How much mortgage can we afford?

[Anonymous]

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Anonymous wrote:When we had student loans from DH's law degree we bought a cheap townhouse in a gentrifying area, and we didn't have any car or consumer loans. We drove an old sedan until the student debt was paid off.

750k is insane. Look for a condo or townhouse where your PITI costs are as close to rent as possible.

Agree that trying to reduce expenses with that much in loans is really important. $722 for a car lease sounds high, but I don't know when OP and her husband got their lease and if interest rates were already high. It would be a shame if they were driving around in a BMW and not paying off loans/funding retirement/funding 529s.

Op here: it’s not a bmw, it’s a Toyota and we bought in 2021 because our 14 year old Camry ran into the ground.

WTH?!?! why are you paying $722/month on a Toyota. You have a family of 4. Another Camry would work just fine or a Rav4. You do not need/cannot afford a Highlander or more expensive at this point. And why lease? Buy a $35K vehicle and pay it off in 3 years then drive it into the ground for the next 10. You can't really afford to live the fancy life until you pay off your student loans. Do that and you will be financially sound.

Op here: you obviously aren’t in the car market at all. And I never said it’s a lease…I bought a Toyota Avalon car for $40k when the market was crazy because I needed a car and my 14 yr old Camry died.

But, clearly you couldn't afford a $40K car. Where is all your money going if you aren't paying off your loans/debt? How much is your rent.

You need to buy a cheap crummy house like the rest of us and focus on paying off that debt, regular savings and college savings.

+1 OP you need to answer some of the reasonable questions if you want advice. Post a real budget. Is your SAHP planning to return to work, and what will that look like (timeline, potential income)? How much longer on the car loan, how much longer until the youngest can be in free school (PK3 in DC, K in the burbs)? What will your student loan payments be when they resume, what are your interest rates?

You're only responding to the comments you can smack down but you're ignoring the people that need more information to answer your question. At first it felt somewhat reasonable (how many people can ask "how can a lady be a lawyer?" before you type an angry reply) but now it feels trollish.

Op here: 3 years left on the car loan. Car loan interest rate is 3%. Student loan interest rate is 6%. DH is a real estate agent so he only make money if he has a deal. He will be grinding more when our baby goes to Kindergarten in 4 years. I don’t rely on his income and don’t plan my life around it because it’s commission based and hard to determine some years it’s $40k some years it’s $100k the highest ever was $130k.

Here is a budget breakdown:
-$722 car note
-2800 rent
-$300 utilities
- $115 Verizon internet
$200 cellphones
- $280 car insurance
$900 health insurance.

So you are already at $5317/month and you still are not eating, putting gas in the car, etc. No travel, target/WM trips, eating out/entertainment/kids activities, vacations, etc in the budget either. I suspect your actual monthly base expenditures are going to be closer to $7-8K/month. Then you need to add in $3k for minimum on your student loan payments.

And if you are only paying $3k/month on the student loans, that's another 10 years at least to pay them off.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:When we had student loans from DH's law degree we bought a cheap townhouse in a gentrifying area, and we didn't have any car or consumer loans. We drove an old sedan until the student debt was paid off.

750k is insane. Look for a condo or townhouse where your PITI costs are as close to rent as possible.

Agree that trying to reduce expenses with that much in loans is really important. $722 for a car lease sounds high, but I don't know when OP and her husband got their lease and if interest rates were already high. It would be a shame if they were driving around in a BMW and not paying off loans/funding retirement/funding 529s.

Op here: it’s not a bmw, it’s a Toyota and we bought in 2021 because our 14 year old Camry ran into the ground.

WTH?!?! why are you paying $722/month on a Toyota. You have a family of 4. Another Camry would work just fine or a Rav4. You do not need/cannot afford a Highlander or more expensive at this point. And why lease? Buy a $35K vehicle and pay it off in 3 years then drive it into the ground for the next 10. You can't really afford to live the fancy life until you pay off your student loans. Do that and you will be financially sound.

Op here: you obviously aren’t in the car market at all. And I never said it’s a lease…I bought a Toyota Avalon car for $40k when the market was crazy because I needed a car and my 14 yr old Camry died.

But, clearly you couldn't afford a $40K car. Where is all your money going if you aren't paying off your loans/debt? How much is your rent.

You need to buy a cheap crummy house like the rest of us and focus on paying off that debt, regular savings and college savings.

+1 OP you need to answer some of the reasonable questions if you want advice. Post a real budget. Is your SAHP planning to return to work, and what will that look like (timeline, potential income)? How much longer on the car loan, how much longer until the youngest can be in free school (PK3 in DC, K in the burbs)? What will your student loan payments be when they resume, what are your interest rates?

You're only responding to the comments you can smack down but you're ignoring the people that need more information to answer your question. At first it felt somewhat reasonable (how many people can ask "how can a lady be a lawyer?" before you type an angry reply) but now it feels trollish.

Op here: 3 years left on the car loan. Car loan interest rate is 3%. Student loan interest rate is 6%. DH is a real estate agent so he only make money if he has a deal. He will be grinding more when our baby goes to Kindergarten in 4 years. I don’t rely on his income and don’t plan my life around it because it’s commission based and hard to determine some years it’s $40k some years it’s $100k the highest ever was $130k.

Here is a budget breakdown:
-$722 car note
-2800 rent
-$300 utilities
- $115 Verizon internet
$200 cellphones
- $280 car insurance
$900 health insurance.

I'm not one of the people piling on, but this isn't a complete picture. How much do you spend on food? How much on going out? How much on clothes and household stuff? Where is the rest of the money going every month, if not to housing or student loans?

If it's going to stuff you can easily cut then you're probably in good shape, right? Just stop paying for that other stuff, and use that $ for your house. If it's helping keep two sets of parents from becoming homeless, then probably not.

other posters are not piling on. We are simply stating the OP has no clue how much they are actually spending; there is no realistic budget. Their real monthly expenses is likely closer to $12K with everything added in and 2-3K/month for student loan repayment and those student loans will take 10+ years at only 2-3K at 6% interest. Not the $4K they originally stated. That's a huge difference and indicative of someone who does not have a firm grasp on their finances.

So before OP can even decide what they can afford, they simply need to get a grasp on what they currently spend. Then they can decide what could be cut out.
Simply put, owning a home when you do not have a 6 month emergency fund and owe student loans worth more than many people's mortgages is not the best idea when you only make $300K---might be different if salary is $600-700K. But even then, I'd argue it's best to pay off the loans and remain a renter until you can do that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:When we had student loans from DH's law degree we bought a cheap townhouse in a gentrifying area, and we didn't have any car or consumer loans. We drove an old sedan until the student debt was paid off.

750k is insane. Look for a condo or townhouse where your PITI costs are as close to rent as possible.

Agree that trying to reduce expenses with that much in loans is really important. $722 for a car lease sounds high, but I don't know when OP and her husband got their lease and if interest rates were already high. It would be a shame if they were driving around in a BMW and not paying off loans/funding retirement/funding 529s.

Op here: it’s not a bmw, it’s a Toyota and we bought in 2021 because our 14 year old Camry ran into the ground.

WTH?!?! why are you paying $722/month on a Toyota. You have a family of 4. Another Camry would work just fine or a Rav4. You do not need/cannot afford a Highlander or more expensive at this point. And why lease? Buy a $35K vehicle and pay it off in 3 years then drive it into the ground for the next 10. You can't really afford to live the fancy life until you pay off your student loans. Do that and you will be financially sound.

Op here: you obviously aren’t in the car market at all. And I never said it’s a lease…I bought a Toyota Avalon car for $40k when the market was crazy because I needed a car and my 14 yr old Camry died.

But, clearly you couldn't afford a $40K car. Where is all your money going if you aren't paying off your loans/debt? How much is your rent.

You need to buy a cheap crummy house like the rest of us and focus on paying off that debt, regular savings and college savings.

Op here: my rent is $2,800. Utilities are $300. All monthly expenses are $4k

I call BS.

2800+300+722 is $3822. That leaves you a grand total of $178 for everything else. Renter insurance, medical care, gas for the $722/month Avalon, food, etc. So I've found you one solution---ditch the car, because you certainly cannot afford to drive it without insurance or any gas to put in it.

So if you are not a troll, tell us your real monthly expenses. It's way higher than $4k. A true budget has all expenses. You are nowhere close to even knowing that.

The $4K also does not include the monthly student loan payments that OP will be required to make, which I imagine are in excess of $1K — probably closer to $2K.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:When we had student loans from DH's law degree we bought a cheap townhouse in a gentrifying area, and we didn't have any car or consumer loans. We drove an old sedan until the student debt was paid off.

750k is insane. Look for a condo or townhouse where your PITI costs are as close to rent as possible.

Agree that trying to reduce expenses with that much in loans is really important. $722 for a car lease sounds high, but I don't know when OP and her husband got their lease and if interest rates were already high. It would be a shame if they were driving around in a BMW and not paying off loans/funding retirement/funding 529s.

Op here: it’s not a bmw, it’s a Toyota and we bought in 2021 because our 14 year old Camry ran into the ground.

WTH?!?! why are you paying $722/month on a Toyota. You have a family of 4. Another Camry would work just fine or a Rav4. You do not need/cannot afford a Highlander or more expensive at this point. And why lease? Buy a $35K vehicle and pay it off in 3 years then drive it into the ground for the next 10. You can't really afford to live the fancy life until you pay off your student loans. Do that and you will be financially sound.

Op here: you obviously aren’t in the car market at all. And I never said it’s a lease…I bought a Toyota Avalon car for $40k when the market was crazy because I needed a car and my 14 yr old Camry died.

But, clearly you couldn't afford a $40K car. Where is all your money going if you aren't paying off your loans/debt? How much is your rent.

You need to buy a cheap crummy house like the rest of us and focus on paying off that debt, regular savings and college savings.

+1 OP you need to answer some of the reasonable questions if you want advice. Post a real budget. Is your SAHP planning to return to work, and what will that look like (timeline, potential income)? How much longer on the car loan, how much longer until the youngest can be in free school (PK3 in DC, K in the burbs)? What will your student loan payments be when they resume, what are your interest rates?

You're only responding to the comments you can smack down but you're ignoring the people that need more information to answer your question. At first it felt somewhat reasonable (how many people can ask "how can a lady be a lawyer?" before you type an angry reply) but now it feels trollish.

Op here: 3 years left on the car loan. Car loan interest rate is 3%. Student loan interest rate is 6%. DH is a real estate agent so he only make money if he has a deal. He will be grinding more when our baby goes to Kindergarten in 4 years. I don’t rely on his income and don’t plan my life around it because it’s commission based and hard to determine some years it’s $40k some years it’s $100k the highest ever was $130k.

Here is a budget breakdown:
-$722 car note
-2800 rent
-$300 utilities
- $115 Verizon internet
$200 cellphones
- $280 car insurance
$900 health insurance.

So you are already at $5317/month and you still are not eating, putting gas in the car, etc. No travel, target/WM trips, eating out/entertainment/kids activities, vacations, etc in the budget either. I suspect your actual monthly base expenditures are going to be closer to $7-8K/month. Then you need to add in $3k for minimum on your student loan payments.

And if you are only paying $3k/month on the student loans, that's another 10 years at least to pay them off.

Don't forget home insurance and taxes. Plus repairs. And, utilities may go up.

How is the cell phone that high just for two people? Same with internet? The car note seems insane - do you have bad credit?

Kids get more expensive as they get older. Plus, you need to save for college.

Kids need to go to day car and husband needs to work. If he is a real estate agent he should know this stuff.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:When we had student loans from DH's law degree we bought a cheap townhouse in a gentrifying area, and we didn't have any car or consumer loans. We drove an old sedan until the student debt was paid off.

750k is insane. Look for a condo or townhouse where your PITI costs are as close to rent as possible.

Agree that trying to reduce expenses with that much in loans is really important. $722 for a car lease sounds high, but I don't know when OP and her husband got their lease and if interest rates were already high. It would be a shame if they were driving around in a BMW and not paying off loans/funding retirement/funding 529s.

Op here: it’s not a bmw, it’s a Toyota and we bought in 2021 because our 14 year old Camry ran into the ground.

WTH?!?! why are you paying $722/month on a Toyota. You have a family of 4. Another Camry would work just fine or a Rav4. You do not need/cannot afford a Highlander or more expensive at this point. And why lease? Buy a $35K vehicle and pay it off in 3 years then drive it into the ground for the next 10. You can't really afford to live the fancy life until you pay off your student loans. Do that and you will be financially sound.

Op here: you obviously aren’t in the car market at all. And I never said it’s a lease…I bought a Toyota Avalon car for $40k when the market was crazy because I needed a car and my 14 yr old Camry died.

But, clearly you couldn't afford a $40K car. Where is all your money going if you aren't paying off your loans/debt? How much is your rent.

You need to buy a cheap crummy house like the rest of us and focus on paying off that debt, regular savings and college savings.

Op here: my rent is $2,800. Utilities are $300. All monthly expenses are $4k

I call BS.

2800+300+722 is $3822. That leaves you a grand total of $178 for everything else. Renter insurance, medical care, gas for the $722/month Avalon, food, etc. So I've found you one solution---ditch the car, because you certainly cannot afford to drive it without insurance or any gas to put in it.

So if you are not a troll, tell us your real monthly expenses. It's way higher than $4k. A true budget has all expenses. You are nowhere close to even knowing that.

The $4K also does not include the monthly student loan payments that OP will be required to make, which I imagine are in excess of $1K — probably closer to $2K.

The student loan is a house payment unto itself. It will probably be at least $2K.

[Anonymous]

OP when you add in loans & food your burn rate is already going to be $8000/m. Husband needs to work while kids are in daycare/preschool. Also, you can cut those phone bills in half by asking; internet is too high; car note is insanely high, you could own a good reliable CPO car in two years of what you’re paying to lease. If you’re going to buy, it should be a 2 BR condo that you live a few years till kids are school age, then you can rent it out for income after or sell & roll the equity into a small house. You really need to throw everything at those loans or you will pay them twice over in interest. Does your employer offer any student loan repayment?

[Anonymous]

Anonymous wrote:OP when you add in loans & food your burn rate is already going to be $8000/m. Husband needs to work while kids are in daycare/preschool. Also, you can cut those phone bills in half by asking; internet is too high; car note is insanely high, you could own a good reliable CPO car in two years of what you’re paying to lease. If you’re going to buy, it should be a 2 BR condo that you live a few years till kids are school age, then you can rent it out for income after or sell & roll the equity into a small house. You really need to throw everything at those loans or you will pay them twice over in interest. Does your employer offer any student loan repayment?

But I doubt they will do any of this. She's 5 years out of law school. 3 years into covid without any loan payments. Yet nothing is saved to pay for those. They apparently borrowed the full amount for the car, hence the $722 monthly payment.
The student loans if there is ~10 years left will be $3300/month on 300K at 6%.

Their current rent+student loan+car loan is $6822/month. Over 27% of her gross pay just for that. In reality, she is probably only taking home at most 18K/month after taxes. So the rent/studentloan/car loan is 38% of take-home pay---with no retirement savings or college savings at all. It is simply not sustainable.
Since you cannot go back in time to make changes (wait to have kids, continue paying your loans during covid or at least saving it all in the bank to make a huge payment now, etc) , you now need to live with your choices. And that means renting the cheapest place you can (ideally only 2 bedrooms to save), Do you really want to wait until your kids are teens before you are done paying your student loans? Life will be financially much easier if you pay off those loans ASAP. It won't be fun, but it is something that needs to happen.
As PP have mentioned, kids get more expensive. They will want to do activities, you will need to be saving for college soon otherwise you will "never really get rid of your student loans---just move onto saving all you are paying for your kids to go to school". Also if you take 10 years to pay those loans you are paying a ton in interest--not fiscally responsible

[Anonymous]

I don’t think you can afford a house right now.

[Anonymous]

OP - we are two public interest lawyers who graduated into the recession with same amount of debt as you. And who were worried about delaying kids due to biology. And who have experienced periods of underemployment. So, I get it. At $300K HHI (combined) plus two kids in daycare ($3400/month) plus student loans ($2K/month), we rented a two-bedroom apartment for $2900/month. For five years (obviously didn’t have two kids in daycare that entire time but had at least one in that entire time with multiple years overlap). Saving but not a ton. And we missed out on SO MUCH housing appreciation. So my advice would be to buy. I don’t think you can take on more than $500K in a mortgage so that limits you - but there are neighborhoods that could work. Check out close-in Silver Spring (Flora Singer or Oakland Terrace or Rock View are the elementary schools - maybe some others nearby as well). Lots of people with your numbers here in modest three bedroom houses but happy and with room to update/expand as their debts shrink and salaries grow.

[Anonymous]

Anonymous wrote:OP - we are two public interest lawyers who graduated into the recession with same amount of debt as you. And who were worried about delaying kids due to biology. And who have experienced periods of underemployment. So, I get it. At $300K HHI (combined) plus two kids in daycare ($3400/month) plus student loans ($2K/month), we rented a two-bedroom apartment for $2900/month. For five years (obviously didn’t have two kids in daycare that entire time but had at least one in that entire time with multiple years overlap). Saving but not a ton. And we missed out on SO MUCH housing appreciation. So my advice would be to buy. I don’t think you can take on more than $500K in a mortgage so that limits you - but there are neighborhoods that could work. Check out close-in Silver Spring (Flora Singer or Oakland Terrace or Rock View are the elementary schools - maybe some others nearby as well). Lots of people with your numbers here in modest three bedroom houses but happy and with room to update/expand as their debts shrink and salaries grow.

I don't get your situation either with $300K income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP - we are two public interest lawyers who graduated into the recession with same amount of debt as you. And who were worried about delaying kids due to biology. And who have experienced periods of underemployment. So, I get it. At $300K HHI (combined) plus two kids in daycare ($3400/month) plus student loans ($2K/month), we rented a two-bedroom apartment for $2900/month. For five years (obviously didn’t have two kids in daycare that entire time but had at least one in that entire time with multiple years overlap). Saving but not a ton. And we missed out on SO MUCH housing appreciation. So my advice would be to buy. I don’t think you can take on more than $500K in a mortgage so that limits you - but there are neighborhoods that could work. Check out close-in Silver Spring (Flora Singer or Oakland Terrace or Rock View are the elementary schools - maybe some others nearby as well). Lots of people with your numbers here in modest three bedroom houses but happy and with room to update/expand as their debts shrink and salaries grow.

I don't get your situation either with $300K income.

PP - sorry, to clarify, we had periods of underemployment where that 300K was cut in half. So we were pretty risk averse when it came to debt. My point was that risk averseness cost us and so I disagree with everyone saying OP should just keep renting.

[Anonymous]

Anonymous wrote:OP when you add in loans & food your burn rate is already going to be $8000/m. Husband needs to work while kids are in daycare/preschool. Also, you can cut those phone bills in half by asking; internet is too high; car note is insanely high, you could own a good reliable CPO car in two years of what you’re paying to lease. If you’re going to buy, it should be a 2 BR condo that you live a few years till kids are school age, then you can rent it out for income after or sell & roll the equity into a small house. You really need to throw everything at those loans or you will pay them twice over in interest. Does your employer offer any student loan repayment?

But a condo is going to have an HOA. Which will probably run an additional $500(+) per month.

So she will have PITI plus HOA, plus student loans, plus car payment before any other expenses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP - we are two public interest lawyers who graduated into the recession with same amount of debt as you. And who were worried about delaying kids due to biology. And who have experienced periods of underemployment. So, I get it. At $300K HHI (combined) plus two kids in daycare ($3400/month) plus student loans ($2K/month), we rented a two-bedroom apartment for $2900/month. For five years (obviously didn’t have two kids in daycare that entire time but had at least one in that entire time with multiple years overlap). Saving but not a ton. And we missed out on SO MUCH housing appreciation. So my advice would be to buy. I don’t think you can take on more than $500K in a mortgage so that limits you - but there are neighborhoods that could work. Check out close-in Silver Spring (Flora Singer or Oakland Terrace or Rock View are the elementary schools - maybe some others nearby as well). Lots of people with your numbers here in modest three bedroom houses but happy and with room to update/expand as their debts shrink and salaries grow.

I don't get your situation either with $300K income.

PP - sorry, to clarify, we had periods of underemployment where that 300K was cut in half. So we were pretty risk averse when it came to debt. My point was that risk averseness cost us and so I disagree with everyone saying OP should just keep renting.

Even at $150K you should be ok. It's lifestyle choices. If OP can find an affordable house, maybe but affordable under $500K and those homes in the neighborhood you are saying need a lot of work, which she cannot afford.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:HHI - $300k
Student debt - $250k
Car debt and other debt -$50k
Retirement fund, IRAs and 401k balance- $170k
Monthly fixed expenses: $4k

How old are you and how much do you THINK you can afford given the stats you provided? Happy to answer your question and tell you my story if you share that info! I'm guessing I am about 10 years older than you.

Op here: we are 33 and 36. I think $750k mortgage should be OK. Please do share. TIA!

I would suggest you continue renting until you've paid off some more of your debt, frankly. You need to beef up your savings and pay down that $50K of other debt.

[Anonymous]

[mastodon]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP - we are two public interest lawyers who graduated into the recession with same amount of debt as you. And who were worried about delaying kids due to biology. And who have experienced periods of underemployment. So, I get it. At $300K HHI (combined) plus two kids in daycare ($3400/month) plus student loans ($2K/month), we rented a two-bedroom apartment for $2900/month. For five years (obviously didn’t have two kids in daycare that entire time but had at least one in that entire time with multiple years overlap). Saving but not a ton. And we missed out on SO MUCH housing appreciation. So my advice would be to buy. I don’t think you can take on more than $500K in a mortgage so that limits you - but there are neighborhoods that could work. Check out close-in Silver Spring (Flora Singer or Oakland Terrace or Rock View are the elementary schools - maybe some others nearby as well). Lots of people with your numbers here in modest three bedroom houses but happy and with room to update/expand as their debts shrink and salaries grow.

I don't get your situation either with $300K income.

PP - sorry, to clarify, we had periods of underemployment where that 300K was cut in half. So we were pretty risk averse when it came to debt. My point was that risk averseness cost us and so I disagree with everyone saying OP should just keep renting.

Even at $150K you should be ok. It's lifestyle choices. If OP can find an affordable house, maybe but affordable under $500K and those homes in the neighborhood you are saying need a lot of work, which she cannot afford.

Agree. OP would need to look further out. I’m not an expert, but maybe Columbia or Gathersburg. Columbia has good schools. Just commit to a long commute. Maybe rent a two bedroom for a few years, get to know the community, save, and then buy something affordable. Who cares if you miss out on appreciation for a few years?