesda (which we seriously considered) I think there would have been more pressure on us to spend money on fancier clothes, technology, extra-curricular activities, etc. as they were growing up. Additionally, we would have paid more for housing. We certainly would have saved less money.

You can get a very good house in the Northeast Consortium area for $500,000. All the high schools offer A.P. classes and everything else your child needs to get into a good college. It is Montgomery County! Top students from these high schools get into Ivy League and similar colleges every year. Yes, there are fewer kids going to the top colleges than from BCC or Walter Johnson, but I think that may make it easier for your kid (assuming he or she is a top student) to stand out and get accepted. There is a limit to the number of students that any college is going to take from a given high school.

My house is almost paid off, my husband and I are maximizing our contributions to our retirement accounts, we have significant savings outside of retirement accounts, and our kids won't have to worry about supporting us when we get old. There are lots of benefits to living below your means. If you haven't read it, I recommend "The Millionaire Nextdoor." The book is somewhat out of date but the basic message still applies. I don't think anyone looking at us and where we live would think that our net worth is as high as it is and that is fine with me.

I like you.