Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We're hoping to stay WOTP where there is not nearly as much room for appreciation as gentrifying neighborhoods.

With your relatively low income for your debt and desired place to live I'd just accept renting forever.

?? They owe $90K on $270K income. They could literally pay it off this year and live on income that is still more than twice the average HHI in DC.

OP, I wouldn't worry about the debt given that it's at a low interest rate, but I would aggressively save for a downpayment. When you can do 20%, see what that gets you.

Lol! They are saving 2400/mo. Where is the rest going to come from? The money tree?

The same place it comes from for everyone else who saves up for a downpayment. The idea that you should be able to save for a downpayment in a couple of months is kind of insane unless you are extremely wealthy. If OP wants a $1M house, she needs $200K saved. At current rate of savings, that's 6.5 years (assuming they have nothing saved yet). Many people save for far longer than that to afford a downpayment. If OP wants to buy before then, she can either escalate the saving (which she should be able to do on $270K even with daycare, though it may mean cutting back on other things they enjoy) or look at less expensive homes. That's how this works. She could also do 10% down, but you typically pay for that in the interest rate, so it's not necessarily a win.

Especially if the bump in HHI is recent, take everything over what you previously earned and put it in the downpayment fund, rather than using it for upping quality of life. You won't miss it the way that you would if you'd gotten used to including it in your spending and had to cut back.

You stated they could pay a 90k loan down in a year. Keep on topic.

On $270K, of course you could, if that were your priority. Even if you assume 40% going to taxes, that's $13,500 a month. Set aside $7,500/month to pay off that debt and that leaves you $5,500--more or less the median household income in DC, after taxes, so clearly it is possible if someone told you you *had* to pay the debt off within the year, even if it would mean not living in your neighborhood or apartment size of choice or using your daycare of choice or eating out or what-have-you. People certainly do make it work at that income by making different choices with their finances.

Does that mean OP *should* do this? No, of course not--presumably they are saving less than that because they have prioritized other things in their budget (like retirement and college savings, neighborhood, preschool, etc.) The point is just that debt is not inherently evil and $90K is a very reasonable amount of student loan debt to have on an income of $270K, and certainly not a level of debt that would preclude buying a home. (Now, $90K in high-interest credit card debt because of problems managing spending--that would be another story.)

900K house appreciating in value over 5 years at 1.5% = 969K. The only way to offset this is the fixer upper route or move out of District.

You mentioned contributing to a 529 how much would you like to have for the kids college? It takes a chunk to get to a full college pay off but you do have years to build it up.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP I would buy now with these rates. I would assume your 800-900K starter home is in DC.. adjust where your looking 500K still gets a decent home in the burbs.... 3.5% down payment first time buyer too. Waiting to plow away 170K could take years meanwhile rates are low and you could already own. Ok PMI may cost you 3K per year but as it stands now you'd more than make that up with tax deducted interest where you have no tax ded now ( PMI is not tax deductible but the interest is)

OP here - I get all of that but at this stage in our life, with a one year old and hopefully another one soon, we are not willing to give up our short commutes.

800/900k home, your income, jobs with no real growth, 2 small kids...buy a house that expensive and you will be giving up financial security and your kids crack at a parent funded college education...not making their lives any better than yours.

Our lives are actually very wonderful and I hope our kids will say the same, but thanks.

Anonymous wrote:I'd really wonder what specific neighborhoods you're looking at in DC.

Really anywhere that feeds Deal or Hardy and Wilson.

Anonymous wrote:Are you planning to send the kids to public schools?

Yes.

Are you planning to send the kids to public schools?

I'd really wonder what specific neighborhoods you're looking at in DC.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We're hoping to stay WOTP where there is not nearly as much room for appreciation as gentrifying neighborhoods.

With your relatively low income for your debt and desired place to live I'd just accept renting forever.

?? They owe $90K on $270K income. They could literally pay it off this year and live on income that is still more than twice the average HHI in DC.

OP, I wouldn't worry about the debt given that it's at a low interest rate, but I would aggressively save for a downpayment. When you can do 20%, see what that gets you.

Lol! They are saving 2400/mo. Where is the rest going to come from? The money tree?

The same place it comes from for everyone else who saves up for a downpayment. The idea that you should be able to save for a downpayment in a couple of months is kind of insane unless you are extremely wealthy. If OP wants a $1M house, she needs $200K saved. At current rate of savings, that's 6.5 years (assuming they have nothing saved yet). Many people save for far longer than that to afford a downpayment. If OP wants to buy before then, she can either escalate the saving (which she should be able to do on $270K even with daycare, though it may mean cutting back on other things they enjoy) or look at less expensive homes. That's how this works. She could also do 10% down, but you typically pay for that in the interest rate, so it's not necessarily a win.

Especially if the bump in HHI is recent, take everything over what you previously earned and put it in the downpayment fund, rather than using it for upping quality of life. You won't miss it the way that you would if you'd gotten used to including it in your spending and had to cut back.

You stated they could pay a 90k loan down in a year. Keep on topic.

Anonymous wrote:

Anonymous wrote:OP I would buy now with these rates. I would assume your 800-900K starter home is in DC.. adjust where your looking 500K still gets a decent home in the burbs.... 3.5% down payment first time buyer too. Waiting to plow away 170K could take years meanwhile rates are low and you could already own. Ok PMI may cost you 3K per year but as it stands now you'd more than make that up with tax deducted interest where you have no tax ded now ( PMI is not tax deductible but the interest is)

OP here - I get all of that but at this stage in our life, with a one year old and hopefully another one soon, we are not willing to give up our short commutes.

800/900k home, your income, jobs with no real growth, 2 small kids...buy a house that expensive and you will be giving up financial security and your kids crack at a parent funded college education...not making their lives any better than yours.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP I would buy now with these rates. I would assume your 800-900K starter home is in DC.. adjust where your looking 500K still gets a decent home in the burbs.... 3.5% down payment first time buyer too. Waiting to plow away 170K could take years meanwhile rates are low and you could already own. Ok PMI may cost you 3K per year but as it stands now you'd more than make that up with tax deducted interest where you have no tax ded now ( PMI is not tax deductible but the interest is)

OP here - I get all of that but at this stage in our life, with a one year old and hopefully another one soon, we are not willing to give up our short commutes.

Another kid, commute, or get a higher paying job. Pick your poison.

Or the 4th option that we're currently taking, continue to rent We want to stay in the city for the early kid years no matter what. Once he (or they) are a little older, if we're still not in a position to buy in a school boundary we're happy with, we will definitely move out of the city - plenty of great options. But if we could make it work where we currently live, we'll try.

Anonymous wrote:

Anonymous wrote:OP I would buy now with these rates. I would assume your 800-900K starter home is in DC.. adjust where your looking 500K still gets a decent home in the burbs.... 3.5% down payment first time buyer too. Waiting to plow away 170K could take years meanwhile rates are low and you could already own. Ok PMI may cost you 3K per year but as it stands now you'd more than make that up with tax deducted interest where you have no tax ded now ( PMI is not tax deductible but the interest is)

OP here - I get all of that but at this stage in our life, with a one year old and hopefully another one soon, we are not willing to give up our short commutes.

Another kid, commute, or get a higher paying job. Pick your poison.

Anonymous wrote:OP I would buy now with these rates. I would assume your 800-900K starter home is in DC.. adjust where your looking 500K still gets a decent home in the burbs.... 3.5% down payment first time buyer too. Waiting to plow away 170K could take years meanwhile rates are low and you could already own. Ok PMI may cost you 3K per year but as it stands now you'd more than make that up with tax deducted interest where you have no tax ded now ( PMI is not tax deductible but the interest is)

OP here - I get all of that but at this stage in our life, with a one year old and hopefully another one soon, we are not willing to give up our short commutes.

^^ and even if you work in DC many of us here in the burbs take a bus or metro and have lived to tell about it

OP I would buy now with these rates. I would assume your 800-900K starter home is in DC.. adjust where your looking 500K still gets a decent home in the burbs.... 3.5% down payment first time buyer too. Waiting to plow away 170K could take years meanwhile rates are low and you could already own. Ok PMI may cost you 3K per year but as it stands now you'd more than make that up with tax deducted interest where you have no tax ded now ( PMI is not tax deductible but the interest is)

Buy in McLean Gardens and be done with it. Only put down 10%.

You can achieve this within the next year, IMHO.