Anonymous
07/06/2015 10:17
Subject: Won the bid on a 900k house and now I feel sick
When you do you budget, don't forget that you will also have to pay a little less than 1K per month in escrow for taxes and home insurance, so you will really be at $5K monthly for home payments.
You can do this, but you will be house poor. You may have to think of ways to control costs (such as getting an au pair). But this is the reality of living in DC/Arlington/Bethesda/Mclean now. And other posters are right - homes are not getting cheaper. Even if homes don't go up in price, homes in this range are getting expanded or torn down for bigger homes.
What you have to worry about now is qualifying for the loan. There are higher qualification requirements for jumbo loans, and you are very much on the limit for income, unless you have a lot of savings (putting down more than 20%). In my opinion, you may have a hard time getting a mortgage for more than $700K, so you will have to bring at least $230K to closing (about 25%).
You can do this, but you will be house poor. You may have to think of ways to control costs (such as getting an au pair). But this is the reality of living in DC/Arlington/Bethesda/Mclean now. And other posters are right - homes are not getting cheaper. Even if homes don't go up in price, homes in this range are getting expanded or torn down for bigger homes.
What you have to worry about now is qualifying for the loan. There are higher qualification requirements for jumbo loans, and you are very much on the limit for income, unless you have a lot of savings (putting down more than 20%). In my opinion, you may have a hard time getting a mortgage for more than $700K, so you will have to bring at least $230K to closing (about 25%).
Anonymous
07/06/2015 10:08
Subject: Re:Won the bid on a 900k house and now I feel sick
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Yeah,it might be tough sledding for a bit, but that 900000 will soon be 1.7 million. This is Arlington, and prices are never going down again. So you made a reasonable move.
this was my thinking. buy now before you get priced out. for those who think prices won't go higher, look at silicon valley where homes were $1 mil in 2000 and are now $2.5 mil
DC ain't silicon valley.
But the close in suburbs are. Or similar to the rich Chicago suburbs. This now is what it is and it's not turning back. The 2 million bridge will soon be crossed.
Nope. Silicon Valley has a very unique population because of all of the instant millionaires around there and the terrible traffic/limited real estate accessible to Palo Alto/Menlo Park. It drives up the real estate like no other area in the country. We might have the traffic issues, but there is a lot more land here and very few of the instant millionaires.
Wrong. The traffic is terrible here too, so the close in suburbs such as Arlington have become popular (perhaps irrationally so, to some extent). The point is that it is going to be a locked in rich person's area.
Anonymous
07/06/2015 10:07
Subject: Re:Won the bid on a 900k house and now I feel sick
I think you will be okay if you really like the house. Just do it now. But know you should really take down other spending, buy older used cars and spend less on other stuff.
People here will say it's too high but have crazy high car payments vacations or spending habits.
People here will say it's too high but have crazy high car payments vacations or spending habits.
Anonymous
07/06/2015 10:05
Subject: Won the bid on a 900k house and now I feel sick
You can probably do it, but I think I would personally be uncomfortable.
We have a HHI of about $250k and a mortgage for $540k. (Monthly PITI = a little more than $3,000.) I often wish we had a lower monthly payment. We are very comfortable - max out retirement, two kids in daycare, emergency fund, and we don't feel like we're pinching pennies at all. But I wish we had even more flexibility in our budget. There are a couple of big home improvement projects I'd like to do, but I think we need to wait a couple of years.
We have a HHI of about $250k and a mortgage for $540k. (Monthly PITI = a little more than $3,000.) I often wish we had a lower monthly payment. We are very comfortable - max out retirement, two kids in daycare, emergency fund, and we don't feel like we're pinching pennies at all. But I wish we had even more flexibility in our budget. There are a couple of big home improvement projects I'd like to do, but I think we need to wait a couple of years.
Anonymous
07/06/2015 09:56
Subject: Re:Won the bid on a 900k house and now I feel sick
Anonymous wrote:Anonymous wrote:Yeah,it might be tough sledding for a bit, but that 900000 will soon be 1.7 million. This is Arlington, and prices are never going down again. So you made a reasonable move.
this was my thinking. buy now before you get priced out. for those who think prices won't go higher, look at silicon valley where homes were $1 mil in 2000 and are now $2.5 mil
Seriously, you are justifying the OP take a flyer with their financial future by using a massive tech bubble as your example?
OP I fear you are about to be trampled by Unicorns. What is your backup plan? Savings? Parental help?
Job market is still very shaky
http://www.washingtonpost.com/business/economy/dc-area-job-market-is-perking-up-but-experts-are-only-cautiously-optimistic/2015/06/12/17a11820-1126-11e5-adec-e82f8395c032_story.html
Anonymous
07/06/2015 09:46
Subject: Re:Won the bid on a 900k house and now I feel sick
Anonymous
Don't back out. How much more is your mortgage that what you were paying in rent? What can you cut out?
Our rent is/ was 2500. But, we are busting at the seems. When we looked around to rent a bigger place the rents were 3500-4. :/
We are evaluating what can be cut out of our monthly budget. Luckily, we have been super frugal until now. And, that maybe why I am so nervous.
Are we happy being frugal? It is what it is to survive inside the beltway. Should we have bought an 750-800 house, that is where I am . And, stay there for a few years and then move on.
Don't back out. How much more is your mortgage that what you were paying in rent? What can you cut out?
Our rent is/ was 2500. But, we are busting at the seems. When we looked around to rent a bigger place the rents were 3500-4. :/
We are evaluating what can be cut out of our monthly budget. Luckily, we have been super frugal until now. And, that maybe why I am so nervous.
Are we happy being frugal? It is what it is to survive inside the beltway. Should we have bought an 750-800 house, that is where I am . And, stay there for a few years and then move on.
Anonymous
07/06/2015 09:07
Subject: Won the bid on a 900k house and now I feel sick
Only back out if you think it is a bad investment decision.
I think financially you will be fine, as long as you can be happy living frugally.
We were four in a one bedroom apartment to save for our house, which we bought for $600K on an 80K salary. Your numbers look much better!
Anonymous
07/06/2015 09:04
Subject: Won the bid on a 900k house and now I feel sick
Anonymous wrote:Here's the situation- my husband and I are all cramped up in a two bedroom one bath condo in Arlington with two kids. We have been saving every dime living here. Our goal/dream has been to buy a house in north Arlington. We have been looking and looking recently. My oldest is 4 and ideally we want to be some where in the next year. Unfortunately, all of the homes in north Arlington between 8-850 are okay but some are still kind of small. My husband saw an awesome house for 900 and said I think we can do this. What?? We both do okay---220k combined! But, on paper it does appear we might be able to do this. we put in a bid and won. I do love the house. It's amazing--but now I'm totally freaking out. A mortgage of 4,100 seems huge. We have done budget after budget and it will be tight with childcare. If we back out now we loose the earnest deposit. Do real people do this and make it work? I'm so scared of making a bad financial decision.
I was you in 2011. Now, after accumulating too much credit card debt, we are probably going to put the house on the market and downsize to someplace with a lower cost of living. Being house poor is soul crushing.
Anonymous
07/06/2015 09:04
Subject: Re:Won the bid on a 900k house and now I feel sick
Anonymous wrote:Anonymous wrote:We are buying an 850k on 240k HHI. It's not a stretch at all for us. We are still able to max out retirement. I think the sticker shock is normal but you will get used to it!
this is our income, but we can't do this--are you putting a lot down?. We have not insignificant child care and medical costs (equal to about 3200k/month) so maybe that's the difference, and two car payments (500/month total) but no other loans. We are looking in the 650 range, with 150 down.
We are putting 10% down. We don't have any medical, childcare, car or other costs or debts.
So, your income is higher, the house you bought is cheaper, and you have fewer expenses. Your situation is not the same as OP's.
Anonymous
07/06/2015 09:02
Subject: Re:Won the bid on a 900k house and now I feel sick
Anonymous wrote:We are buying an 850k on 240k HHI. It's not a stretch at all for us. We are still able to max out retirement. I think the sticker shock is normal but you will get used to it!
this is our income, but we can't do this--are you putting a lot down?. We have not insignificant child care and medical costs (equal to about 3200k/month) so maybe that's the difference, and two car payments (500/month total) but no other loans. We are looking in the 650 range, with 150 down.
We are putting 10% down. We don't have any medical, childcare, car or other costs or debts.
Anonymous
07/06/2015 09:00
Subject: Re:Won the bid on a 900k house and now I feel sick
We are buying an 850k on 240k HHI. It's not a stretch at all for us. We are still able to max out retirement. I think the sticker shock is normal but you will get used to it!
this is our income, but we can't do this--are you putting a lot down?. We have not insignificant child care and medical costs (equal to about 3200k/month) so maybe that's the difference, and two car payments (500/month total) but no other loans. We are looking in the 650 range, with 150 down.
Anonymous
07/06/2015 08:55
Subject: Re:Won the bid on a 900k house and now I feel sick
During my working years, we always bought more house than we could comfortably afford because I was confident our income would increase and we did not want to feel that we short-changed ourselves as our income did increase. It meant being frugal for the first couple of years and with the passage of time, the mortgage became easily affordable.
The real issue is whether you can reasonably expect your incomes to increase. If this is likely, then I would not worry about it. Now it may be that on your income you can afford the house anyway - it depends on where you spend your money and to what extent economies are possible if that should be necessary.
The real issue is whether you can reasonably expect your incomes to increase. If this is likely, then I would not worry about it. Now it may be that on your income you can afford the house anyway - it depends on where you spend your money and to what extent economies are possible if that should be necessary.
Anonymous
07/06/2015 08:40
Subject: Won the bid on a 900k house and now I feel sick
Op, you wouldn't know it based on this board but EVERYONE we know who bought a house has stretched to the limit. It's what you have to do to afford a SFH here in a decent school zone. Think of all the positives, be frugal for your first couple years in the home and you will be fine!
Anonymous
07/06/2015 08:40
Subject: Won the bid on a 900k house and now I feel sick
We had our offer accepted on a house that wasn't a stretch for us, and I still felt sick. I think it's such a huge purchase that it's a normal feeling.
Do you have contingencies? Maybe it isn't too late to back out if you're really not feeling it.
What percentage down payment?
Do you have contingencies? Maybe it isn't too late to back out if you're really not feeling it.
What percentage down payment?
Anonymous
07/06/2015 08:33
Subject: Re:Won the bid on a 900k house and now I feel sick
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Yeah,it might be tough sledding for a bit, but that 900000 will soon be 1.7 million. This is Arlington, and prices are never going down again. So you made a reasonable move.
this was my thinking. buy now before you get priced out. for those who think prices won't go higher, look at silicon valley where homes were $1 mil in 2000 and are now $2.5 mil
DC ain't silicon valley.
But the close in suburbs are. Or similar to the rich Chicago suburbs. This now is what it is and it's not turning back. The 2 million bridge will soon be crossed.
Nope. Silicon Valley has a very unique population because of all of the instant millionaires around there and the terrible traffic/limited real estate accessible to Palo Alto/Menlo Park. It drives up the real estate like no other area in the country. We might have the traffic issues, but there is a lot more land here and very few of the instant millionaires.