Anonymous
Post 05/04/2013 07:55     Subject: How much to expect to spend on a new house?
Anonymous wrote:OP, read Elizabeth Warren's book, The Two Income Trap. Then decide how you feel.


She's become an odious self serving cow, but in this case, her point is valid.

We bought with one salary. $900,000 house, $350k mortgage. It's comfortable with 2 incomes and if we ever fell to 1, it wouldn't be awful. I'd hate to be in a situation where you have to both work. Your DH is smart.
Anonymous
Post 05/03/2013 19:37     Subject: Re:How much to expect to spend on a new house?
Anonymous wrote:We did just that. We nearly paid cash for our home, my DH is a wealth manager and has been witness to financial 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.


Your DH must not be a very good wealth manager...
Anonymous
Post 05/03/2013 19:26     Subject: How much to expect to spend on a new house?
Anonymous wrote:
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.


Sorry, I missed the "new". Who demands a "new" house?
It isn't like underwear.
Anonymous
Post 05/03/2013 18:13     Subject: How much to expect to spend on a new house?
Anonymous wrote:
Anonymous wrote:We bought a house last year for 475k, a mortgage we can afford on one salary with the unemployed parent staying home so no daycare costs (right now it's 2k/month for daycare). HHI of 200k (each makes 100k), mortgage payment of $2,400. We have no other debt so we can do that on one salary.



+1 - although if DH were the one to lose his job it would be ugly - he's the big earner and I'm the 'do-gooder'


I don't understand how your mortgage payment with a $475,000 is $2,400. Do you pay PMI too? Is that with home owner's insurance and property taxes? Higher interest rate? Our mortgage is $415,00 ($700,000 purchase price because we put down a lot) is only $1840, and with home owner's insurance and property taxes included, it's around $2,400. Maybe that's what you meant?
Anonymous
Post 05/03/2013 18:07     Subject: How much to expect to spend on a new house?
We just bought a house at $700,000 inside the beltway, great schools. I am a SAHM, so we did buy based only on my husband's salary. I will be going back to work in the next few months, but I still think it is incredibly smarter to do the buying based on one salary thing. That way, when I do get up and running in my career, my salary can go all towards retirement, college savings, etc.
Anonymous
Post 05/03/2013 16:20     Subject: Re:How much to expect to spend on a new house?
This is one of the most important questions you could ask and I have no answer. We did what your DH is suggesting, and we swing back and forth about whether it was the right call. Half the time I hate how small our house is and resent the fact that we can easily afford something that more comfortably fits our family. And the other half I'm deliriously happy that either of us could quit our job at any moment and we'd be fine.

As I said, no real answer.

Anonymous
Post 05/03/2013 14:30     Subject: How much to expect to spend on a new house?
Anonymous wrote:Would love to hear the specific numbers on these mortgage.

Not OP, but DH and I are facing the exact same issue. Although in our case, I am the more conservative one.

We have a HHI of $150k and will have about $100k cash from sale of our current place.

What mortgage range would be reasonable for us?


$500k - although really, you need to do a thorough budget to figure this out. If you don't have kids, and don't plan to, that makes a big difference. I'm the PP at $165k that bought on one salary. I did a very generous budget to come up with my number. Sure, we could have gone up to $4k/mo, but sticking at $2500 or less was my goal because I want nice vacations, a cleaning service, and money for college. We also put down enough to be under the $417k cap to get the best interest rate.
Anonymous
Post 05/03/2013 13:05     Subject: How much to expect to spend on a new house?
Anonymous wrote:We bought a house last year for 475k, a mortgage we can afford on one salary with the unemployed parent staying home so no daycare costs (right now it's 2k/month for daycare). HHI of 200k (each makes 100k), mortgage payment of $2,400. We have no other debt so we can do that on one salary.



+1 - although if DH were the one to lose his job it would be ugly - he's the big earner and I'm the 'do-gooder'
Anonymous
Post 05/03/2013 12:53     Subject: How much to expect to spend on a new house?
I think some folks are fixating on the word "new" in the subject line when I'm pretty sure the OP meant it in the context of "our next house."

You can buy a house in a decent area for $600K, but you'd make compromises in terms of SF, what you'd have to fix, access to Metro or a busier street.
Anonymous
Post 05/03/2013 12:36     Subject: How much to expect to spend on a new house?
Anonymous wrote:
Anonymous wrote:
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).


And ours was a fixer upper. The house down the street had one open house, 5 offers and sold for $850k. 1.2M is a lot for any VA area.


Thats not new


I don't think anyone says, "Hey everyone, we just bought a used house!"
Anonymous
Post 05/03/2013 12:32     Subject: How much to expect to spend on a new house?
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 how we're approaching it too. We both make around the same salary right now, but my spouse's job is the more "stable" of the two. Mine is a more year-to-year contract position. We're trying to stay within the range that would give us flexibility and could absorb an income loss if one of had to switch and ended up in a lower paying job. It’s a bit limiting but at the end of the day I think we’ll both be glad we played more on the conservative side.
Anonymous
Post 05/03/2013 12:20     Subject: How much to expect to spend on a new house?
We bought a house last year for 475k, a mortgage we can afford on one salary with the unemployed parent staying home so no daycare costs (right now it's 2k/month for daycare). HHI of 200k (each makes 100k), mortgage payment of $2,400. We have no other debt so we can do that on one salary.

Anonymous
Post 05/03/2013 12:06     Subject: How much to expect to spend on a new house?
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.


Whoops! You are right. Sorry I have a billion different numbers running through my head lately. Thank you for correcting me.
Anonymous
Post 05/03/2013 11:56     Subject: How much to expect to spend on a new house?
Anonymous wrote:
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).


And ours was a fixer upper. The house down the street had one open house, 5 offers and sold for $850k. 1.2M is a lot for any VA area.


Thats not new
Anonymous
Post 05/03/2013 11:20     Subject: How much to expect to spend on a new house?
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).


And ours was a fixer upper. The house down the street had one open house, 5 offers and sold for $850k. 1.2M is a lot for any VA area.