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  • Worried - should I be?

    We purchased a home recently and now I can't shake this uneasy feeling!  Is my fear justified, or is this common buyer's remorse that will go away?

    $1.3M price, 20% down, mortgage just over $1M.  1 income family -- base $500K but average is $750K (paid on W2).  Age late 30s, two pre-school kids.  No other debt.

    Started worrying that we took on more than we can handle, especially with growing expenses over time, high property taxes, etc.  I know I sound dumb for asking this after the fact.  I guess I'm looking for reassurance -- anyone remember this feeling when they were in my shoes?

     

  • #2
    Yes, I remember. And the reassurance at the time was that it may seem a lot, but that as young attending we would grow into it over time. Which we did. Do you expect earnings to increase or remain steady?

     
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    • #3
      Your mortgage is less than 1.5X your salary.  You should be fine.  To help the understand your uneasiness we need more of your financial picture.  What is your asset allocation? What are your savings, retirement, and 529's?  To quell the uneasiness it seems to me that you should consider using that income to beef up the savings or pay down some of the mortgage.

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      • #4
        Also depends on what your retirement savings are, what your other expenses are and if you can downsize in 10 years with no  major loss on thsi property.

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        • #5
          I think steady -- many in the group earn more, but I am trying to use the average ($750K) for long term planning.

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          • #6
            Do you live in a HCOL? Meaning, is this the normal range of houses there or did you buy the most expensive for the area? Only you can know the numbers and if this is gonna be "too much". I live in NYC and if we buy a place here, it will def be > 1 mill. At least 1.5 mill I'd say, which would be 3x our gross at this point..

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            • #7
              everyone feels that way after such a big purchase.   you can afford it.

              enjoy it.  don't ruin it for your spouse.  consider this your reassurance.  

              if you were looking at it from the outside, you would probably laugh.  this is a first world problem.  

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              • #8




                We purchased a home recently and now I can’t shake this uneasy feeling!  Is my fear justified, or is this common buyer’s remorse that will go away?

                $1.3M price, 20% down, mortgage just over $1M.  1 income family — base $500K but average is $750K (paid on W2).  Age late 30s, two pre-school kids.  No other debt.

                Started worrying that we took on more than we can handle, especially with growing expenses over time, high property taxes, etc.  I know I sound dumb for asking this after the fact.  I guess I’m looking for reassurance — anyone remember this feeling when they were in my shoes?
                Click to expand...


                I haven't been in your situation and, therefore, can't comment on your feelings. But since the burden of supporting your family rests squarely on your shoulders, you may be going through some justified worries. That doesn't mean you've made a mistake.

                • Do you have plenty of OODI?

                • Do you have several $M worth of term life insurance?

                • Do you have adequate umbrella insurance?

                • Do you have reasonable expectations of job security and continued income at this level?

                • Do you and your spouse do a fairly decent job of sticking to a budget?

                • Strong marriage?


                These all represent manageable threats. If you can answer yes to all, then I think you are simply going through a temporary mental adjustment period. [Of course, I'm making this statement based upon very limited information.]
                Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                • #9
                  That's a very common feeling.

                  Can you afford a 15yr mortgage? It's very reassuring to see your mortgage balance go down every month a significant amount. The difference between your principal on a $1M mortgage going down $1,400/mo vs almost $5,000 is psychologically huge.

                   

                   

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                  • #10
                    eh. if everything else is on point (retirement etc) you're fine.

                    similar scenario bought at $770k and had sticker shock b/c I never figured I'd be in a 3/4M house.

                    but, relatively high COLA area, we love the house, and W2 last year was $685k.

                    when you think about it, both you and I are in better debt:income ration by far than a family who makes $80k and is in a $200k McMansion right?

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                    • #11
                      That's great that you have no debt aside from the new mortgage.

                      As folk have said, good on that income debt ratio. The question is savings current and savings rate into the education and retirement goals.

                      As sound advice above, Protect your downside risk with the proper insurances... disability, term life, umbrella.

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                      • #12
                        Appreciate all the thoughts.

                        Yes it's a HCOL area.

                        Part of the anxiety is probably from being early career. Income won't hit 750K range until next year. Last couple years, 400-500K which felt great when there was no big mortgage. Was able to pay off all loans and get retirement/529s jump started. Have disability, term life, and umbrella set.

                        Obviously the trajectory of retirement saving will change now, which is hitting home only now.

                        Also probably stressed about the initial bolus of expenses after buying the home.

                        "Not ruining it for my spouse" -- so true! She is so happy with the new place. I need to lighten up somehow.

                        Thank you for taking time to share thoughts.

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                        • #13
                          Savings current: 600K between retirement/taxable/529 plans.

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                          • #14
                            You don't need to worry, but that is a lot of debt to take on, so I understand your trepidation.

                            Is it a 15-year fixed? 30-year fixed? What's the rate? If you're not comfortable with that much debt, you can make a plan to put plenty extra towards the principal, which can greatly shorten the time it takes to own the home outright. First, make sure there are no prepayment penalties, of course.

                            Best,

                            -PoF

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                            • #15
                              I am more risk averse than most here, and my comments will reflect my nature. The most debt I ever had was $375k on a $475k house, and I never slept well until I paid it off. The fact that you are questioning the decision to buy the house means that you do have some legit concern, regarding the value, regarding the stability of your income, regarding your growing expenses with a young family, etc. I know no one who suffered from having "too little" house, but I do know quite a few who have struggled due to "too much" house.

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