Reply to $410k house with DH salary stretching ourselves too thin?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]We found a house we love but my gut says we can't afford it.  My DH makes $84k plus bonus (usually 10%) and I SAH.  We have 20% for down payment but would have just $10k left in savings.  We have tiny amount of student loan debt and no other debt.

My gut says it's too much of a stretch but the numbers say it's do-able.

What do you think?[/quote]

What's your future HHI income potential?

How many kids? How old? Are you done having kids?

What do you pay in rent now? How is that working out/how does it compare?

Are you willing to go back to work to pick up the slack if needed or go back to work eventually?

My hunch is it would be tight for a while but things would get better as your income increases and housing payments stay stable.[/quote]
This.  
We did it- our income has increased 35% in two years.  You'll be fine.[/quote]

[b]You're kidding, right?  The average increase in the Washington DC area is between 0-2% annually over the last several years.  You may have had a 35% increase in 2 years, but the majority of the region did not.  [/b]

OP--you have some homework to do.  First, you have to figure out what your absolute minimum monthly expenses will be.  You should set aside 4-6 months worth of those payments that you don't touch.  Those are emergency funds in case your husband gets laid off or fired.  While his job may seem stable, in the last several years, millions of Americans who thought they had stable jobs have been laid off or fired.  The current job market still has very high unemployment rates (9% in MD, 11% in VA, 19% in DC), that does not include the many who have dropped off of the employment rolls because they fell off of unemployment, but are still looking,  and there are many more candidates for every job out there than ever before.  So, now, average time to get a replacement job is months instead of days or weeks.  You need to factor that in.

After all of that, you can expect to need to put some money into the house after you purchase it (repairs, maintenance, furniture, etc).  And $10K is really not going to cover all that and still give you security.  You should either consider waiting and saving more, looking for a less expensive house, or looking into alternative financing including possible getting an FHA loan (which would allow you to put down less money and not have to have PMI, since FHA is the mortgage guarantor) or trying to get a 80-10 or 80-5 loan so that you can put down less.

A situation like yours is usually unsustainable over the long haul.  You need to consider how you will get out of that situation.  As some suggest, increasing your HHI is one way.  Decreasing your mortgage payments or expenses is another.

Unless you are very strict with yourself and trustworthy, you don't want to do this.  You'll be very house-poor, cash-strapped and stressed.  This type of stress (money stress) is the single biggest contributing factor to divorces.   How well do you and DH handle money stress?  Is that going to cause one or both of you enough trouble that it will threaten your marriage?[/quote]

You do know you don't have to work for the same employer forever right?  Or did that info not reach you out in neverneverland.[/quote]

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