HHI for $700K house?
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Anonymous
| If you've recently bought a house around $700K, what is your HHI? Ours is $160K, and the "how much house can you afford?" calculators all tell me we can swing a $700-$800K house. We have about $200K in equity in our current house that would be available for downpayment, and no other debt. Right now we are paying for daycare x2, so $700K sounds way out of reach. But it feels like it will be a little high even in a few years, when daycare will be over. I'd been thinking we could afford more like $600K then. But going up to $700 would really open up a lot of options for us. Are other people buying those houses with a similar income? |
Anonymous
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We make 180k and have a 700k house.
Totally depends on your downpayment. We put down about 30% and our mortgage is very affordable. |
Anonymous
| yes, we bought our first house with a similar income, it was fine. |
Anonymous
| Our house was 680 (610 mortgage) and HHI is 270. We both wanted to keep the mortgage payment below 3500. No childcare at the moment but ~$1200/month in SLs. The calculators (and lenders) approved us for nearly double the mortgage we took out and I can't imagine how much our lives would suck if we had gone by those estimates. We've had to do a decent amount of work to the house since we moved in - about 80% expected and 20% not, so keeping the costs lower feels like it was the right choice. $3500 feels doable but not easy, if that makes sense. |
Anonymous
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Is your HHI expected to go up? When we bought 4 years ago, our HHI was similar (now it's $200K) and we stuck to a $420K mortgage ($550K house, put $130K down). We also have two kids and I can't even imagine paying a higher mortgage on $160K HHI. Also no debt here.
Maybe I'm conservative, but PP is right that there's more than just the mortgage to consider in terms of expenses. |
Anonymous
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We are in a extremely similar situation and approached home affordability by working backwards. Figure out your net take-home pay, after taxes, and after maxing your 401(k). Subtract daycare, monthly living expenses, other debts, college saving goals, vacation/home improvement/any other goals you have. Make sure you feel comfortable with your emergency fund, and if not, also account for how much you need to put into that to make you comfortable. Whatever is left is available for your mortgage payment.
From that mortgage payment, figure out how much home you can afford based off that payment and how much you have available for a down-payment. If you want to sacrifice vacations/tighten your monthly budget for a few years while the kids are still in daycare, recognizing that your household income will increase and daycare costs go away (but to be replaced by other kid expenses), then go for it. Bottom-line, everybody has different goals in terms of how they live their live and how they spend their money. It's best to consider your current financial situation, your short, medium and long-term goals and then work backwards to determine how much home you feel comfortable with while accomplishing those goals, recognizing every extra dollar you spend on your mortgage means one less dollar for other spending or saving goals. |
Anonymous
| Totally doable! |
Anonymous
| I think you'll be fine. In my experience, the prices of homes start to rise. Buy your stretch house now, rather than waiting for daycare expenses to fall. That will free up income in future years. Good luck! |
Anonymous
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OP- we close on Friday on a home for $695k. HHI is $160k. DP is $140k, so mortgage amount is $556k.
Our mortgage + interest is $2535 Our taxes $640 Our insurance is $65 So total payments, per month, $3240 You can totally do it. |
Anonymous
| That monthly payment seems really high for that income especially since you are paying childcare for 2. |
Anonymous
| We make $160k and that mortgage payment would give me heart palpitations but I am admittedly risk adverse. We bought way lower than we qualified for. I wouldn't be comfortable with anything over $2500 per month personally. |
Anonymous
| There is no apples to apples comparison since property taxes Vary so much You can run a calculator based on various mortgage sizes. Rates are way down from last summer. We had been getting quotes at 4.5% and are now locking at 4%. Add in taxes. |
Anonymous
Our HHI is twice that and we recently bought a home for $660K! But we are super conservative financially (or at least trying to be). |
Anonymous
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We make around $180k and bought 2 years ago for $580K. Put 20% down. Our monthly PITI is right around $2600, which is 25% of our take-home.
Honestly we would be feeling really flush, except that we are also paying $2500/month in child care (we have 2 kids and have a nanny). We will only be in this situation for 6 more months and then our childcare goes down to $400/month for extended day (both kids), plus whatever we do for the summers (more expensive but still only about half what we pay now, and only for 8 weeks). We've still put money in savings, we've managed to pay off DH's student loan, we've taken some decent vacations--but I'm starting to feel like things are a bit tight. By which I'm saying, think long and hard about those child care costs and how much longer you're going to have them. I do not think we could pay upwards of $3k a month for our mortgage. |
Anonymous
| HHI of $180. $700k house with 20 down so $560k mortgage. 3.25 rate and $3,100/month PITA. Doable with no other debts or childcare expenses. |