At odds with spouse ove how much house we can afford

[Anonymous]

Anonymous wrote:

Anonymous wrote:What I don't understand is all of you who say that a HHI of over 1 million cannot afford a 1.7 million house So, WHO is affording all these houses in DC/Bethesda/Chevy Chase. Practically every house in the nice neighborhoods are over 1.2 million! Does everyone in these neighborhoods make over 1 million? I thought you were supposed to use some sort of calculation like 3X your annnual salary is what you can afford in house (assuming at least 20% down). Any realtors out there want to give us an inside scoop on who is buying the "average" CC/Bethesda/NW home?
Personally - we rent an apartment and are nowhere near these numbers - so I can't relate on any level........just curious.

And there are posters here telling OP that she is not saving enough ("read MIL. next door") and is supposed to go with her husband's number!

We make 200k, have 200k+ in cash and think we can afford about 450k home (we don't like anything in that range so we are still renting). Virtually everyone thinks we could afford more. And yet, with OP's money we would look at ~2 mil easily. Even more than that, if the house is right.

Well they aren't saving enough considering the OP wants to liquidate their savings. I'm just flabbergasted that they only have $750k if they have been pulling in this $1mm for 4 or 5 years (whatever she said). Maybe OP's husband is concerned with their budgeting and that is why $1.7 seems too high for him.

[Anonymous]

Anonymous wrote:I think 1.7m is too much to spend in your situation, OP. Your HHI is healthy (obviously), but your savings are pretty low for that HHI, so I think you need to allocate more of your income to savings than to mortgage interest.

I did not see any estimate of your current monthly/yearly spend, which could have a big impact on the answer. You also don't say how stable (or not) your incomes are.

I'd recommend targeting homes in the 1.3m range (plus/minus 200k). We're in a comparable situation to you, and that's our target.

I agree. They would be able to afford $1.7 million on that HHI easily, IF they were socking away significant amounts of money now, which they aren't. If it took them 5 years to save $750,000 with a million HHI, they are spending a LOT of money even before they buy the house. Makes me wonder if the husband is looking at their current spending rate and realizes that they would be saving nothing if they buy the more expensive house.

On the other hand, some people just have a mental block against buying a house that costs more than a million dollars, no matter how much money they make. Having a mortgage of over a million dollars can be scary.

[Anonymous]

OP, come up with a more than generous budget - I mean the max you envision spending on everything (food, travel, daycare, car payments etc.) and then see what it leaves remaining for a house.

Our HHI is about $170k right now. We just purchased a $550k home and put 25% down. Our payment is $2415, which is inline with our maxed out budget. But remember, this is a maxed out budget. So in a couple years when both kids are in public, we will find ourselves a bit ahead. And we do have room for income growth, so again, we will be a bit ahead in a few years.

If we wanted to, we could have gone up to about $4k for our PITI, because we could have cut our budget by $1500, but that would mean giving up eating out, cutting down on travel, eliminating a wedding fund etc. You need to know what else you want to spend money on before knowing how much you can spend on a house. Sure you may be able to spend $1.7 million on a restricted budget, but maybe the other things are more important and therefore a less expensive home is the smart move.

And before anyone jumps on me, we have maxed out retirement and college savings is slightly above what the calculators say it should be.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think 1.7m is too much to spend in your situation, OP. Your HHI is healthy (obviously), but your savings are pretty low for that HHI, so I think you need to allocate more of your income to savings than to mortgage interest.

I did not see any estimate of your current monthly/yearly spend, which could have a big impact on the answer. You also don't say how stable (or not) your incomes are.

I'd recommend targeting homes in the 1.3m range (plus/minus 200k). We're in a comparable situation to you, and that's our target.

I agree. They would be able to afford $1.7 million on that HHI easily, IF they were socking away significant amounts of money now, which they aren't. If it took them 5 years to save $750,000 with a million HHI, they are spending a LOT of money even before they buy the house. Makes me wonder if the husband is looking at their current spending rate and realizes that they would be saving nothing if they buy the more expensive house.

On the other hand, some people just have a mental block against buying a house that costs more than a million dollars, no matter how much money they make. Having a mortgage of over a million dollars can be scary.

If you consider net income is about $650k, college tuitions are paid off and we have another $500k in non-liquid assets (retirement accounts etc.) what do you consider would be a more reasonable savings rate? If you add it all up, we have over $1.3M in savings, a little over half "get-at-able". Heretofore, I thought our savings rate was pretty good. I guess I will have to read Millionare Next Door.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think 1.7m is too much to spend in your situation, OP. Your HHI is healthy (obviously), but your savings are pretty low for that HHI, so I think you need to allocate more of your income to savings than to mortgage interest.

I did not see any estimate of your current monthly/yearly spend, which could have a big impact on the answer. You also don't say how stable (or not) your incomes are.

I'd recommend targeting homes in the 1.3m range (plus/minus 200k). We're in a comparable situation to you, and that's our target.

I agree. They would be able to afford $1.7 million on that HHI easily, IF they were socking away significant amounts of money now, which they aren't. If it took them 5 years to save $750,000 with a million HHI, they are spending a LOT of money even before they buy the house. Makes me wonder if the husband is looking at their current spending rate and realizes that they would be saving nothing if they buy the more expensive house.

On the other hand, some people just have a mental block against buying a house that costs more than a million dollars, no matter how much money they make. Having a mortgage of over a million dollars can be scary.

If you consider net income is about $650k, college tuitions are paid off and we have another $500k in non-liquid assets (retirement accounts etc.) what do you consider would be a more reasonable savings rate? If you add it all up, we have over $1.3M in savings, a little over half "get-at-able". Heretofore, I thought our savings rate was pretty good. I guess I will have to read Millionare Next Door.

I don't think of the college money or retirement money as something you should touch except for the intended purpose. So lets just remove those two from the equation. That said, how much savings do you have?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think 1.7m is too much to spend in your situation, OP. Your HHI is healthy (obviously), but your savings are pretty low for that HHI, so I think you need to allocate more of your income to savings than to mortgage interest.

I did not see any estimate of your current monthly/yearly spend, which could have a big impact on the answer. You also don't say how stable (or not) your incomes are.

I'd recommend targeting homes in the 1.3m range (plus/minus 200k). We're in a comparable situation to you, and that's our target.

I agree. They would be able to afford $1.7 million on that HHI easily, IF they were socking away significant amounts of money now, which they aren't. If it took them 5 years to save $750,000 with a million HHI, they are spending a LOT of money even before they buy the house. Makes me wonder if the husband is looking at their current spending rate and realizes that they would be saving nothing if they buy the more expensive house.

On the other hand, some people just have a mental block against buying a house that costs more than a million dollars, no matter how much money they make. Having a mortgage of over a million dollars can be scary.

If you consider net income is about $650k, college tuitions are paid off and we have another $500k in non-liquid assets (retirement accounts etc.) what do you consider would be a more reasonable savings rate? If you add it all up, we have over $1.3M in savings, a little over half "get-at-able". Heretofore, I thought our savings rate was pretty good. I guess I will have to read Millionare Next Door.

I don't think of the college money or retirement money as something you should touch except for the intended purpose. So lets just remove those two from the equation. That said, how much savings do you have?

Probably $850K we could access tomorrow when banks open. College Tuitions and retirement monies not included in this number.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think 1.7m is too much to spend in your situation, OP. Your HHI is healthy (obviously), but your savings are pretty low for that HHI, so I think you need to allocate more of your income to savings than to mortgage interest.

I did not see any estimate of your current monthly/yearly spend, which could have a big impact on the answer. You also don't say how stable (or not) your incomes are.

I'd recommend targeting homes in the 1.3m range (plus/minus 200k). We're in a comparable situation to you, and that's our target.

I agree. They would be able to afford $1.7 million on that HHI easily, IF they were socking away significant amounts of money now, which they aren't. If it took them 5 years to save $750,000 with a million HHI, they are spending a LOT of money even before they buy the house. Makes me wonder if the husband is looking at their current spending rate and realizes that they would be saving nothing if they buy the more expensive house.

On the other hand, some people just have a mental block against buying a house that costs more than a million dollars, no matter how much money they make. Having a mortgage of over a million dollars can be scary.

If you consider net income is about $650k, college tuitions are paid off and we have another $500k in non-liquid assets (retirement accounts etc.) what do you consider would be a more reasonable savings rate? If you add it all up, we have over $1.3M in savings, a little over half "get-at-able". Heretofore, I thought our savings rate was pretty good. I guess I will have to read Millionare Next Door.

I don't think of the college money or retirement money as something you should touch except for the intended purpose. So lets just remove those two from the equation. That said, how much savings do you have?

Probably $850K we could access tomorrow when banks open. College Tuitions and retirement monies not included in this number.

I'm the PP. I've read the thread, and based on everything you have said, I don't see why you can't afford $1.7million. Have you talked to your DH about how much of your $850k he is comfortable using as a down payment on a house? You said you expect about $250k from the sale of your house, so I think using about half of what you have in savings, to get to a $1 million mortgage would be OK, and still leave you with about $400k in savings. You bring home about $50k a month - have you figured out what you spend now? (I'm also the PP that suggested the very generous budget). I'd think your PITI on a $1 million mortgage, assuming 40% down, would be close to $10,000. I'd hope you could live on the remaining $40k a month.

I suggest making the budget and showing your husband it is possible. Some people are visual and need to see the numbers. Talking about it may not be enough.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What I don't understand is all of you who say that a HHI of over 1 million cannot afford a 1.7 million house So, WHO is affording all these houses in DC/Bethesda/Chevy Chase. Practically every house in the nice neighborhoods are over 1.2 million! Does everyone in these neighborhoods make over 1 million? I thought you were supposed to use some sort of calculation like 3X your annnual salary is what you can afford in house (assuming at least 20% down). Any realtors out there want to give us an inside scoop on who is buying the "average" CC/Bethesda/NW home?
Personally - we rent an apartment and are nowhere near these numbers - so I can't relate on any level........just curious.

I think we can afford this much, hence my dilemma.

That's not a dilemma. A dilemma would be having to choose between sleeping in a shelter or pitching a tent in the woods.

Trying to decide between price points above $1 million is most certainly not a dilemma.

Why do people continually use the wrong word in these forums? It's flabbergasting sometimes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What I don't understand is all of you who say that a HHI of over 1 million cannot afford a 1.7 million house So, WHO is affording all these houses in DC/Bethesda/Chevy Chase. Practically every house in the nice neighborhoods are over 1.2 million! Does everyone in these neighborhoods make over 1 million? I thought you were supposed to use some sort of calculation like 3X your annnual salary is what you can afford in house (assuming at least 20% down). Any realtors out there want to give us an inside scoop on who is buying the "average" CC/Bethesda/NW home?
Personally - we rent an apartment and are nowhere near these numbers - so I can't relate on any level........just curious.

I think we can afford this much, hence my dilemma.

That's not a dilemma. A dilemma would be having to choose between sleeping in a shelter or pitching a tent in the woods.

Trying to decide between price points above $1 million is most certainly not a dilemma.

Why do people continually use the wrong word in these forums? It's flabbergasting sometimes.

I can't believe this thread is this long!! Just talk to your friggin' accountant who finds all your tax loopholes and have him tell you how much to buy... seriously... the fact you can even afford over a million is a luxury already and can buy you plenty of house in any neighborhood as far as i'm concerned...

[Anonymous]

Lifestyles of the rich and stupid

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What I don't understand is all of you who say that a HHI of over 1 million cannot afford a 1.7 million house So, WHO is affording all these houses in DC/Bethesda/Chevy Chase. Practically every house in the nice neighborhoods are over 1.2 million! Does everyone in these neighborhoods make over 1 million? I thought you were supposed to use some sort of calculation like 3X your annnual salary is what you can afford in house (assuming at least 20% down). Any realtors out there want to give us an inside scoop on who is buying the "average" CC/Bethesda/NW home?
Personally - we rent an apartment and are nowhere near these numbers - so I can't relate on any level........just curious.

I think we can afford this much, hence my dilemma.

That's not a dilemma. A dilemma would be having to choose between sleeping in a shelter or pitching a tent in the woods.

Trying to decide between price points above $1 million is most certainly not a dilemma.

Why do people continually use the wrong word in these forums? It's flabbergasting sometimes.

So what's the right word. You're really "flabbergasted" this was referred to as a dilemma? Is that the correct word? Is it a dilemma if you divide all the numners by 4. Then think about it in those terms if that is more manageable for you.

[Anonymous]

Wahhhhhh I want a two story gift wrapping room

[Anonymous]

Anonymous wrote:Wahhhhhh I want a two story gift wrapping room

Yup, that's totally in the spirit of this post. Thanks for the input!

[Anonymous]

You can have fun with the kids on as little as 1/8th of an acre. (0.12 acres.) I know because that's the size of yard that we have in North Arlington and we are very happy with it. Upkeep doesn't take a ridiculously long time, and there's plenty of space for playing. We also live 0.5 mile from a really awesome playground/park and we go there a lot.

I would look for something around $1.2M - you can't find new (and close-in) for that, but you could probably find something nice and your husband wouldn't be freaking out over money all the time.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What I don't understand is all of you who say that a HHI of over 1 million cannot afford a 1.7 million house So, WHO is affording all these houses in DC/Bethesda/Chevy Chase. Practically every house in the nice neighborhoods are over 1.2 million! Does everyone in these neighborhoods make over 1 million? I thought you were supposed to use some sort of calculation like 3X your annnual salary is what you can afford in house (assuming at least 20% down). Any realtors out there want to give us an inside scoop on who is buying the "average" CC/Bethesda/NW home?
Personally - we rent an apartment and are nowhere near these numbers - so I can't relate on any level........just curious.

I think we can afford this much, hence my dilemma.

That's not a dilemma. A dilemma would be having to choose between sleeping in a shelter or pitching a tent in the woods.

Trying to decide between price points above $1 million is most certainly not a dilemma.

Why do people continually use the wrong word in these forums? It's flabbergasting sometimes.

So what's the right word. You're really "flabbergasted" this was referred to as a dilemma? Is that the correct word? Is it a dilemma if you divide all the numners by 4. Then think about it in those terms if that is more manageable for you.

Yes, twatwaffle. A "dilemma" by definition is having to choose between two bad options. Jesus, you're not very smart, are you?