What does that put your monthly payments at? A little over 5000? That seems very doable. We took out a 350k mortgage when HHI was 150k and we had 1200 or so in monthly student loan payments. We never felt even slightly stretched by it. You're at twice the income with no student loans, so that seems like you could afford 3 times as much house. Our HHI now is about 220k and once we get rid of student loans I would consider buying a house in that range - it's pushing it a bit, but we could definitely do it with little/no sacrifice.

Anonymous wrote:

Anonymous wrote:We are looking at a $1.2M house on a $400k HHI with about 40% down. No other debts as well. Honestly, even on the higher income with a larger down payment, I'm worried it will feel tight.

Really? What else do you spend money on? Private school?

We have a 1.2 m house and put 20% down. We make about 400K and it has never felt tight. We have one child in daycare and two pretty expensive cars (both leased).

agree with previous poster. What do you spend money on that you think this will be tight?
You must have significant private school costs or high end spending habits.

We have a 1.35 million dollar (purchase price) home with $750K mortgage on a $385K HHI and we save about $80K a year in addition to two 401ks (18K plus match each).
We spend about $15-18K a year in childcare (summer camps for 3 kids plus sports/activities but no formal childcare).

Otherwise we live a simple life (Old Navy, one paid-for Honda, Giant, public school),

You should be more than fine unless you're used to or want a high end life.

Anonymous wrote:We are looking at a $1.2M house on a $400k HHI with about 40% down. No other debts as well. Honestly, even on the higher income with a larger down payment, I'm worried it will feel tight.

Really? What else do you spend money on? Private school?

We have a 1.2 m house and put 20% down. We make about 400K and it has never felt tight. We have one child in daycare and two pretty expensive cars (both leased).

Yeah no problem

Wow, how are you making $3k/month in passive investments?
Are those paid off condos?

Do you like expensive vacations? LV bags? How often do you replace your cars and what do you spend on them? There are a lot of unknowns here.

Of course. No problem.

What's the retirement strategy? Funding for college? I'd want to have a strong strategy there before considering that size mortgage.

We are looking at a $1.2M house on a $400k HHI with about 40% down. No other debts as well. Honestly, even on the higher income with a larger down payment, I'm worried it will feel tight.

Ok, I assume this thread is going to get moved. But OP, what are your passive investments??

OP here. Appreciate the replies! I meant to post this is the finance forum.

With respect to income growth, we are expecting steady increases at about 5% per year for the next 5-7 years and then likely a bigger jump in one of the salaries ($100k or more) before we hit 40. We are also planning on increasing our passive income by about $1,000/mo net every year, though the money we can put into our passive investments may slow down if we get a bigger mortgage.

What's the outlook for income growth?

Only if you have 1) maxed out 401k/retirement contributions, 2) have started 529s for both kids and are on track to meet college savings goal, 3) have 6 mos in an emergency fund, 4) savings for unexpected expenses that aren't emergencies (life happens Fund)

Even then, I might not. We prefer a 15 yr mortgage that we can afford on 1 salary should one of us get laid off plus all of the above.

$300k gross annual wages plus $3k/mo net income (post-tax) from passive investments. We have two kids but no daycare costs. Also no student loan debt. $500/mo for car and $500/mo for extended family support. We are in our early 30s. We both work and our jobs are pretty stable (and wages are not based on sales or bonus) but still susceptible to the economy as most jobs. We plan to put 20% down and get a 30 year mortgage. Our original budget was $900k but found a house for $1.3m that we like. Based on comps, we would be comfortable offering/paying $1.2m for the house.