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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]OP, we are in a similar situation to you. We are under contract to buy a $900K home. We are currently in a sh*tty school district, area w/ higher crime than we feel comfortable with, etc. It feels ridiculous to us, too, given our HHI, but it is a stretch for us to buy the $900K home. HHI is $340K. That will go up to $400K next month when the one of us who is not currently employed starts working. Nanny is $50K/yr. Pre-school $15K. We are paying off law and grad school debt, have 1 car note at $350/mo, pay for life insurance, disability insurance, college savings, retirement savings, emergency savings, etc. We take a modest 1 wk. vacation (maybe $2-3K) every 2-3 yrs. We are putting down $180K, and with closing costs added, that's $210K. We saved 3/4 of this, but I am taking a loan from my 401K to fund the balance. A loan means no tax penalty--it has a 4% rate and I'll pay it off from paycheck deducts over 2 years. To us, it was the right thing to do, b/c our children are almost school age so the school issue is looming, the interest rate we are getting on our new mortgage (3.875% on first trust, 4.25% on 2nd) is historically unprecedented and makes our monthly payment $3,600ish, with insurance and taxes added, $4600ish. That's definitely doable on our take home, but after paying for life and disability insurace, college savings, retirement savings that are not as great as I'd like them to be, etc., there is very little left. This is a very expensive area to live in, espec. if you want to be in the better school districts.[/quote]

Wow. Live in a 3300 square foot home in a great school district that is worth $750,000, and I have a 10 minute commute to work. I'd say really broaden your thinking.[/quote]

Huh? Broaden our thinking how? Being close to our offices is important for us, too. The neighborhood in which we are buying is the perfect location to keep both of our commutes to a minimum, give us excellent schools, wonderful neighbors, a house we love, be 4 blocks to the Metro, stores, etc. so we can walk instead of drive everything. The house also has a full in-law suite for our in-law moving to live with us. We've been looking for a year and a half and it's not easy to find that combination of elements. The difference between a $750K and $900K mortgage, in terms of monthly payments, is $750/mo--[b]once our kids are in school in 1 and 2 years, respectively, our $50K in nanny cost and $12.5K in preschool cost goes away (Hallelulah!), giving us $5000 more in cash flow per month.[/b] Worth it, IMO, to suck up 1-2 more years of not having much excesss cash flow, to buy in this location, w/ these interest rates, now. [/quote]

Bwahahaha - that's what I thought would happen, too.  But no.  After kids start school, they still need experiences and things, all of which suck up that cash flow.[/quote]

What 'experiences' cost $5k/month??[/quote]

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