At what point would a $6000 monthly mortgage make sense?

[Anonymous]

We'll have a $3800 PITI mortgage in the next few months with a HHI of 235K (plus bonuses that I'm not including). I don't anticipate it being too difficult as we currently save 3500/month while paying our current mortgage of $1500. We also have student loan payments (law school), car notes, don't sacrifice eating out and occasional splurges, and max out 401(k)/pensions.

I think some people are excessively cautious, but to each their own.

[Anonymous]

Only if either my DH or myself could make the payment by ourselves, it not, forget it. We live in a 2,000 sq ft. home with no mortgage and why? Because if one of us lost our jobs, we wouldn't be homeless. And guess what? My DH was laid off in '08 and our lifestyle didn't change, I continued working part-time and our DC is in private school. Why can't ppl think smart these days?

[Anonymous]

You know what ages someone fast? Financial problems! Live smart and be wrinkle free!!!

[Anonymous]

Anonymous wrote:Only if either my DH or myself could make the payment by ourselves, it not, forget it. We live in a 2,000 sq ft. home with no mortgage and why? Because if one of us lost our jobs, we wouldn't be homeless. And guess what? My DH was laid off in '08 and our lifestyle didn't change, I continued working part-time and our DC is in private school. Why can't ppl think smart these days?

What makes you smart? Some would say paying for private school would not be smart. Get off your high horse.

[Anonymous]

Anonymous wrote:if I lose my job I am screwed at any mortgage price eventually. Of course you need 6-12 months in savings. Duh.

I'd much rather have a highly leveraged asset worth $1M appreciating than one worth $500K.

The poster who needs $25K TAKE HOME (after tax) to pay a $6K mtg is the dumbest person who posts here.

You are assuming that your house will maintain its value. I know of many people who purchased a house and when the housing market crashed, are now upside down in their loans. DH's former boss is in a large house he cannot afford (b/c of divorce) and he stopped paying. They will eventually foreclose on him, but he's still living there. He can't get anyone to buy it b/c it's an expensive home. (Not the most expensive, but people just can't afford it in my area.)

[Anonymous]

Anonymous wrote:Only if either my DH or myself could make the payment by ourselves, it not, forget it. We live in a 2,000 sq ft. home with no mortgage and why? Because if one of us lost our jobs, we wouldn't be homeless. And guess what? My DH was laid off in '08 and our lifestyle didn't change, I continued working part-time and our DC is in private school. Why can't ppl think smart these days?

how is paying for private school smart? that's, like, the stupidest thing ever.

[Anonymous]

Anonymous wrote:

Anonymous wrote:if I lose my job I am screwed at any mortgage price eventually. Of course you need 6-12 months in savings. Duh.

I'd much rather have a highly leveraged asset worth $1M appreciating than one worth $500K.

The poster who needs $25K TAKE HOME (after tax) to pay a $6K mtg is the dumbest person who posts here.

You are assuming that your house will maintain its value. I know of many people who purchased a house and when the housing market crashed, are now upside down in their loans. DH's former boss is in a large house he cannot afford (b/c of divorce) and he stopped paying. They will eventually foreclose on him, but he's still living there. He can't get anyone to buy it b/c it's an expensive home. (Not the most expensive, but people just can't afford it in my area.)

right, because housing prices, with 75 years of data, don't appreciate on average. Not talking about holding a house for 5 years, talking about holding it 15 years +.

[Anonymous]

Anonymous wrote:Only if either my DH or myself could make the payment by ourselves, it not, forget it. We live in a 2,000 sq ft. home with no mortgage and why? Because if one of us lost our jobs, we wouldn't be homeless. And guess what? My DH was laid off in '08 and our lifestyle didn't change, I continued working part-time and our DC is in private school. Why can't ppl think smart these days?

You know, a lot depends on how worried you are about losing your job. My husband's job is pretty close to 100% secure (really, tenured professor) and we have lots of disability and life insurance. So him losing his income is just not something we factor in the way I used to (for myself) when I worked at a tech startup.

Don't be so obnoxious and presumptuous -- the OP said nothing about their life situation in this regard.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Only if either my DH or myself could make the payment by ourselves, it not, forget it. We live in a 2,000 sq ft. home with no mortgage and why? Because if one of us lost our jobs, we wouldn't be homeless. And guess what? My DH was laid off in '08 and our lifestyle didn't change, I continued working part-time and our DC is in private school. Why can't ppl think smart these days?

You know, a lot depends on how worried you are about losing your job. My husband's job is pretty close to 100% secure (really, tenured professor) and we have lots of disability and life insurance. So him losing his income is just not something we factor in the way I used to (for myself) when I worked at a tech startup.

Don't be so obnoxious and presumptuous -- the OP said nothing about their life situation in this regard.

You're most likely jealous because you're most likely in hock up to your eyeballs in mortgage payments. Life happens, and no one is exempt - it's not presumptuous to plan for the future, which is UNKNOWN.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Only if either my DH or myself could make the payment by ourselves, it not, forget it. We live in a 2,000 sq ft. home with no mortgage and why? Because if one of us lost our jobs, we wouldn't be homeless. And guess what? My DH was laid off in '08 and our lifestyle didn't change, I continued working part-time and our DC is in private school. Why can't ppl think smart these days?

What makes you smart? Some would say paying for private school would not be smart. Get off your high horse.

I will not.

[Anonymous]

Anonymous wrote:We are looking to buy for the first time. We have no property to sell to roll into our down payment. Looking in the $1.1-1.3 range so we can buy one time and be done with moving (therefore skipping the "starter home"). With 20% or a bit more down, that still means a $6k monthly mortgage. Is that crazy?? Our rent is $4400/month.

Thoughts?

I don't understand why you want to skip the "starter home." Say your "starter home" mortgage would be $4K a month (still a huge amount!) and you'd live there for 5 years. That's $120,000 you'd save in mortgage payments over 5 years. Subtract out the cost of moving and transaction costs of buying, you're still looking at wasting a lot of money--I'd guess at least $80K. And, if your "starter home" would involve a shorter commute, you are also buying yourself who knows how many hours/days/weeks/months of personal time, happiness, and health because you will spend less of your precious time in the car.

[Anonymous]

This is the only question that matters:

How quickly can you replace your high income?

Depending on the answer to that, you have your answer on the 6k mortgage. Everything else is irrelevant.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are looking to buy for the first time. We have no property to sell to roll into our down payment. Looking in the $1.1-1.3 range so we can buy one time and be done with moving (therefore skipping the "starter home"). With 20% or a bit more down, that still means a $6k monthly mortgage. Is that crazy?? Our rent is $4400/month.

Thoughts?

I don't understand why you want to skip the "starter home." Say your "starter home" mortgage would be $4K a month (still a huge amount!) and you'd live there for 5 years. That's $120,000 you'd save in mortgage payments over 5 years. Subtract out the cost of moving and transaction costs of buying, you're still looking at wasting a lot of money--I'd guess at least $80K. And, if your "starter home" would involve a shorter commute, you are also buying yourself who knows how many hours/days/weeks/months of personal time, happiness, and health because you will spend less of your precious time in the car.

horrible advice.

1. using your assumptions, the $112K would be part principal.
2. the value of the tradeup home likely appreciated $100K during those 5 years!
3. the costs of moving are higher than you estimated.
4. the other costs of moving - emotional and impact on kids.

[Anonymous]

Wow, I guess some of you think none with one income should ever buy a home! We are duel income but get a grip.

[Anonymous]

Anonymous wrote:Wow, I guess some of you think none with one income should ever buy a home! We are duel income but get a grip.

No one with one income should buy a home with a $6,000 mortgage.