Reply to Would you take a $950k mortgage on 300k salary?

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[quote=Anonymous]We took a $700k mortgage with a HHI of $175k, though that was at 3% (PITI about $4200). No regrets. Your PITI would be, what $7500? Monthly take home (before savings and health insurance) is about $16k? Leaving you $8500 to live on. Of course you can live on $8500 if you want to.

Here's the thing. Once you've got more than about $100-$200k a year (depending on exact details), you're covering all your basic needs. A small house near-ish to your work, cheap car, utilities/insurance, basic clothes, adequate nutritious food on a reasonable budget, childcare, some savings.

The money above that you can use however you want.

You'd be spending a huge chunk of your additional money on housing. That means you may have to, otherwise, live like someone who makes $150k. That means a grocery budget, cheaper extracurriculars for the kids, limited nights out, local low-cost vacations, clothes from Target, used car you drive for 10 years. If the nicer house is your priority, then that makes perfect sense. Just make sure you realize that if you do that, you're going to be sticking to the basics in other areas. No keeping up with the Joneses. Make a sample budget, and if you're comfortable with it, do it. [/quote]

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