Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have a $1.2M mortgage and around $250k HHI (2 kids no private)

Are you maxing out your kids’ 529s and your 401ks each month?

529s are almost fully funded (don't want to overfund). For 401K, maxing to match level. Don't want too much in those due to restrictions. I'm not saying it's even with the $1.2M but it's manageable.

That's about the dumbest thing I've ever heard. You need a remedial course in money management.

It's called planning. I've made assumptions that say I want to fund to 80% of future cost of 4 year private plus grad school (adjusting for things like partial scholarship, in-state school, doesn't go to grad school, etc). Well, if I grossly overfund, I can either:
* Give money to potential grandkids or relatives
* Withdraw it with penalty

So I effectively lose use of the funds if I overfund. For 401k, earliest penalty free withdrawl is 59 1/2. I'm retiring at 53 so 6 1/2 years where I can't use those funds. So I need funds NOT in a retirement account to retire. Sure, get max matching to get 100% return the first year, but don't over fund. If you just max 401K to live large in retirement and don't retire early, there's nothing wrong with that but neither is there something wrong with planning to have funds before 59 1/2.

You have probably already decided one way or the other, OP, but we make 245k/year with a 490k (20 year) mortgage, and we don’t have a lot to spare. No other debt. After maxing 401ks and paying taxes and health insurance, our paychecks total a little over 10k/month. We have a $3100 PITI. I am pretty sure we could swing a 950k mortgage if our lives depended on it, but it would mean cutting everything else to the quick. Now, we don’t live in luxury but we’re happy and comfortable.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have a $1.2M mortgage and around $250k HHI (2 kids no private)

Are you maxing out your kids’ 529s and your 401ks each month?

529s are almost fully funded (don't want to overfund). For 401K, maxing to match level. Don't want too much in those due to restrictions. I'm not saying it's even with the $1.2M but it's manageable.

That's about the dumbest thing I've ever heard. You need a remedial course in money management.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:double fed

one child in public school, no more kids.

zero debt except for 500 dollar car loan


I know at first glance, this seems crazy, but when i run the monthly budget, it seems pretty doable.

4750 dollar PITI (mortgage payment, prop tax, homeowners insurance)
20,833 gross monthly income

Back end DTI ends up being roughly 25 percent . 45 percent back end DTI is max that people can get approved for on a conventional loan.




is this reasonable to get the house that i really want?

I don’t know, OP. Our mortgage is about that, but HHI is $800k and we still feel it.

+1 Our mortgage is just under $3k on $500k, and I wouldn't do this. Plus DH is a fed and the first paycheck of this year shows that the 3.1% raise translated to four (4) additional US dollars per pay period, which tells me that our health insurance went up quite a bit. And property taxes go up another $100/month every year so far. As dual feds you have stability, but you're also not going to get any pay bumps or bonuses to smooth your way if something comes up and your tight budget takes a hit.

Slightly off topic but the raise probably isn’t reflected yet since the most recent pay checks would be for work performed in December.

Anonymous wrote:

Anonymous wrote:double fed

one child in public school, no more kids.

zero debt except for 500 dollar car loan


I know at first glance, this seems crazy, but when i run the monthly budget, it seems pretty doable.

4750 dollar PITI (mortgage payment, prop tax, homeowners insurance)
20,833 gross monthly income

Back end DTI ends up being roughly 25 percent . 45 percent back end DTI is max that people can get approved for on a conventional loan.




is this reasonable to get the house that i really want?

I don’t know, OP. Our mortgage is about that, but HHI is $800k and we still feel it.

If a $900K mortgage on an $800,000 annual income causes you stress, then you have an anxiety disorder and should be posting in the health forum, not the money forum.

Anonymous wrote:

Anonymous wrote:double fed

one child in public school, no more kids.

zero debt except for 500 dollar car loan


I know at first glance, this seems crazy, but when i run the monthly budget, it seems pretty doable.

4750 dollar PITI (mortgage payment, prop tax, homeowners insurance)
20,833 gross monthly income

Back end DTI ends up being roughly 25 percent . 45 percent back end DTI is max that people can get approved for on a conventional loan.




is this reasonable to get the house that i really want?

I don’t know, OP. Our mortgage is about that, but HHI is $800k and we still feel it.

How? How can maybe $5,000/month mortgage be in any way tight to someone making 800k per year? Even assuming 50% of your income goes to taxes/savings, you’re still bringing home 400k in cash. That is well over 300k left to spend AFTER your mortgage and home maintenance (budgeting generously). What exactly could you possibly be blowing $25,000/month on? I mean, I’m sure I could come up with some things if I had to spend that. But there’s no way the mortgage would even be noticeable with that much spending money leftover. Are you horrible with money management? Or do you think things like 50k/year private school, 15k vacations, 24/7 household staff are necessities that others also have in their budget? I honestly don’t understand how someone with your income could “feel” a 900k mortgage (that is barely the amount of 1 years’ salary when many normal Americans have a mortgage worth double their annual salary and live just fine).

Anonymous wrote:

Anonymous wrote:We have a $1.2M mortgage and around $250k HHI (2 kids no private)

Are you maxing out your kids’ 529s and your 401ks each month?

529s are almost fully funded (don't want to overfund). For 401K, maxing to match level. Don't want too much in those due to restrictions. I'm not saying it's even with the $1.2M but it's manageable.

https://www.amazon.com/Your-Money-Ratios-Financial-Security-ebook/dp/B002YJK5O6

Also wanted to say that "Your Money Ratios" sets benchmarks related to your AGE.

I didn't see where you posted that. But, a decision at 30 yrs old may be fine, but not fine at 60 yrs old. It makes a big difference in regard to the amount of time you have to pay off a debt or earn more income. The book gives you percentages for debt, savings, etc. that changes based on your age. (the goal is to be debt free and have a certain amount of retirement savings by the time you are in your 60s). You can get it at your local library for free.

Our HHI is slightly more and our 500K mortgage is 2000K/month. Our DC goes to private school and we do have a lot of disposing income. We take nice vacations, DC does extracurricular activities, we buy quality food. Our grocery bill (including toiletries, pet food and cleaning supplies) is almost $2K.

So unless you are willing to be very frugal, I think it’s a stretch.

What happens if one of you loses a job? Can you make it on one income?

Ooosh. This seems like A LOT of house for a 3 person family.

It's like signing a contract to eat at (insert expensive restaurant name here) EVERY NIGHT. Not just once a month or once a week. You are committing to living at a high expense for years and years.

I really love a book called "Your Money Ratios" by Charles Farrell. Why? Because it helps you look at every financial decision you make in relation to how it affects all other parts of your life and your financial life. Often we look at a car loan or a purchase of shoes or a vacation as an independent choice --- do I have enough to afford this right now?

Farrell's book helps you look at each decision (big decisions) in regard to how they affect your other goals and wants. He helps you quantify how much debt you can handle to still be able to reach LONG TERM goals. If you save X% today, then you will have x% to use for this and y% to use for that... etc.

If you read that and feel comfortable with how this mortgage commitment affects your other wants/needs, then I think you will have peace about going forward. And if you read the book and decide it's too much of a trade off for the house, then you'll also be in a good place. Either way, I think you'll have more peace of mind, and a better sense of the inter-connectedness of your decisions.

Anonymous wrote:

Anonymous wrote:double fed

one child in public school, no more kids.

zero debt except for 500 dollar car loan


I know at first glance, this seems crazy, but when i run the monthly budget, it seems pretty doable.

4750 dollar PITI (mortgage payment, prop tax, homeowners insurance)
20,833 gross monthly income

Back end DTI ends up being roughly 25 percent . 45 percent back end DTI is max that people can get approved for on a conventional loan.




is this reasonable to get the house that i really want?

I don’t know, OP. Our mortgage is about that, but HHI is $800k and we still feel it.

+1 Our mortgage is just under $3k on $500k, and I wouldn't do this. Plus DH is a fed and the first paycheck of this year shows that the 3.1% raise translated to four (4) additional US dollars per pay period, which tells me that our health insurance went up quite a bit. And property taxes go up another $100/month every year so far. As dual feds you have stability, but you're also not going to get any pay bumps or bonuses to smooth your way if something comes up and your tight budget takes a hit.

You need to do the math with your net pay, not gross pay. We make similar to you but 1/2 our pay goes to taxes, 401K and insurance so that our take home is approximately $11,000/mo.

Anonymous wrote:double fed

one child in public school, no more kids.

zero debt except for 500 dollar car loan


I know at first glance, this seems crazy, but when i run the monthly budget, it seems pretty doable.

4750 dollar PITI (mortgage payment, prop tax, homeowners insurance)
20,833 gross monthly income

Back end DTI ends up being roughly 25 percent . 45 percent back end DTI is max that people can get approved for on a conventional loan.




is this reasonable to get the house that i really want?

I don’t know, OP. Our mortgage is about that, but HHI is $800k and we still feel it.

It's fine. Make it your forever home

My husband makes just over 250k and our mortgage is 525k on a 720k home. I couldn’t imagine having 900k mortgage on only 250k income. Since you both work will there be childcare? You are going to feel house poor.