No house is worth having if you have to be house poor. It only causes fights.

In most major cities, it seems that people sacrifice time (commute) or space (living in a condo, <1500 square foot house, or townhouse, possibly having kids share bedrooms) if they want to live somewhere with low crime and good schools and have a limited budget. At least this is the case in DC, the bay area, New York, and Boston. You can adjust your expectations, or continue to rent. I think there are a lot of advantages to renting that are not "throwing money out," like greater flexibility to move, spending less money on home maintenance, and having your landlord deal with hassles like the plumbing being broken.

8) VA Loan

Our income is about the same as yours, and we have access to a VA loan. Thus, no down payment requirement and lower interest rates. We bought a home for around $400,000 just outside the Beltway.

We are #7. I really have no idea how we'd afford our house any other way.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$156K is a good salary for the region. $375k on that salary is too conservative. Even with a 5% mortgage and 0 down, 30 year fixed on that is $2k a month. Add in 350 for taxes and insurance and you are looking at only 18% debt to income ratio, *FAR* shy of the 28%-33% ratio that most people subscribe to. Using 28% as a ratio, your "affordability" figure jumps to about $580k, which can buy you a nice townhome in Fairfax, or even a single family in some of the older but still nice neighborhoods like Burk.

I am not a Realtor, just someone who has done enough of these types of calculations to know when people are over/under extending themselves.

you're out of your damn mind

Your calculations are confusing me - are you confusing gross and net? Because we make about what OP and spouse do, and after taxes/insurance etc. on our take-home, a mortgage of "only" $2350/month comes pretty damn close to being 33%.

Being conservative is really tough in this area, but it is definitely a positive thing and not one to necessarily advise against.

Not the PP, but the 28-33% recommendations are of gross income, not net.

I guess by your list we were house poor--we bought our house for $475k, with $50k down when our combined income was about $140K. Never had the slightest problem making the mortgage payment and still were putting money in savings each month. We had minimal student debt (scholarships and state schools)and no kids though, and since we were on upward income trajectories we were used to not spending large amounts of money. Interest rates were a lot higher then though--so we were paying more per month than you would be on an equivalent size mortgage now.

Some people would probably also sneer at our house (3 bedrooms, 1360 sq feet, very small yard) and/or our neighborhood (Alexandria City) but we can walk to tons of stuff, only need one car, are metro accessible, and like the local elementary school--so we feel pretty good about it even if others might consider it undesirable.

Anonymous wrote:

Anonymous wrote:I'm confused why you would rent for 8 years when we had a nice market bottom in 2008/2009. Why not buy then?

Now you're trying to buy something at the top of the market again. I'd wait.

Not the OP but they probably were not ready to buy at that time and no one had a crystal ball to tell them the prices were going to go up. We've been searching for a year in a desirable area (great schools, close commute) on a $1 million budget and have been very discouraged. Even at that price point, most homes are a dump or on a busy road. Anything good we saw, we last in bidding wars that escalated $50-100K over list price. We just found a place to rent in that same area for much less than a monthly PITI on a comparable home. In the meantime, we'll continue to save or wait until it feels like we're not making such a major sacrifice/investment on a place that we wouldn't love anyway.

If that is your budget, the problem is your expectations. You can find many homes close in with good schools, but you have to expect that they will be smaller if you are not willing to compromise on location or condition.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here.

I'm confused why you would rent for 8 years when we had a nice market bottom in 2008/2009. Why not buy then?

Yeah, cause I knew it would be a market bottom, right? "Hey, the roulette wheel came up 15. Why didn't you put all your chips on that number before the spin?"

Anon 12:43, thanks for the post. Very informative and enlightening. Maybe that is a viable path, and maybe I need to get more comfortable with the idea of PMI if we're gonna stay around here.

No need to be snarky OP. The news was pretty bleak in 2008, 2009, and the market was pretty bad but good deals could be had back then. If you were steadily employed, not leaving the area, considering a child, just saying that some foresight isn't so unheard of. You waited 8 years, and people are saying the same shit now they were saying in 2004 and 2005: "Oh the prices are going to keep going up up up up up!!!!!!!!!!!!!!!! Squeeee Buy now!!!"

Please. All bullshit. There will be another downturn. Wait it out. And don't miss the next downturn when it comes.

The next downturn will not be anything like what we experienced in 2008. That was a once in a lifetime down turn.

O ha ha ha

Subset of #4 - spend your 20s living with roommates in a low cost of living area. I moved to Chicago at 29 and DC at 33 - I have a down payment saved because for years I payed $350-$750 for my portion of rent and utilities.

Another one for your list -
Buy a brownstone / row house and rent out the garden level.

Anonymous wrote:

Anonymous wrote:OP here.

I'm confused why you would rent for 8 years when we had a nice market bottom in 2008/2009. Why not buy then?

Yeah, cause I knew it would be a market bottom, right? "Hey, the roulette wheel came up 15. Why didn't you put all your chips on that number before the spin?"

Anon 12:43, thanks for the post. Very informative and enlightening. Maybe that is a viable path, and maybe I need to get more comfortable with the idea of PMI if we're gonna stay around here.

No need to be snarky OP. The news was pretty bleak in 2008, 2009, and the market was pretty bad but good deals could be had back then. If you were steadily employed, not leaving the area, considering a child, just saying that some foresight isn't so unheard of. You waited 8 years, and people are saying the same shit now they were saying in 2004 and 2005: "Oh the prices are going to keep going up up up up up!!!!!!!!!!!!!!!! Squeeee Buy now!!!"

Please. All bullshit. There will be another downturn. Wait it out. And don't miss the next downturn when it comes.

The next downturn will not be anything like what we experienced in 2008. That was a once in a lifetime down turn.

9. Live in a townhome. This was our solution. Not what I originally wanted, but at least we have a nice community, plenty of amenities, good schools, and a decent commute on the Red Line.

I am the 3.5% buyer and agree with 12:43. I am just trying to provide a long-term perspective that it's quite possible that you and your spouse may be working for the next 25 years and may be able to buy a little more house than you can afford now but grow into it. FYI, I refinanced out of the FHA after 3.5 years and now have a loan with a 3.375% rate. I lived with a bad backyard and shabby rooms, but budget to "fix" one per year. My point is that sometimes you need to have patience.

We don't care to live in a house. We live in a condo in 20007 with one kid and love it.
We do have plans to upgrade to 2-bedroom finally, but have to save more money to do so.
My sister has a house inside the beltway and we visit her often, but living in a house is just not for us.

for most people it is #7

Anonymous wrote:OP here.

I'm confused why you would rent for 8 years when we had a nice market bottom in 2008/2009. Why not buy then?

Yeah, cause I knew it would be a market bottom, right? "Hey, the roulette wheel came up 15. Why didn't you put all your chips on that number before the spin?"

Anon 12:43, thanks for the post. Very informative and enlightening. Maybe that is a viable path, and maybe I need to get more comfortable with the idea of PMI if we're gonna stay around here.

No need to be snarky OP. The news was pretty bleak in 2008, 2009, and the market was pretty bad but good deals could be had back then. If you were steadily employed, not leaving the area, considering a child, just saying that some foresight isn't so unheard of. You waited 8 years, and people are saying the same shit now they were saying in 2004 and 2005: "Oh the prices are going to keep going up up up up up!!!!!!!!!!!!!!!! Squeeee Buy now!!!"

Please. All bullshit. There will be another downturn. Wait it out. And don't miss the next downturn when it comes.

OP here.

I'm confused why you would rent for 8 years when we had a nice market bottom in 2008/2009. Why not buy then?

Yeah, cause I knew it would be a market bottom, right? "Hey, the roulette wheel came up 15. Why didn't you put all your chips on that number before the spin?"

Anon 12:43, thanks for the post. Very informative and enlightening. Maybe that is a viable path, and maybe I need to get more comfortable with the idea of PMI if we're gonna stay around here.