Reply to Who can afford 800K-1M homes? Genuine Curiosity!

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]
A sub.300k income and 700k mortgage is irresponsible[/quote]

What an ignorant blanket statement to make. Come on.[/quote]

Agree- an assessment about what's financially prudent depends on a careful evaluation of an individual household's finances.

Given the high housing costs in the DC area, a front-end ratio (percentage of gross monthly income to housing costs, standard measure to assess financial eligibility for mortages) of 28-33% is entirely reasonable. Assuming it works with your back end ratio (% to total debt obligations), a sub-300k household can responsibly service a mortage of 700k.

A 30 year fixed jumbo at 3.875 would yield a PITI payment of around $4050 which could potentially be affordable to household incomes well below $300k assuming low levels of other debt.

If you are not comfortable with it then you're lucky no one is going to force you to take out a mortgage of that size. I work alongside plenty of professionals with 200-300k HHIs with $700k range mortgages.  Most of them have one or more graduate degrees and are in professions with very low unemployment levels and have long-term income growth potential- they are perfectly responsible in taking on mortgage debt of this size after they have been carefully vetted by a lender. 
[/quote]

this is us to a tee.  So we have 8K to live off per month after housing costs.  pity us![/quote]

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