Reply to At odds with spouse ove how much house we can afford

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I think 1.7m is too much to spend in your situation, OP.  Your HHI is healthy (obviously), but your savings are pretty low for that HHI, so I think you need to allocate more of your income to savings than to mortgage interest.

I did not see any estimate of your current monthly/yearly spend, which could have a big impact on the answer.  You also don't say how stable (or not) your incomes are.

I'd recommend targeting homes in the 1.3m range (plus/minus 200k).  We're in a comparable situation to you, and that's our target.[/quote]

I agree.  They would be able to afford $1.7 million on that HHI easily, IF they were socking away significant amounts of money now, which they aren't.  If it took them 5 years to save $750,000 with a million HHI, they are spending a LOT of money even before they buy the house.  Makes me wonder if the husband is looking at their current spending rate and realizes that they would be saving nothing if they buy the more expensive house.

On the other hand, some people just have a mental block against buying a house that costs more than a million dollars, no matter how much money they make.  Having a mortgage of over a million dollars can be scary.  [/quote]

If you consider net income is about $650k, college tuitions are paid off and we have another $500k in non-liquid assets (retirement accounts etc.) what do you consider would be a more reasonable savings rate?  If you add it all up, we have over $1.3M in savings, a little over half "get-at-able".  Heretofore, I thought our savings rate was pretty good.  I guess I will have to read Millionare Next Door.[/quote]

I don't think of the college money or retirement money as something you should touch except for the intended purpose.  So lets just remove those two from the equation.  That said, how much savings do you have?  [/quote]

Probably $850K we could access tomorrow when banks open.  College Tuitions and retirement monies not included in this number.[/quote]

I'm the PP.  I've read the thread, and based on everything you have said, I don't see why you can't afford $1.7million.  Have you talked to your DH about how much of your $850k he is comfortable using as a down payment on a house?  You said you expect about $250k from the sale of your house, so I think using about half of what you have in savings, to get to a $1 million mortgage would be OK, and still leave you with about $400k in savings.  You bring home about $50k a month - have you figured out what you spend now?  (I'm also the PP that suggested the very generous budget).  I'd think your PITI on a $1 million mortgage, assuming 40% down, would be close to $10,000.  I'd hope you could live on the remaining $40k a month.

I suggest making the budget and showing your husband it is possible.  Some people are visual and need to see the numbers.  Talking about it may not be enough.     [/quote]

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