Anyone at $330K HHI have a mortgage that is $4900/month (37% of net pay / 17% of gross)?

[Anonymous]

At one time, we DID have that income (well close to it around $310,000). My husband and I tend to be a little conservative and cautious - so we REFUSED to take out a loan that we were stretching ourselves on. We decided to go for something that we could afford on HALF our income (in case something was to happen to either one of us). Our mortgage was around $3900 (roughly) plus HOA fees. Two years into it, I got laid off. I was out of work for 9 months and when I went back to work I was underemployed. We survived and had zero late payments. Our income for a couple of years hovered around the $150-$175 range. We are now around $225 - heading up to $250 here.

- You have been unable to save money on your own.
- You are stretching yourself with track record of setting aside the 'extra'
- You are assuming an Aupair will reduce your child care costs- with no track record there
- You are relying on Grandparents to help out
- You have credit card debt that you have not been able or willing to pay down

It would be wise to either lower your expectations or take a break from the house search and realistically try to set aside the money (the cost difference between your current mortgage and what your new mortgage will be) for a year. If you can do that, you can apply that money to the cc debt AND to a down payment. If you are unable or unwilling to, then maybe you aren't ready to extend yourself so much.

[Anonymous]

Anonymous wrote:OP here again. I posted this question several months ago, and some responders said it was do-able to have a mortgage of $4900/month (with $330K HHI), and others warned that it would leave us feeling house poor and cash strapped.

We've been looking for houses in a lower price range, but didn't find anything worth moving to. Now a house has come onto the market that would be a good fit for us (within our school district and with more space and a street with nice trees and no cut-through traffic.) I really want to bid on the house, and DH is a bit reluctant, but OK too.

Any more thoughts from people with an HHI of $330K (two full-time working parents)? The mortgage would be $850K – which would be 37% of net pay (and 17% of gross pay).

Thank you!

You need to drop this whole plan. You managed to rack up CC debt despite having high income, low mortgage, and help from your grandparents.

You blamed your 'active' DH for part of those costs, but whatever, money is fungible and I'm sure you were party to the overspending.

But when you buy this very expensive house, and your DH *HAS* to cut out the things he values despite voicing opposition to splurging like this, you will have real troubles, financial and marital.

[Anonymous]

so... it's been 6 months, so the CC debt is done, right?

[Anonymous]

Anonymous wrote:At one time, we DID have that income (well close to it around $310,000). My husband and I tend to be a little conservative and cautious - so we REFUSED to take out a loan that we were stretching ourselves on. We decided to go for something that we could afford on HALF our income (in case something was to happen to either one of us). Our mortgage was around $3900 (roughly) plus HOA fees. Two years into it, I got laid off. I was out of work for 9 months and when I went back to work I was underemployed. We survived and had zero late payments. Our income for a couple of years hovered around the $150-$175 range. We are now around $225 - heading up to $250 here.

- You have been unable to save money on your own.
- You are stretching yourself with track record of setting aside the 'extra'
- You are assuming an Aupair will reduce your child care costs- with no track record there
- You are relying on Grandparents to help out
- You have credit card debt that you have not been able or willing to pay down

It would be wise to either lower your expectations or take a break from the house search and realistically try to set aside the money (the cost difference between your current mortgage and what your new mortgage will be) for a year. If you can do that, you can apply that money to the cc debt AND to a down payment. If you are unable or unwilling to, then maybe you aren't ready to extend yourself so much.

Meant to say you are stretching yourself with NO track record of setting aside the extra.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here again. I posted this question several months ago, and some responders said it was do-able to have a mortgage of $4900/month (with $330K HHI), and others warned that it would leave us feeling house poor and cash strapped.

We've been looking for houses in a lower price range, but didn't find anything worth moving to. Now a house has come onto the market that would be a good fit for us (within our school district and with more space and a street with nice trees and no cut-through traffic.) I really want to bid on the house, and DH is a bit reluctant, but OK too.

Any more thoughts from people with an HHI of $330K (two full-time working parents)? The mortgage would be $850K – which would be 37% of net pay (and 17% of gross pay).

Thank you!

You need to drop this whole plan. You managed to rack up CC debt despite having high income, low mortgage, and help from your grandparents.

You blamed your 'active' DH for part of those costs, but whatever, money is fungible and I'm sure you were party to the overspending.

But when you buy this very expensive house, and your DH *HAS* to cut out the things he values despite voicing opposition to splurging like this, you will have real troubles, financial and marital.

+1,000

As someone who has felt house poor, never ever ever again. I replied to this thread 8 months ago and stand by what I said then (I was the first reply).

[Anonymous]

I would not. We have a similar income but approx 30k is in the form of a bonus. I refuse to have a mortgage that requites more than one income to live. I also want to decorate my home well, invest in the market, travel and wear nice clothes. Oh and eventuakly kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:no worries, it's obvious that grandparents are loaded (500k college fund gift!). they are banking on mad inheritance, otherwise why would he be treading water as a fed while she stays home and racks up debt? it's all play money to them, b/c in the end they'll be able to kick back. I'm guessing DW parents who have money, and DH reluctant to stretch now for bigger house hence she is trying to get a chorus of support that it is reasonable from DCUM.

OP here. We're definitely not banking on an inheritance. Grandparents have made it clear that the college funds and the occasional annual gift are what we can expect to get. We have no clue what their assets are but they live pretty frugally (except for a nice vacation each year), and neither my DH nor I realized that they had much money until they gave us the college money for the kids about 5-8 years ago. We both grew up middle class.

DH and I would do anything to avoid asking the grandparents for money in a pinch because the grandparents would think we were pathetic because we have good educations and should be able to make enough money to support ourselves. So that's not an option -- we really need an emergency fund.

PP here, then you have to really batten down and get things in line b/c acquiring 10k in credit card debt in your crazy. You should table this house upgrade plan until you have been working a few years, have fat emergency fund, and KNOW you can live within your means.

Why would you need an emergency fund in the case of feds

Fed spouse has serious illness ... uses up all sick and annual leave and goes on leave without pay ... grandparents have said they're not the emergency fund to cover that according to OP. If Fed spouse has to quit job due to illness or disability there's no assurance of getting a disability retirement and HHI is now cut nearly in half.

That's just one of any number of scenarios that can come into play.

The credit card debt situation alone plus lack of non=retirement investment and savings is a red flag to me.

Why do people talk about shit they don't know about? Feds have disability once their pension is vested.

[Anonymous]

Anonymous wrote:We pay $1600 on $300k, and are going up to $2600. That's excluding taxes (not sure if you are counting taxes?) which will bring us to $3300 or so if you include.

We also have a childcare on the order of $50k per annum. I hate going up by $1,000 a month, but figure even a modest increase in comp can cover the incremental expenses.

Your numbers would make me a bit nervous - that's just a massive increase. Frankly though, depends a lot on what you save too. We save about $30k in 401k, another $4000 a month in regular savings, have about $1.8M in assets (less mortgage) and no other debt, so $1,000 a month feels reasonable. Look at the whole picture of your finances (ages, 529 etc)

The other extreme is this poster. The ridiculous hand wringing over a 1k increase with 1.8 million. It is kind of nauseating and I make
more than this poster.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We pay $1600 on $300k, and are going up to $2600. That's excluding taxes (not sure if you are counting taxes?) which will bring us to $3300 or so if you include.

We also have a childcare on the order of $50k per annum. I hate going up by $1,000 a month, but figure even a modest increase in comp can cover the incremental expenses.

Your numbers would make me a bit nervous - that's just a massive increase. Frankly though, depends a lot on what you save too. We save about $30k in 401k, another $4000 a month in regular savings, have about $1.8M in assets (less mortgage) and no other debt, so $1,000 a month feels reasonable. Look at the whole picture of your finances (ages, 529 etc)

The other extreme is this poster. The ridiculous hand wringing over a 1k increase with 1.8 million. It is kind of nauseating and I make
more than this poster.

But I'm not hand wringing.... I'm going up by $1,000 and I'm ok with it - I'm not enamored with it (given the choice, better not to obviously), but I'm doing it because it's not a major amount given the other factors. My point was for the OP to look at the whole picture: absent the $1.8 context a $1,000 increase might be viewed as more risky, in light of it though, as you aptly put it, debating the $1k is nauseatingly stupid. Something similar is probably true for OP.

[Anonymous]

Anonymous wrote:Your DH won't get 1% of salary for each year, he'll get 1% of his high-3 yrs under current law.

I guarantee you that the federal retirement system will be changed to the detriment of future retirees before he retires so you should discount any prediction of his retirement benefit accordingly.

Just want to point out that once he passes 20 year service mark, he will get 1.1%, not 1%. So in truth, his pension will be 1.1% x number of years x high-3 or high 5 or whatever the law changes to.

[Anonymous]

Anonymous wrote:We pay $1600 on $300k, and are going up to $2600. That's excluding taxes (not sure if you are counting taxes?) which will bring us to $3300 or so if you include.

We also have a childcare on the order of $50k per annum. I hate going up by $1,000 a month, but figure even a modest increase in comp can cover the incremental expenses.

Your numbers would make me a bit nervous - that's just a massive increase. Frankly though, depends a lot on what you save too. We save about $30k in 401k, another $4000 a month in regular savings, have about $1.8M in assets (less mortgage) and no other debt, so $1,000 a month feels reasonable. Look at the whole picture of your finances (ages, 529 etc)

I did $2500 on 180k, with 1 kid in daycare and maxed out my 401k to the federal limits every year without stretching. Your childcare expenses are high.

His figures aren't unreasonable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Your DH won't get 1% of salary for each year, he'll get 1% of his high-3 yrs under current law.

I guarantee you that the federal retirement system will be changed to the detriment of future retirees before he retires so you should discount any prediction of his retirement benefit accordingly.

Just want to point out that once he passes 20 year service mark, he will get 1.1%, not 1%. So in truth, his pension will be 1.1% x number of years x high-3 or high 5 or whatever the law changes to.

The law will not change for vested employees. It just won't. The amount you need to contribute for new hires has already gone up
significantly under the Obama administration but neither party is going to mess with the vested. It would be political suicide.

[Anonymous]

I am one of the PP's.

To me this has nothing to do with the disability/non-disability side of things - that seems to really be derailing things.

The main point that I see is that while you TECHNICALLY could get approved for that, should you go for it. You are trying to jump in to a very expensive mortgage payment and a very large increase - with no history of being able to set aside the money. You mentioned that you posted about this 6 months ago. In the past 6 months have you set aside the difference between what your new mortgage will be and what your current mortgage is?

[Anonymous]

Op, I think that your husband is right (to not want to rush into the house) and that you need to step back. Do you still have credit card debt? Do you have more than $10,000 in cash? Every time I've purchased a house (4 times), I've shelled out a ton of cash to do things around the house, buy things (and that includes when I bought new construction). You are presumably moving to a much bigger house. Do you have enough furniture? Are you going to rack up more credit card debt to buy it? Not smart. And you think that your family is going to be happy hanging around the big house instead of taking vacations? You'll be racking up more credit card debt. You need an emergency fund and a fund for the house stuff before you can even think of purchasing. One more point, you are also banking on the cost savings from an au pair. How do you know you are going to like having someone living in your house? I know that I wouldn't and a lot of other people wouldn't either...

[Anonymous]

We bought a 900k home with a $300k HHI. Our mortgage plus taxes is about $4700 per month. We were just fine.

Our income has gone up to $500k+ and we save a lot more. We saved a decent amount when we only earned $300k with the same mortgage. We don't have any other debt.