How Much House Can We Afford? HHI 215K

[Anonymous]

Have been talking with financial planner and are looking to buy a place. Spouse and I have pretty different ideas on how much we can spend on a house.
- HHI 215K. One of us near the top of our range; another has potential to go up maybe 50-80K
- We are early-mid 30s; no kids; would like to start trying soon
- Retirement savings of around 230K
- Not much savings for downpayment, only around 50K
- Good credit ratings so hopefully good mortgage rates?

What do you think? One of us wants to stick under 500K, the other wants to go up to 700K.

[Anonymous]

500k. Children are very expensive. And house repairs usually start at $500 for some unknown reason.

We have the same HHI, two preschoolers and would like to have good college savings for them. We are currently looking to move and will limit our mortgage amount to $450.

[Anonymous]

Back in to it. Figure out what monthly payment you can handle on your net pay. Interest rates are going up, so some of it will depend on when you buy. Don't forget to factor in taxes, insurance and childcare.

[Anonymous]

We did not follow any formula - but our house was 2 times our annual income.

I would think that would put you in the 430K range.

[Anonymous]

The issue is that once you have kids the 500K housing stock will either be small, far away or have bad schools. If you can get into the 7-800 it's much better.

[Anonymous]

I would struggle to make 700 happen so that you are in an area with good schools and in a house that you don't feel like you have to sell in 5 years because it is too small and the schools suck.

[Anonymous]

You could probably afford 700, but I wouldn't do it if you plan to have kids soon. The daycare/preschool years were really hard for us (financially), but it got way better when they were in public school. If it were me, I would tell my relator that I want to see homes in the $500-$600 range.

[Anonymous]

I'd not buy now but save aggressively so that you can buy in the 700K range. Houses that look fine to you now may look more problematic once you're thinking about their schools.

[Anonymous]

I would also aim for no more than 500k.

[Anonymous]

650,000 easy.

[Anonymous]

Anonymous wrote:I would struggle to make 700 happen so that you are in an area with good schools and in a house that you don't feel like you have to sell in 5 years because it is too small and the schools suck.

Schools, schools, schools. Most schools here suck.

[Anonymous]

Shoot for a nice 500K townhouse. You're starting out. You don't need to worry about schools that much yet -- many years down the road. You won't have the pressure of the huge mortgage. You will have options later on. Ideally, you would have more saved for a downpayment.

Tell your realtor $500K and he/she will surely show you the ones b/t 5-600. They ALWAYS increase from what you tell them.

[Anonymous]

How much other debt do you have, if any? If no other debt I would say you could go up to the 700 range but if you have a bunch of SL's or other obligations you'll need to pare that down a bit. Also what areas are you looking at? Would you expect to send kids to private school after day care or would you do public?

[Anonymous]

OP here.

To answer a few questions:

- No SL debt (DW is paid off; DH had none)
- Would like to send any future kids to public schools
- Income is split pretty equally between DH and DW
- DW plans to continue working after kids, so will need child care. No local family to help with child care.
- We do not like townhouse options and prefer to look for a SFH (but not looking for where to buy suggestions, mostly just wondering about others experiences with home costs, mortgages, kids etc at our income level)

Thanks for your feedback so far.

[Anonymous]

We were fairly conservative when we bought our house 5 years ago- our mortgage was about $350k and we made about $150, but it has since risen to close to $200k. I love having a lower mortgage payment, which has allowed us to absorb daycare costs without too much trouble and we save a lot for retirement (not maxed, but pretty close).

However, sometimes I wish we had stretched a little bit more. Not a lot, but more so that we would be in a slightly more walkable area. I also wish we had thought of schools and proximity to playgrounds (we had our first about 2 years after moving in).

Maybe try to keep between $500-$600? But I definitely also recommend backing into what the monthly payment would look like AND factoring in what childcare costs will look like (we pay $1300 per month, which is just a little lower than our mortgage).