What can I afford with 210K joint income and $300K down payment?

[Anonymous]

What would be your price range if you had saved 300K for a down payment, but now only make a combined 210K (gave up a much higher paying job for something I love, plus inherited some money)? No kids now, but trying to get pregnant.

I'm just wondering what a reasonable price range would be for when we start searching for a home. We're renters now, and comfortably put $2600 into rent each month in DC. Hoping to stay in DC or nearby suburb so that commute doesn't become horrible. how much would you spend on a house if you were me?

[Anonymous]

Whatever you're comfortable with.

[Anonymous]

Why not calculate how much of a mortgage would give you a $2600 payment?

[Anonymous]

Anonymous wrote:Why not calculate how much of a mortgage would give you a $2600 payment?

This would be stupid. The tax breaks associated with the mortgage would push this to around $3,500 or so, easily, and be economically equal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why not calculate how much of a mortgage would give you a net $2600 payment?

This would be stupid. The tax breaks associated with the mortgage would push this to around $3,500 or so, easily, and be economically equal.

There. Now not stupid and a good starting point.

[Anonymous]

A $900K house would be about what you spend now (including tax, insurance, and tax deductions.) Except you would now be putting money towards principal instead of all to landlord.

[Anonymous]

Personally, assuming no other debts, I would try to stay at $900k or under, which means a $600k mortgage. Don't forget to budget for childcare since you plan to have kids. I'd say $1,800 a month for daycare is a reasonable estimate.

[Anonymous]

I would find something in the 600k range and have a small mortgage payment. then you have to freedom to travel, maybe pay for private school if you need to, etc.

Where do you work?

[Anonymous]

Agree with PP.

We have had over $1million mortgage for several years with $120K annual income and we sleep just fine but we also have over a million in fairly liquid funds so we know we can fall back on this if needs be.

[Anonymous]

Anonymous wrote:Agree with PP.

We have had over $1million mortgage for several years with $120K annual income and we sleep just fine but we also have over a million in fairly liquid funds so we know we can fall back on this if needs be.

This does not compute. How could you possibly NOT need it? Like every month?

[Anonymous]

Anonymous wrote:Personally, assuming no other debts, I would try to stay at $900k or under, which means a $600k mortgage. Don't forget to budget for childcare since you plan to have kids. I'd say $1,800 a month for daycare is a reasonable estimate.

Inhomes in the burbs are 1100-1500
Centers in DC 1800-2300.
I have one in daycare, 220k HHI and we are doing a $400-430k loan. We have zero debt. Already paid off student loans.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Agree with PP.

We have had over $1million mortgage for several years with $120K annual income and we sleep just fine but we also have over a million in fairly liquid funds so we know we can fall back on this if needs be.

This does not compute. How could you possibly NOT need it? Like every month?

Our federal and state tax bill is negligible because of the mortgage interest and real estate taxes plus other deductions. So figure the debt service at today's low rates and take into account no other debt and it is very doable. The only time we dip into savings is when we go on vacations which we do two or three times a year.

[Anonymous]

OP Here. Thanks. It's helpful to hear your thoughts, even though I can also put the numbers into a mortgage calculator. We have very little debt (car paid off, and one of us has about 8K left in student loans; no credit card debt). We currently each put about 10% of our income into our 401K/403b, though we should probably up that amount, I'm told. Retirement is currently our main savings mechanism. Neither of us expect big raises--i.e. we both have jobs we like that are stable, but not huge money-makers. We're planning on public school for elementary (and will choose a location accordingly. Doesn't need to be a great school, but not awful either). Parents are helping out with savings for college (and private high school if we go in that direction), so we're not panicked about that yet.

A few folks have thrown out 900K has a starting point. A 600K mortgage scares me (just seems like such a huge number)! But it's good to hear people say that it's doable. I think that we'll start looking at places below our max price, and then work our way up if we don't find things we like.

Now we just have to decide on the neighborhood! One of us works on the redline; the other in Georgetown. Metro commuting is great. Bus commuting is fine. Car commuting is OK. Liberal-leaning environs, a chance to build some community and proximity to a restaurant or two important.

Thanks for the input!

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why not calculate how much of a mortgage would give you a $2600 payment?

This would be stupid. The tax breaks associated with the mortgage would push this to around $3,500 or so, easily, and be economically equal.

I disagree, housing costs are more than just a mortgage, there are property taxes, repairs, renovations. I think figuring out what you can afford based on a $2600 mortgage is a good starting point.

[Anonymous]

I would look at $900-1 mill