Anonymous
03/03/2012 14:06
Subject: Pls come in if your HHI is 350-400K
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:
For the love of God. I personally never said what I "should" spend. I said I was told that people with my HHI "should" spend more on housing. I personally don't believe that or believe I should spend anything. I was just curious - as an informal poll of sorts - what people who make this range spend on housing. For the love of God, I am not running out today and buying a house based on what people on DCUM spend on their houses. And no I am not new to this range. We have been in this range for about 4-5 years. I don't even think we are that wealthy. I was giving it for comparison purposes. SHEESH.
OP, I completely understand what you are saying, we are in the same income range and we have been told by lots of other people (in-laws, uncles, colleagues, friends, bankers, and realtors). They say that we need to spend quite a bit for tax purposes. Now, I'm not business nor finances savvy so I don't really know what these exact purposes are beyond tax breaks and how much savings actually occur with those tax breaks.
We have been renting for our entire marriage due to multiple moves, but we are now ready to settle down and this is what we are constantly hearing.
They may be telling you that b/c you can deduct mortgage interest -- on a large mortgage, that can be a signficant tax deduction (multiples of tens of thousands). But, there are also significant home maintenance costs that come along w/ home ownership -- and none of those associated with renting.
I recall reading in the NYT or WSJ several years ago a detailed article/study on whether it is more cost effective to own or rent. I think the conculsion was that ultimately, generally (large generalization), over time renting is financially advantageous.
Thank you, this is what I remember being told but if does that mean it's not wise to put down a large downpayment, thus making our mortgage less? I'm having a hard time figuring out if the tax savings on the interest is enough to weigh out the decision of a smaller mortgage.
It can still be worth it. For instance, on our prior mortgage -- which was only about $350,000 -- I was able to deduct $33,000 in mortgage interest last year. Because so much of a monthly mortgage payment goes to interest (rather than principal paydown) in the first 10-15 years of a 30 year mortgage. That deduction drastically reduced my taxable income. That being said, we also put $30K+ of improvements into our house last year (new boiler, redid a bathroom, plus standard home repairs and maintenance). Those improvements increased the value of our home, granted, but we definitely won't get dollar-for-dollar back on them when we sell, just a % of dollars spent. They were significant costs you would never have renting. It's not a simple analysis. If I were you, I'd talk through it with a financial planner.
Thanks you, this gives me a better understanding.
Anonymous
03/03/2012 12:21
Subject: Pls come in if your HHI is 350-400K
OP, have you considered a 15 year mortgage? Don't know your kids ages, but it would be nice to be mortgage free during the college years.
Anonymous
03/03/2012 07:29
Subject: Pls come in if your HHI is 350-400K
OP:
HHI just hit 350 this year
House price = 650 K (HHI was 200+ when purchased)
mortgage is now 350k so payment is very low.
Mint, last night, reported our net worth 1M and some change last night!!! I'm a paper millionaire (or half as that is a couple account). Anyway, thought I'd share.
Re; What you are supposed to spend, when we were shopping houses, we were told to spend much more than we were interested in spending. I sort of wish our house didn't need renovations but only b/c i'm lazy about that story of thing. If we spent about 100K more, we could have had that. Looking back, it would have been worth it.
HHI just hit 350 this year
House price = 650 K (HHI was 200+ when purchased)
mortgage is now 350k so payment is very low.
Mint, last night, reported our net worth 1M and some change last night!!! I'm a paper millionaire (or half as that is a couple account). Anyway, thought I'd share.
Re; What you are supposed to spend, when we were shopping houses, we were told to spend much more than we were interested in spending. I sort of wish our house didn't need renovations but only b/c i'm lazy about that story of thing. If we spent about 100K more, we could have had that. Looking back, it would have been worth it.
Anonymous
03/02/2012 22:17
Subject: Pls come in if your HHI is 350-400K
HHI = 350k (but was around 450k when we bought)
House price = $1.25m
Mortgage = $700k
We also have a house we rent out that pays for about 90% of the mortgage on that house. We can probably get more in rent for it, in order to fully cover the mortgage, but we have a perfect tenant so don't want to rock the boat. So we end up about $200 out of pocket each month on that house.
House price = $1.25m
Mortgage = $700k
We also have a house we rent out that pays for about 90% of the mortgage on that house. We can probably get more in rent for it, in order to fully cover the mortgage, but we have a perfect tenant so don't want to rock the boat. So we end up about $200 out of pocket each month on that house.
Anonymous
03/02/2012 14:51
Subject: Pls come in if your HHI is 350-400K
Anonymous wrote:Anonymous wrote:Anonymous wrote:Also factor for the fact that it's the most frugal on DCUM that generally respond to this kind of question...at your income level, you are correct, plenty of folks w/ homes north of $1M.
I think the 1/3 of take-home for PITI rule gives you a reasonable ceiling and a lot of space...you could really go up to $1.5-2M home if you have the 20%+ down if you wanted.
OP here. This is helpful. Thanks.
Of course it is. You are financially irresponsible and status conscious, so you want fodder to justify what is sure to be a poor decision.
You, my friend, are an idiot. I have no intention in buying a 1M home because of other expenses (student loans, childcare). So please GTFO.
Anonymous
03/02/2012 14:24
Subject: Pls come in if your HHI is 350-400K
Anonymous wrote:Anonymous wrote:Also factor for the fact that it's the most frugal on DCUM that generally respond to this kind of question...at your income level, you are correct, plenty of folks w/ homes north of $1M.
I think the 1/3 of take-home for PITI rule gives you a reasonable ceiling and a lot of space...you could really go up to $1.5-2M home if you have the 20%+ down if you wanted.
OP here. This is helpful. Thanks.
Of course it is. You are financially irresponsible and status conscious, so you want fodder to justify what is sure to be a poor decision.
Anonymous
03/02/2012 14:12
Subject: Pls come in if your HHI is 350-400K
Anonymous wrote:Anonymous wrote:Also factor for the fact that it's the most frugal on DCUM that generally respond to this kind of question...at your income level, you are correct, plenty of folks w/ homes north of $1M.
I think the 1/3 of take-home for PITI rule gives you a reasonable ceiling and a lot of space...you could really go up to $1.5-2M home if you have the 20%+ down if you wanted.
I disagree. If you have a nanny and/or private school tuition, you'll be squeezed if you spend 33% on PITI.
^^^this. We currently pay 1/4 of our take-home on PITI. But we have a nanny and private preschool tuition--we aren't squeezed, but we don't have a ton of extra cash floating around after retirement savings, etc. We are going up to just below 1/3 of take-home on our next mortgage, but we are also losing the nanny, and ending up at the same break-even as now.
Anonymous
03/02/2012 14:08
Subject: Pls come in if your HHI is 350-400K
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:
For the love of God. I personally never said what I "should" spend. I said I was told that people with my HHI "should" spend more on housing. I personally don't believe that or believe I should spend anything. I was just curious - as an informal poll of sorts - what people who make this range spend on housing. For the love of God, I am not running out today and buying a house based on what people on DCUM spend on their houses. And no I am not new to this range. We have been in this range for about 4-5 years. I don't even think we are that wealthy. I was giving it for comparison purposes. SHEESH.
OP, I completely understand what you are saying, we are in the same income range and we have been told by lots of other people (in-laws, uncles, colleagues, friends, bankers, and realtors). They say that we need to spend quite a bit for tax purposes. Now, I'm not business nor finances savvy so I don't really know what these exact purposes are beyond tax breaks and how much savings actually occur with those tax breaks.
We have been renting for our entire marriage due to multiple moves, but we are now ready to settle down and this is what we are constantly hearing.
They may be telling you that b/c you can deduct mortgage interest -- on a large mortgage, that can be a signficant tax deduction (multiples of tens of thousands). But, there are also significant home maintenance costs that come along w/ home ownership -- and none of those associated with renting.
I recall reading in the NYT or WSJ several years ago a detailed article/study on whether it is more cost effective to own or rent. I think the conculsion was that ultimately, generally (large generalization), over time renting is financially advantageous.
Thank you, this is what I remember being told but if does that mean it's not wise to put down a large downpayment, thus making our mortgage less? I'm having a hard time figuring out if the tax savings on the interest is enough to weigh out the decision of a smaller mortgage.
It can still be worth it. For instance, on our prior mortgage -- which was only about $350,000 -- I was able to deduct $33,000 in mortgage interest last year. Because so much of a monthly mortgage payment goes to interest (rather than principal paydown) in the first 10-15 years of a 30 year mortgage. That deduction drastically reduced my taxable income. That being said, we also put $30K+ of improvements into our house last year (new boiler, redid a bathroom, plus standard home repairs and maintenance). Those improvements increased the value of our home, granted, but we definitely won't get dollar-for-dollar back on them when we sell, just a % of dollars spent. They were significant costs you would never have renting. It's not a simple analysis. If I were you, I'd talk through it with a financial planner.
Anonymous
03/02/2012 09:54
Subject: Pls come in if your HHI is 350-400K
Anonymous wrote:Also factor for the fact that it's the most frugal on DCUM that generally respond to this kind of question...at your income level, you are correct, plenty of folks w/ homes north of $1M.
I think the 1/3 of take-home for PITI rule gives you a reasonable ceiling and a lot of space...you could really go up to $1.5-2M home if you have the 20%+ down if you wanted.
I disagree. If you have a nanny and/or private school tuition, you'll be squeezed if you spend 33% on PITI.
Anonymous
03/02/2012 09:50
Subject: Pls come in if your HHI is 350-400K
Anonymous wrote:Anonymous wrote:Anonymous wrote:
For the love of God. I personally never said what I "should" spend. I said I was told that people with my HHI "should" spend more on housing. I personally don't believe that or believe I should spend anything. I was just curious - as an informal poll of sorts - what people who make this range spend on housing. For the love of God, I am not running out today and buying a house based on what people on DCUM spend on their houses. And no I am not new to this range. We have been in this range for about 4-5 years. I don't even think we are that wealthy. I was giving it for comparison purposes. SHEESH.
OP, I completely understand what you are saying, we are in the same income range and we have been told by lots of other people (in-laws, uncles, colleagues, friends, bankers, and realtors). They say that we need to spend quite a bit for tax purposes. Now, I'm not business nor finances savvy so I don't really know what these exact purposes are beyond tax breaks and how much savings actually occur with those tax breaks.
We have been renting for our entire marriage due to multiple moves, but we are now ready to settle down and this is what we are constantly hearing.
They may be telling you that b/c you can deduct mortgage interest -- on a large mortgage, that can be a signficant tax deduction (multiples of tens of thousands). But, there are also significant home maintenance costs that come along w/ home ownership -- and none of those associated with renting.
I recall reading in the NYT or WSJ several years ago a detailed article/study on whether it is more cost effective to own or rent. I think the conculsion was that ultimately, generally (large generalization), over time renting is financially advantageous.
Thank you, this is what I remember being told but if does that mean it's not wise to put down a large downpayment, thus making our mortgage less? I'm having a hard time figuring out if the tax savings on the interest is enough to weigh out the decision of a smaller mortgage.