Just bought an $800,000 house on a $186,000 salary and now I'm panicking....

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:That's a lot - we bought $650 on a $200K combined income.

This comparison is useless.

I'm sure your answer was much more helpful.

Yes, my answer was separate to this, and yes, it was more informative than PP's response.

[Anonymous]

Anonymous wrote:Your payment seems low. We just refied at 2.625% for $750k, and our PITI is right around $4000. You presumably are paying PMI - is that factored in?

+1 seems low to me too.

[Anonymous]

How did you qualify?

[Anonymous]

Nothing about OP’s numbers add up. This thread is a troll.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is your income after a 401k contribution, and if so how much?

And how much emergency fund do you have?

And are any of your kids in paid child care or private school?

OP again - yes, income is after 401k contributions (we each contribute 5%, and get a 5% match), and DW is a fed who will qualify for a pension.
We are done with paid child care, kids are in public school, and will attend in-state public college.

It seems like you are saving far too little for retirement (I know you didn’t ask for advice about that, but I would much rather max 401ks and live in a less expensive house for the money you’re putting out). Assuming you are under the newer system I can’t imagine your DW’s pension is substantial. But, what’s done is done and you’ll find a way to make it work.

I'm a 15 and my pension will be 40K. It's plenty without a mortgage.

[Anonymous]

Seems reasonable to me. We probably stretched with our mortgage too but don’t regret it. I’m an introvert and love being home. I am happy doing one vacation a year and nothing crazy. Do you like to travel, shop, eat out a lot?

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here...

Our net income - after taxes and after saving for retirement - is about $11,000. So our total PITI payment will be 34% of our net income.

The good news is that we don't have any other debt (no credit cards, student loan, or car payments).

Your take home is 11k out of 15.5k? That seems crazy high. That’s over 70%!!

I'm a 15 and my take home pay is a little over 6.5k but I'm maxing the tsp, fsa, dca, and life insurance.

[Anonymous]

OP, you are going to be fine. Buying your perfect forever house is worth stretching a bit for and will be a good investment.

We bought a house with less than 20% down, $675k mortgage on $205k HHI (gross), and we still had one in day care. It has been fine. Our mortgage was initially around $4k/month but we refinanced down to $3,500 late last year. One of us is a fed also and our HHI has increased to $230k in 2.5 years. We are maxing out retirement and working toward more college savings. We are comfortable. We love our forever house. No regrets.

Congrats! Enjoy it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is your income after a 401k contribution, and if so how much?

And how much emergency fund do you have?

And are any of your kids in paid child care or private school?

OP again - yes, income is after 401k contributions (we each contribute 5%, and get a 5% match), and DW is a fed who will qualify for a pension.
We are done with paid child care, kids are in public school, and will attend in-state public college.

It seems like you are saving far too little for retirement (I know you didn’t ask for advice about that, but I would much rather max 401ks and live in a less expensive house for the money you’re putting out). Assuming you are under the newer system I can’t imagine your DW’s pension is substantial. But, what’s done is done and you’ll find a way to make it work.

LOL... this one thinks you need to max 2 401ks to retire at a $186k income. Maybe he/she forgot about 2 SS checks and a pension. Your retirement savings are definitely on track.

[Anonymous]

Anonymous wrote:We totally fell in love with the house, saw it as our forever home, and went for it.

Now I am here in the light of day and panicking.

Trying to talk myself down from the ledge:

Total mortgage debt is $710,000
Total monthly payment, including principal, interest, taxes, and insurance, is $3,700. (30 year fixed mortgage with a great rate).
No other major debts, and kids are done with daycare.
Our gross monthly income, before taxes, is $15,500.
So our mortgage debt payment is 24% of our gross monthly income.

On paper, that seems pretty reasonable.

What say you, DCUM? Did I screw up and buy too much house?

Oh sheesh. Everyone on this board is SO dramatically conservative about money. It's really ridiculous.

OP, you're fine. We did basically the same thing ($190k HHI, $860k house, $710k mortgage) and we DO have childcare expenses. We feel great about it! I will say, a couple things that made us feel better 1) we both have very stable jobs. 2) if something did happen to our jobs, we have very, very marketable skills and would be able to get new jobs without a ton of fuss. 3) we have no other debt 4) We have a decent cash emergency fund (4 months expenses) plus we feel good about where we are on retirement.

If one of those things is NOT true for you, I would focus on that a bit, particularly bulking up your emergency fund.

Make sure that you can balance your budget, you can stay on your budget, and you're still saving.

We have also cut our retirement savings a bit for now (still saving, just not at the same rate). As our incomes increase (even just COLA) and the housing expenses stay the same, we'll bulk them back up. But the truth is, when you have a house that pricey on an income like that, your house is essentially part of your retirement savings.

Congrats on your new home!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is your income after a 401k contribution, and if so how much?

And how much emergency fund do you have?

And are any of your kids in paid child care or private school?

OP again - yes, income is after 401k contributions (we each contribute 5%, and get a 5% match), and DW is a fed who will qualify for a pension.
We are done with paid child care, kids are in public school, and will attend in-state public college.

do they know this?

They can tell their children that they will pay for the equivalent of in-state public college. Kids can then make the decision if they would like to pay for / take loans out for any remaining tuition as a result of making a different choice. I have a similar agreement with my children.

I bet you haven’t had to cross that bridge yet. It’s not that easy. It’s not that simple.

I don't understand this comment. I have two children who are in college right now, and one who is a junior in hs in the college search process. We told them all when they started looking at colleges - we will contribute $35k per year toward your college education (which is a little more than what our state flagship costs)...if you want to go to a college that costs more than that, scholarships and/or loans. Then they selected colleges to apply to based on that criteria. One ended up at UMD, and one is at a midwestern private college (loyola in Chicago) on a merit scholarship that brought the cost down to $37k per year. It was very simple -- what am I missing?

[Anonymous]

Anonymous wrote:OP here...

Our net income - after taxes and after saving for retirement - is about $11,000. So our total PITI payment will be 34% of our net income.

The good news is that we don't have any other debt (no credit cards, student loan, or car payments).

I'm not following your math. What about retirement deductions? Grown ups with a decent income max out 401k.

Sounds like a done fuc&ed up.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We weren’t comfortable with more than a $200k house on a HHI of $100,000/yr so that would be a big no from us. But we are resisting the two income trap and live in the Midwest.

That's so cute

Smart too. We manage this in the DC area.

[Anonymous]

OP—what is your HHi? Clearly more than 186k based on your net.

[Anonymous]

Anonymous wrote:Yikes.

OK. Maybe you are very young and your income will grow by a lot?

We are super grateful that at your salary we were the owners of a house that cost around 350K. It allowed us to save for college, retirement, vacations, cleaning services, hobbies, eating out, entertaining, zero debt, tutors, EC activities, further education and certifications etc. Just by buying a cheaper house than what we could afford, we pretty much had a upper class lifestyle.

Where do you live? You can’t get a house in the DC area for $350,000. You can barely get one for $800,000.

I would want to put 20% down. But I don’t think your mortgage payment is that horrible critical if you live in the DC area. It’s hard to get anything nice for less than 1 million. And he said you love it and it’s your dream home. So I think it’s fine.