Anonymous wrote:
This is about how I view most of these situations as well. My own situation is a little sticky because one of us is in private industry (technology) and makes SO much more than the other (me, the saving the world nonprofit manager), so to buy a home on one salary is tricky in that if I lost my job we would be fine but if he lost his job it would be much more difficult. At the same time it feels far too cautious to buy a home based on my 65K salary when there is a person earning 3 times that nearly in the equation.

I'm so with you. My husband is in a much higher paying career (and we still have a HHI of "only" $140Kish). If we'd bought based on just my salary...well, honestly we couldn't have. There is nothing in this area where a family could live comfortably on just MY salary. My salary allows us to put money in savings, and that's about it. When my job almost went away last summer, we had to tighten our belts, cut our savings and lived on just his salary for a short time.

This is why we STAYED in this area, though - my husband felt he had a lot more possible employment options here in case of a job loss for him, so that we wouldn't be completely screwed.

It is a tad naive to think that nothing in your circumstances will ever change. Job loss, family illness, simple change in what you want to do with your life (hard to believe now but when your kids get into elem school they get much more interesting and you may want to get more involved at their school) - these are all things that happen to other people...until they happen to you

Bottom line is you should give yourself the freedom to deal with these life changes without having to consider whether you can pay the mortgage. You should buy based on one person's income if you can.

Remember that on one salary your marginal tax rate is lower, and in this area you may then avoid AMT. It can make your monthly take-home significantly more than half the two-earner total.

Anonymous wrote:

Anonymous wrote:We are looking to have a max mortgage (not total sales price) of 540K. Technically this means we could afford the house on one salary (although we could not afford daycare and house on one salary). This puts our PITI at $2800 or so.

I don't think that the math is quite right- our $500K mortgage at 3.65% (30yf) with PITI is about $3150, Arlington taxes, no PMI.

Most financial advisers will tell you not to spend more than 30% of your income (I'd use net) on housing. Assuming that your salaries are roughly $150/$150 (for your $300 HHI) and you want to be conservative just use ~30% of a single income (my $150K nets $8200/month before retirement contributions so our $3150 PITI is about 38% of that single income). Adding all mandatory expenses, including retirement and our life exceeds the single earner income by about $750. Our reserves are 12 months of double that deficit.

I think the math is close. Our $524K mortgage at 3.25%, 30-year fixed, with PITI is $2850. Falls Church, no PMI. We just refinanced. When we were at 4.25%, our PITI payment was $3280. We can also swing the payment with one, but it would be really painful on a super tight budget.

Anonymous wrote:Maybe you could buy more house than you could afford on one salary, but less house than you could buy on two? Like if you could afford a $300K mortgage on one salary and a $600K mortgage on two, go for a $450K mortgage? Over-simplifying, obviously.

I have an HHI of about $100K as a single person. (plus child support that covers preschool.) I can afford a decent house in my desired area (though not walkable to metro, or huge, or new) but if I were married to someone with a similar income, we wouldn't have spent twice the money - we would have spent another couple hundred thou and gotten something just a little nicer.

This is about how I view most of these situations as well. My own situation is a little sticky because one of us is in private industry (technology) and makes SO much more than the other (me, the saving the world nonprofit manager), so to buy a home on one salary is tricky in that if I lost my job we would be fine but if he lost his job it would be much more difficult. At the same time it feels far too cautious to buy a home based on my 65K salary when there is a person earning 3 times that nearly in the equation.

Anonymous wrote:

Anonymous wrote:A decent new home close in with good schools its going to run you 1.2 million and up.

We got ours for half that. It all depends what compromises you are prepared to make (ours is on a main road).

I am curious where you can buy a new home inside the beltway with good schools for 600k.

Anonymous wrote:A decent new home close in with good schools its going to run you 1.2 million and up.

We got ours for half that. It all depends what compromises you are prepared to make (ours is on a main road).

Anonymous wrote:We are looking to have a max mortgage (not total sales price) of 540K. Technically this means we could afford the house on one salary (although we could not afford daycare and house on one salary). This puts our PITI at $2800 or so.

I don't think that the math is quite right- our $500K mortgage at 3.65% (30yf) with PITI is about $3150, Arlington taxes, no PMI.

Most financial advisers will tell you not to spend more than 30% of your income (I'd use net) on housing. Assuming that your salaries are roughly $150/$150 (for your $300 HHI) and you want to be conservative just use ~30% of a single income (my $150K nets $8200/month before retirement contributions so our $3150 PITI is about 38% of that single income). Adding all mandatory expenses, including retirement and our life exceeds the single earner income by about $750. Our reserves are 12 months of double that deficit.

Maybe you could buy more house than you could afford on one salary, but less house than you could buy on two? Like if you could afford a $300K mortgage on one salary and a $600K mortgage on two, go for a $450K mortgage? Over-simplifying, obviously.

I have an HHI of about $100K as a single person. (plus child support that covers preschool.) I can afford a decent house in my desired area (though not walkable to metro, or huge, or new) but if I were married to someone with a similar income, we wouldn't have spent twice the money - we would have spent another couple hundred thou and gotten something just a little nicer.

PP here.
Two earners, each $150k. House payment $3600/month. Only one child in daycare at a time (kids are 4 years apart). We also expect some career growth and salaries closer to $200k later on.

PP here. I help people with their personal finances as a hobby.

We are in the process of closing on a house that we could afford on one person's salary. I have seen a lot of people who purchased houses that require pretty much both of them to work and this has put a lot of stress on them. You might not feel this stress right now when both of you have jobs that you probably like and enjoy but if something changes even for one of you, you would just put needless stress on your lives.

Just knowing that one of us do not need to work makes life less stressful. Even at work just the fact that you do not have to work, makes work less stressful. No needless pressure at performance review time, promotions, office politics, etc. You can just ignore it all. This in turn translates to a more time with children and more importantly focus on your children when you spend the time with them. No checking your office mail on your phone, etc. when you are with your kids.

In our own case the maximum we are willing to pay is mortgage on one person's salary and a purchase price which is 50% of our net worth. So we would be able to write a check for the whole house if we ever wanted to. The other 50% of net worth is in retirement accounts so cannot be used for paying off the house. So your DH is probably not ridiculously conservative compared to me

A decent new home close in with good schools its going to run you 1.2 million and up.

We did just that. We nearly paid cash for our home, my DH is a wealth manager and has been witness to fnancial disasters. We chose the neighborhood, close to the city in VA, then then home, a fixer upper. We save nearly most our wages. I work part-time, and am sort of ready to call it quits and stay home. If we both became unemployed, our lifestyle wouldn't change, and our children's would continue on.

Our home is small, 1,800 sq ft., but we constantly declutter and our attic is organized but full. I feel like we really get to enjoy our lives, financial worries not only suck, but can take years off your life - and ages you. Forget that!!! Forget what other people buy and spend on their homes, financial freedom not only enhances your life, it keeps wrinkles at bay.

We are looking to have a max mortgage (not total sales price) of 540K. Technically this means we could afford the house on one salary (although we could not afford daycare and house on one salary). This puts our PITI at $2800 or so.

This will get us a house in S. Arlington, Annandale, or FC. I realize according to this board that these schools mean my kid will never go to college and wind up a drug addict living in the gutter, but I think we can make it work. We are also seeing houses that are 2K sq feet, so I don't think that is overly small or anything.