Reply to Afford $1.8M on 300K?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]We have HHI at 450K and bought a 1.8m house last year. Monthly payment is around $8000 including tax and insurance. We don't have other debt and no car loan. Monthly utilities is around $500.

So without doing anything, it is already $8500 going out every month. We also max out 401K and other stock purchase plans but cut travel and goods spending for almost half year.

I just hope the property tax will not go higher next year. [/quote]

PP, can I ask what made you decide to take on such a huge monthly mortgage? Are you expecting salary increase or some windfall to pay it down? We are similar HHI but find it very mind blowing to have such high portion of take home pay into housing. Please help us think it through.[/quote]

PP here. We took on the mortgage because of low rate at 2.75% for 30 years and we do expect salary increase and some positive cash flow from our investiment property (luckily I got it rented out last month.). For the $8000 monthly payment, we are expecting a refund from escrow account for overestimating the property tax so next year the monthly payment including tax and insurance could reduce to $7600. We also expect the housing price around DMV to be more stable than other areas such as Florida, Arizona, and Texas. The principle part of the monthly payment (around $2700) is deemed as monthly saving towards equity value of the house. [/quote]

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