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

[Anonymous]

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?

[Anonymous]

Yes you screwed up.

[Anonymous]

Do you have childcare expenses?

[Anonymous]

The answer, as always, is that it depends. What is your monthly net and what are your typical monthly expenses? How much extra do you have?

If your kids are not in very expensive activities and you guys have a relatively lean budget you should be fine.

[Anonymous]

I mean that seems like a lot but if you make it a budget priority then doable. We bought a 550k house on 170k HHI with 50k down. Our HHI has increased about 50k since then and our mortgage is about 2800. We feel like we have plenty of. money to spare so we could definitely do 1k more a month in mortgage, but yes, it would be a lot.

[Anonymous]

Your gross income is irrelevant, as I assume you are only bringing home a fraction of that after taxes, insurance, 401k, etc. What is your take-home?

Only you know if this is comfortable for you. Strangers on the internet can’t tell you based on a few details.

[Anonymous]

It seems reasonable to me.

How secure is the income? Do you expect raises going forward?

[Anonymous]

what are you contributing toward retirement, and what is your take home pay after that?

[Anonymous]

What is your takehome income less $3,700. Whatever it is, you certainly can live on it. And what were you spending on non-housing costs before? If it was similar, just continue as is. If it was more, then adjust your budget as necessary.

[Anonymous]

I don’t think so, but I would have personally wanted a larger downpayment with that situation. That monthly mortgage would have been too much for us. Our house was similarly priced and we have a similar joint income but we saved until we had a downpayment quite a bit more than yours. So as long as your jobs are stable you’ll be ok! Downside is you’ll be paying for college and your mortgage together unless you can pay it off faster.

[Anonymous]

Well it's done right? Time to keep expenses low and look for raises or promotions at work.

[Anonymous]

Seems crazy to me. You have multiple kids, didn't have a 20% down payment, and are talking about percentage of gross because percentage of net scares you.

[Anonymous]

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.

[Anonymous]

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.

[Anonymous]

Only thing you will ever do is work to pay for this house.