Reply to If you bought a house over $1.5 were you able to afford to do so on your salaries or equity?

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Reply to "If you bought a house over $1.5 were you able to afford to do so on your salaries or equity?"

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[quote=Anonymous]HHI 625k.  Both in our late 30s and have kids.  No family help.  Here were our simple rules/thought process to keep ourselves set on solid financial footing/not house poor when we were house-hunting last year:

-Unless major family catastrophe, our household budget requires that we must invest at least 20% gross HHI/yr and max the kids 529s.  So had to keep this up the year we bought a house.
-350k in equity from prior house, which we could use up to 100k for improvements in the new place but not for the downpayment
-max mortgage could not more than 2.5x HHI since this is a VHCOL area (when we lived in a normal COL area, it was 2x) -- most of the online calculators of how much you can "afford" are very inflated

So this put our max house budget at just over 1.9mil.

We ended up getting a great house for far less than that with a mortgage at 1.7x our gross and are very happy.  I still don't like how big our mortgage is, but we can easily cover it.  We have friends with similar HHI who bought places in the 1.7-2mil range and they're happy with their houses...but every so often when they have a big expense come up (car purchase, vacation, etc) they gripe about how big their mortgage is.  No thanks.

While the housing market is red-hot and you'll likely pay more than you'd "hoped" going into it...at the end of the day YOU control your purse strings.  Don't overbuy.

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