Anonymous
02/28/2023 16:00
Subject: HHI $250k what would you spend on mortgage?
Anonymous wrote:Anonymous wrote:Anonymous wrote:I would say around $4k would be fine.
This is the monthly PITI I would be targeting as well.
This is our monthly as well, with slightly less HHI, however savings etc. It's high but has been doable.
Terms like "doable" are really not what you should feel comfortable with when it comes to a mortgage, especially when you have 250k HHI.
Anonymous
02/28/2023 15:52
Subject: HHI $250k what would you spend on mortgage?
My wife and I are mid 20's with ~280K HHI and we're looking at houses in the 850-950 range with 5% down. This puts us near 6k/mo mortgage at the current rates, but we have no kids with no plans anytime soon. Still sufficient for us both to max retirement accounts and save for vacation. We feel the trade-off of no kids allows us to spend more on a nicer house.
Anonymous
02/28/2023 15:38
Subject: HHI $250k what would you spend on mortgage?
Anonymous wrote:If your kid is really gifted that also comes with challenges and expenses beyond the private school tuition. Mine has emotions that she can't manage. Vocabulary and reading comprehension of a high schooler, emotional maturity of a first grader. (She's 9.) We pay $190/session out of pocket for a therapist for her. Plus $170/session for a parent coach for us. We would have a lot more money and life would be easier if she were merely above average intelligence.
Having emotional maturity far below age/grade is not really a factor of high intelligence, but rather that combined with other issues. Most v. high IQ kids have higher than age average emotional maturity, but there still may be a gap between cognitive and emotional capacities. But your larger point of that you're always spinning the dial with how much your kids needs are going to cost you remains true.
Anonymous
02/28/2023 15:29
Subject: HHI $250k what would you spend on mortgage?
If your kid is really gifted that also comes with challenges and expenses beyond the private school tuition. Mine has emotions that she can't manage. Vocabulary and reading comprehension of a high schooler, emotional maturity of a first grader. (She's 9.) We pay $190/session out of pocket for a therapist for her. Plus $170/session for a parent coach for us. We would have a lot more money and life would be easier if she were merely above average intelligence.
Anonymous
02/28/2023 14:52
Subject: Re:HHI $250k what would you spend on mortgage?
Anonymous wrote:Anonymous wrote:Anonymous wrote:i agree this seems high. But, also agree that I have heard that rule. You would maybe feel better with $4,000 which is completely do-able.Anonymous wrote:Anonymous wrote:Anonymous wrote:A good rule of thumbs is 2x to 2.5x of your gross income. You should buy a 500k to 750k house depending on your other expenses and your savings goals.
This “rule of thumb” actually said 3-3.5 times. It was based on 14-16% interest rates from the early to mid 1980s. The old rule of thumb was replaced two decades ago with 28-33% of pretax income.
this is a little absurd.. would mean a 6k mortgage (28 percent) at 260k income.
I've heard this rule too but it only seems to work IRL if you have no other real expenses. Look at the people reaming the OP of the other thread for having a $3500k mortgage on $260k HHI.....although in that case it sounded like they purchased before having kids (one of whom is SN) whereas the OP of this thread is one and done and knows what that kid needs.
Yeah I think this rule only worked back when education was a lot cheaper - now having to plan for that is like having to plan for funding a second mortgage
Yeah exactly. I have no idea how we'd adequately save for college or retirement, or have room for any travel, etc. if we had taken a mortgage at 30% of pretax income. Even with pay raises since that time, it would still be higher than we could comfortably manage, especially with childcare costs.
Anonymous
02/28/2023 14:40
Subject: HHI $250k what would you spend on mortgage?
Anonymous wrote:Anonymous wrote:I would say around $4k would be fine.
This is the monthly PITI I would be targeting as well.
This is our monthly as well, with slightly less HHI, however savings etc. It's high but has been doable.
Anonymous
02/28/2023 14:23
Subject: HHI $250k what would you spend on mortgage?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:I would buy a 1.2 M house and put 20%down
Way too high. We make $275k, plan to send one kid to private, and our $4k payment ($660k mortgage @ 4.25%) is the max we are comfortable with.
+1
OP, stay around $500-600k
This, $1 million is insane.
$500 would be my upper limit, 600 maybe. Remember you have college, retirement and activities to fund.
This will keep the payment manageable but the only think OP can buy at that price is a dump. Even out in the exburbs.
We bought a dump. Better to have a dump and be comfortable than stress over money.
+1
Anonymous
02/28/2023 14:20
Subject: HHI $250k what would you spend on mortgage?
Anonymous wrote:"Gifted"?!? Ha! The kid is 4. IQ is not stabilized until their 12. I agree with finding the best educational support for your kids, but putting labels that you clearly don't understand on them only hurts them in the long run.
IQ stabilizes the most at around 7 (though IQ scores do have variability throughout the lifespan), but shows some reasonable stability at 4. On a full-scale test, a kid with a v. high score at 4 is not likely going to be significantly less at 7, though a kid with a low score at 4 may be significantly higher at 7. OP mentioned that they did testing at the suggestion of a pediatrician and preschool teacher so they may be in an unusual situation with their kid. Besides they mentioned it because it may need to be a planning factor in their finances--good public schools aren't always a good fit for outlier kids.
Back to OP, you seem to not be factoring in the rental income from your apartment into your planning--your HHI from govt jobs is 255k, your rental income adds a conservative 20k, which puts you at 275k, and an asset you could sell if need be. I would put your upper limit purchase price on a house with a 250k downpayment at 1.25 million and the comfortable level at 900k (depending on the mortgage rate you are able to secure).
Anonymous
02/26/2023 18:52
Subject: Re:HHI $250k what would you spend on mortgage?
Anonymous wrote:Anonymous wrote:i agree this seems high. But, also agree that I have heard that rule. You would maybe feel better with $4,000 which is completely do-able.Anonymous wrote:Anonymous wrote:Anonymous wrote:A good rule of thumbs is 2x to 2.5x of your gross income. You should buy a 500k to 750k house depending on your other expenses and your savings goals.
This “rule of thumb” actually said 3-3.5 times. It was based on 14-16% interest rates from the early to mid 1980s. The old rule of thumb was replaced two decades ago with 28-33% of pretax income.
this is a little absurd.. would mean a 6k mortgage (28 percent) at 260k income.
I've heard this rule too but it only seems to work IRL if you have no other real expenses. Look at the people reaming the OP of the other thread for having a $3500k mortgage on $260k HHI.....although in that case it sounded like they purchased before having kids (one of whom is SN) whereas the OP of this thread is one and done and knows what that kid needs.
Yeah I think this rule only worked back when education was a lot cheaper - now having to plan for that is like having to plan for funding a second mortgage
Anonymous
02/26/2023 17:19
Subject: HHI $250k what would you spend on mortgage?
"Gifted"?!? Ha! The kid is 4. IQ is not stabilized until their 12. I agree with finding the best educational support for your kids, but putting labels that you clearly don't understand on them only hurts them in the long run.
Anonymous
02/23/2023 09:30
Subject: HHI $250k what would you spend on mortgage?
Anonymous wrote:Anonymous wrote:Anonymous wrote:I would buy a 1.2 M house and put 20%down
Way too high. We make $275k, plan to send one kid to private, and our $4k payment ($660k mortgage @ 4.25%) is the max we are comfortable with.
I did this 5 years ago and it's been just fine.
Probably interest only so you don’t own your home.
Anonymous
02/22/2023 17:53
Subject: HHI $250k what would you spend on mortgage?
Anonymous wrote:This all really depends on what your life goals are.
1. Do you want to find your kids entire college education? Are you willing to send them to a private or OOS school if that’s the best fit?
2. Do you want to retire before 60?
3. Do you want flexibility to weather a financial storm or a severe illness?
4. Are you OK living on the edge?
5. If you lost your house would you be ok with that, meaning could you mentally handle that?
6. Are you OK being the one in your peer group who is strapped? Or do you prefer to be able to vacation and have experience that cost money?
7. Do you want to have a large and diverse investment portfolio or are you ok with just the 401k and maybe a modest 529?
It’s all individual. Most people couldn’t live like me. I bought my house in cash in 2009 and still live here. I carry no debt whatsoever for personal purchases. We do carry debt for our 3 income generating rental properties. We escape to ski out west any chance we get. College is approaching for us and our kids can go wherever they choose. We will not be working at our current capacity past age 58. It took a lot of sacrifice in our 20s and early 30s, but it has really paid off. Our biggest “mandatory” expense is our real estate tax bill in our primary residence.
I can see what is also appealing about yolo. It’s just dependent on your mindset and goals in life.
What’s your net worth?
Anonymous
02/22/2023 15:00
Subject: HHI $250k what would you spend on mortgage?
This all really depends on what your life goals are.
1. Do you want to find your kids entire college education? Are you willing to send them to a private or OOS school if that’s the best fit?
2. Do you want to retire before 60?
3. Do you want flexibility to weather a financial storm or a severe illness?
4. Are you OK living on the edge?
5. If you lost your house would you be ok with that, meaning could you mentally handle that?
6. Are you OK being the one in your peer group who is strapped? Or do you prefer to be able to vacation and have experience that cost money?
7. Do you want to have a large and diverse investment portfolio or are you ok with just the 401k and maybe a modest 529?
It’s all individual. Most people couldn’t live like me. I bought my house in cash in 2009 and still live here. I carry no debt whatsoever for personal purchases. We do carry debt for our 3 income generating rental properties. We escape to ski out west any chance we get. College is approaching for us and our kids can go wherever they choose. We will not be working at our current capacity past age 58. It took a lot of sacrifice in our 20s and early 30s, but it has really paid off. Our biggest “mandatory” expense is our real estate tax bill in our primary residence.
I can see what is also appealing about yolo. It’s just dependent on your mindset and goals in life.
1. Do you want to find your kids entire college education? Are you willing to send them to a private or OOS school if that’s the best fit?
2. Do you want to retire before 60?
3. Do you want flexibility to weather a financial storm or a severe illness?
4. Are you OK living on the edge?
5. If you lost your house would you be ok with that, meaning could you mentally handle that?
6. Are you OK being the one in your peer group who is strapped? Or do you prefer to be able to vacation and have experience that cost money?
7. Do you want to have a large and diverse investment portfolio or are you ok with just the 401k and maybe a modest 529?
It’s all individual. Most people couldn’t live like me. I bought my house in cash in 2009 and still live here. I carry no debt whatsoever for personal purchases. We do carry debt for our 3 income generating rental properties. We escape to ski out west any chance we get. College is approaching for us and our kids can go wherever they choose. We will not be working at our current capacity past age 58. It took a lot of sacrifice in our 20s and early 30s, but it has really paid off. Our biggest “mandatory” expense is our real estate tax bill in our primary residence.
I can see what is also appealing about yolo. It’s just dependent on your mindset and goals in life.
Anonymous
02/21/2023 16:40
Subject: Re:HHI $250k what would you spend on mortgage?
Depends partly on your age and expected trajectory/income growth, OP.
Anonymous
02/21/2023 15:43
Subject: Re:HHI $250k what would you spend on mortgage?
Anonymous wrote:i agree this seems high. But, also agree that I have heard that rule. You would maybe feel better with $4,000 which is completely do-able.Anonymous wrote:Anonymous wrote:Anonymous wrote:A good rule of thumbs is 2x to 2.5x of your gross income. You should buy a 500k to 750k house depending on your other expenses and your savings goals.
This “rule of thumb” actually said 3-3.5 times. It was based on 14-16% interest rates from the early to mid 1980s. The old rule of thumb was replaced two decades ago with 28-33% of pretax income.
this is a little absurd.. would mean a 6k mortgage (28 percent) at 260k income.
I've heard this rule too but it only seems to work IRL if you have no other real expenses. Look at the people reaming the OP of the other thread for having a $3500k mortgage on $260k HHI.....although in that case it sounded like they purchased before having kids (one of whom is SN) whereas the OP of this thread is one and done and knows what that kid needs.