Have 250K for downpayment, HHI~110K, how high would you feel comfortable going up?

[Anonymous]

No substantial childcare but aftercare, no debt (school, car) just a monthly CC use, but the emergency funds are low ~20K. HHI income may go up to 130K (but will take time).
How high would you go up (for SFH)? I know what is my comfort zone, but would like to here others opinion.

[Anonymous]

$500k-$600k

[Anonymous]

OP back. That is what I am looing at it, too.

[Anonymous]

I think that's the right range, but I also wouldn't put it all into the house. If you can manage to leave the money alone I still wouldn't put down more than 20%. I'd stash the money somewhere else (brokerage account, Roth IRA) and withdraw money as necessary if the monthly payments are hard to make. That's an awful lot of money you're stashing in the house when you don't really need to.

If you're risk averse, I wouldn't worry about it and just put it all down.

[Anonymous]

For example, if you only put down $150,000 instead of $250,000, maybe it costs you an extra $500 buck a month but you also have 200 months (almost 17 years) worth of that $500 sitting there earning interest, and you're deducting that extra mortgage interest from your taxes every year as well.

[Anonymous]

Thanks PPs. That is a thought I did not have (I mean, its still preliminary idea and did not researched much, so getting these ideas are super helpful).

Still much to think about various options, then. Thank you. Any additional comments is appreciated.

[Anonymous]

No more than what you can comfortably pay the mortgage on with one income. Otherwise you are house rich and cash poor. Not worth it.

[Anonymous]

Anonymous wrote:Thanks PPs. That is a thought I did not have (I mean, its still preliminary idea and did not researched much, so getting these ideas are super helpful).

Still much to think about various options, then. Thank you. Any additional comments is appreciated.

Go pay a financial advisor to give you advice on how to maximize this cash to meet your goals - house, savings, investments, etc.

[Anonymous]

$500-$550

[Anonymous]

I think 600K max....here is how I think about it:

110 x 4 = 440 ---> max house you should get based on 3-4x HHI rule of thumb.

250 - 88 = 162 ---> your excess savings that you have beyond the downpayment required for a 440k house.

The max you should buy = 440 (what you can afford on your income) + 162 (extra savings) = 602

[Anonymous]

No more than $500k - and I agree, don't put all of that in as a down payment. Keep at least $75k for your emergency fund, and ideally hold back $25k for first-year house start-up expenses.

[Anonymous]

I would only put $100,000 down given you have little savings or emergency fund. Max I would spend is $400K.

[Anonymous]

750

[Anonymous]

On an HHI of 110 that *might* go to 130, I'd keep my mortgage as low as possible. Maybe 350K? I would not go as high as you can. Instead, I'd try to go as low as you can. My spouse and I have an HHI of about 120K and we had 20K to put down. We bought a sfh for 170K. (not the DC area) I regularly thank my lucky stars that we didn't go as high as we could. Especially when property tax increase time rolls around.

[Anonymous]

Anonymous wrote:On an HHI of 110 that *might* go to 130, I'd keep my mortgage as low as possible. Maybe 350K? I would not go as high as you can. Instead, I'd try to go as low as you can. My spouse and I have an HHI of about 120K and we had 20K to put down. We bought a sfh for 170K. (not the DC area) I regularly thank my lucky stars that we didn't go as high as we could. Especially when property tax increase time rolls around.

If OP is in the DC area this is not realistic. I think $500k is more realistic, and reasonable.