Would you take a $950k mortgage on 300k salary?

[Anonymous]

That would be extremely tight and I would not do it. We have the same HHI and our PITI is $2600.

Would you be ok with no vacations, extra curriculars for kids, no new cars, no eating out, etc?

[Anonymous]

We have a monthly HHI net of $25k and PITI is $8200. We still don’t do luxury vacations.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:HHI is $17,500 and PITI would be $7,700 (monthly for both).

No. Hell no.

my HHI is 25k and my PITI is around $4,300 and super tight. Look water heaters break, roofs leak, kids need braces, car breaks down, college tuition bills. I cant wait to pay off mortgage. My property tax and home insurance is shooting up every year that is enough of a burden.

My homeowners went up $3,000 a year since bought house in 2017 and property taxes up also around $3,000 a year. that monthly payment is up $500 a month in 8 years. That $7,700 will be pushing $9,000 in a ten years.

This, OP.

Unless you have financial assistance from your parents, I wouldn’t do it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I wouldn’t, but I’m also not from one of those UMC DCUM families who are underwriting all sorts of things.
One neighbor, after having trouble finding a new job, went to work for his mom; another neighbor was just gifted a new addition with screened porch from their inlaws because they felt cramped after baby #3.
So if you’re from one of these, you’re fine. If you’re like me, where family on either side does not or actually cannot help with housing, childcare/education expenses, or employment in any way, even in a rough patch, don’t do it. We’re HHI $300k, totally on our own, two kids, mortgage of $600k, and have peace of mind financially - it’s completely managable.

Just know that you are in an extremely frugal minority. Do a search on Redfin for $1 million dollar SFHs in North Arlington, McLean, Vienna, Falls Church City and anyplace in MoCo zoned for the “W Schools” and BCC. You will pull up only a handful of homes. I can guarantee you that the average family who is buying these $1 million dollar 1,500 sq ft homes that need a lot of work is not a partner at a law firm. A $300,000 HHI would be the norm for a home like this.

By your frugal logic, people with HHIs of $300,000 should be buying SFHs in Cheverly, Woodbridge, Manassas, and Wheaton…that is, places where you can still find SFHs for $600,000. I can promise you the average family in these areas is not pulling in $300,000 a year. You would feel very out of place sending your kid to Kennedy or Wheaton HSs making $300,000.

You are very wrong. Not to mention, a lot of people get financial help from their parents allowing them to buy more expensive homes, which wouldn’t be apparent to outside eyes.

[Anonymous]

OP, put it out of your mind. Anything can happen in life. Look at what is happening to those whose incomes are dependent on the federal government. Look at what happened to service sector jobs in the pandemic. Look at what happened to the finance industry in 2008-2009. Or the tech industry in 2000. People burn out of jobs and face age discrimination. Buy a house that you can easily afford now with the shortest mortgage you can afford. Then if any of those things happen you can walk away laughing. Your future self will thank you.

[Anonymous]

It's fine if it makes sense to you.

You don't want to pay attention to anything random people on the internet say. Most people are idiots.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's risky but you will at least be better positioned to sell with a rate that high. This forum is filled with people who are trapped in their 2% mortgage that will never be able to sell.

That doesn’t make any sense. People with 2% mortgages are equally able to sell as people with 6% mortgages, they just have more incentive not to. No one is trapped.

Most people with 2% mortgages will downsize if they sell and buy a new house. The jump in rates and increase in prices make it impossible for a lot of people. There are always plenty of posts in this forum of people saying they feel trapped and can’t afford to move.

The first post in this chain said OP is better positioned to sell with a $950k mortgage at 6% than if they had a $950k mortgage at 2%. Actually, they’re in the same position to sell, the person with the higher percentage has just been paying way more money in the interim. You’re saying that the person who doesn’t want to give up a lower rate is trapped when they’re actually just making a rational economic decision.

No. The first post said if the OP buys a house now with a 7% mortgage and then needs to sell, they'll be better off than someone who is currently in a house with a 2% mortgage. I'm saying the person with the lower mortgage is in a much tougher position because due to the increase in rates and housing prices since they bought their home, they'll end up paying significantly more for the same house.

Ok… if you had the choice to get a 2% mortgage or a 7% mortgage, would you choose the 7% so you’re in a better position to sell in the future? You’re saying the person with a higher opportunity cost against selling is in a tougher position to sell when really they just have more reason not to. They aren’t actually worse off.

I'm saying the OP won't have a choice in the mortgage and it's going to be around 7%. But if something happens and a year from now they have to sell the house, they won't be forced into a massive downgrade like people that are living in a home with a 2% mortage.

[Anonymous]

According to this forum you need to be Jeff Bezos to afford a $1.05M rancher in Pimmit Hills. Any income below that and you’ll be camping for every vacation and eating government cheese and ramen noodles for the rest of your life.

[Anonymous]

Anonymous wrote:According to this forum you need to be Jeff Bezos to afford a $1.05M rancher in Pimmit Hills. Any income below that and you’ll be camping for every vacation and eating government cheese and ramen noodles for the rest of your life.

This is the OP and I definitely feel the same vibes from many posters. Couple of points - I didn’t specify this at the beginning but we currently make a bit over $400k combined. I’m a miserable Fed and looking to take a significant pay cut for my dream job that would make our income around $300k. I also thought that many would say to live there around 7-10 years while raising kids and then downsize but it doesn’t seem like people do this here. Lastly, we do not have family money but of course our parents could take us in and feed us if we both lost our jobs/health. Otherwise I’m kinda shocked that in this area people making over $300k are having such small mortgages… what do you plan on doing with all your money when your house is paid off?? I guess just the peace of mind which is great but I like the idea of having a really nice home while the kids are here to enjoy it so I think we will splurge and hope for the best!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:According to this forum you need to be Jeff Bezos to afford a $1.05M rancher in Pimmit Hills. Any income below that and you’ll be camping for every vacation and eating government cheese and ramen noodles for the rest of your life.

This is the OP and I definitely feel the same vibes from many posters. Couple of points - I didn’t specify this at the beginning but we currently make a bit over $400k combined. I’m a miserable Fed and looking to take a significant pay cut for my dream job that would make our income around $300k. I also thought that many would say to live there around 7-10 years while raising kids and then downsize but it doesn’t seem like people do this here. Lastly, we do not have family money but of course our parents could take us in and feed us if we both lost our jobs/health. Otherwise I’m kinda shocked that in this area people making over $300k are having such small mortgages… what do you plan on doing with all your money when your house is paid off?? I guess just the peace of mind which is great but I like the idea of having a really nice home while the kids are here to enjoy it so I think we will splurge and hope for the best!!

Thirty-year mortgage. I hope to be retired when my mortgage is paid off. I don’t not what buckets of money you’re imagining I’ll have.

[Anonymous]

Anonymous wrote:OP, put it out of your mind. Anything can happen in life. Look at what is happening to those whose incomes are dependent on the federal government. Look at what happened to service sector jobs in the pandemic. Look at what happened to the finance industry in 2008-2009. Or the tech industry in 2000. People burn out of jobs and face age discrimination. Buy a house that you can easily afford now with the shortest mortgage you can afford. Then if any of those things happen you can walk away laughing. Your future self will thank you.

100%

[Anonymous]

Anonymous wrote:

Anonymous wrote:I wouldn’t, but I’m also not from one of those UMC DCUM families who are underwriting all sorts of things.
One neighbor, after having trouble finding a new job, went to work for his mom; another neighbor was just gifted a new addition with screened porch from their inlaws because they felt cramped after baby #3.
So if you’re from one of these, you’re fine. If you’re like me, where family on either side does not or actually cannot help with housing, childcare/education expenses, or employment in any way, even in a rough patch, don’t do it. We’re HHI $300k, totally on our own, two kids, mortgage of $600k, and have peace of mind financially - it’s completely managable.

Just know that you are in an extremely frugal minority. Do a search on Redfin for $1 million dollar SFHs in North Arlington, McLean, Vienna, Falls Church City and anyplace in MoCo zoned for the “W Schools” and BCC. You will pull up only a handful of homes. I can guarantee you that the average family who is buying these $1 million dollar 1,500 sq ft homes that need a lot of work is not a partner at a law firm. A $300,000 HHI would be the norm for a home like this.

By your frugal logic, people with HHIs of $300,000 should be buying SFHs in Cheverly, Woodbridge, Manassas, and Wheaton…that is, places where you can still find SFHs for $600,000. I can promise you the average family in these areas is not pulling in $300,000 a year. You would feel very out of place sending your kid to Kennedy or Wheaton HSs making $300,000.

I’m a different poster. This is interesting because we make $380k with my partner set to get a promotion soon. I am one of those frugal people and I was considering Woodbridge. Our incomes will go up especially my partner’s income. I guess for me I’m nervous about making a big leap. We’ve been looking at homes in the $800-900k range. I thought Woodbridge would be okay (Lake Ridge area) but now I wonder if we’d be out of place there.

[Anonymous]

Anonymous wrote:According to this forum you need to be Jeff Bezos to afford a $1.05M rancher in Pimmit Hills. Any income below that and you’ll be camping for every vacation and eating government cheese and ramen noodles for the rest of your life.

How did PH catch a stray bullet like this? You should come visit us! There is a reason this old ranches cost $1M. New homes are $2M.

[Anonymous]

We make a bit more, own some investment properties (all with mortgages), but also spend 80k/year in private school. We also rent our basement which cuts our monthly PITI from 6.5k to 4K. We can afford it without renting the basement, but it would be tight and we may have to postpone updating the house or signing up for all kids activities.

[Anonymous]

No way. We earn 425k and it’s tight with 4000 PITI.