Reply to Another can we afford this post, HHI $325k

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[quote=Anonymous][img][quote=Anonymous][quote=Anonymous][quote=Anonymous]$325,000 after Fed, State, and Payroll Taxes is likely around $250,000 take home. Assuming you are contributing fully to 401(k) and Roth IRAs, that's $64,000 a year to savings, which is a good target at just about 20%. That leaves $186,000 for spending, or $15,500 a month.

I don't know what kind of loan you are looking at or the home insurance/HOA/Property Tax fees, but using your number of $6,500, you'd be putting 42% of your take-home pay to your PITI. Using a general metric that fixed costs should not be more than 60% of your take-home pay, that would leave only $2,800 for other fixed costs like car payments, gas, daycare, groceries, out of pocket medical, pets, insurance, home maintenance, and all utilities - electric, gas, phone, water, sewer. That's very tight, probably impossible. So your fixed costs would be high compared to your take home pay.

That would put stress on your ability to do other savings like college and brokerage accounts, plus limit vacation fund, entertainment, eating out, clothing, gifts, and other discretionary purchasing.

It just depends what kind of life you want to live. If you think you will love this house and it's worth putting a huge chunk of your earnings to it every month, I think you will manage. If your income grows, even better, and things will loosen up. But I do think it will feel tight. You'll probably have to save less than 20% to retirement and take smaller vacations.

Run some numbers yourself. See if that's the life you want.[/quote]

The metric I have heard is that PITI should not be more than 25% of net.

I would not do this deal in a million years but I also have no desire to live in a TH and be house poor.

Granted sounds like OP is counting on inheritance money and [b]doesn’t need the appreciation she would see from a SFH[/b].

[/quote]

If townhouses are going for 1.3M in that area, OP definitely can't definitely afford a SFH anywhere close. They're likely priced at more than twice that amount.

We bought a 2800 sqft TH for 1.1M back in 2016 in a really sought-after school district. Now, it's valued at 1.7M. 
We're really pleased with that appreciation. Our friends who bought SFHs in the same price range but in less desirable locations aren't seeing the same appreciation.

[/quote]

You’re comparing apples and oranges. Good school districts will always have better resale value than mediocre ones regardless of housing type. [/quote]

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