Dream Home maybe a year early...

[hightower]

Normally I would steer people away from the concept of a "dream home" I generally feel that concept is what gets so many people in over their heads when it comes to mortgage debt. In your situation I am less inclined to be so harsh. It sounds like you are happy in your community and have solid employment. You are in a HCOL with high quality of life. And you have an immediate need to leave your apartment. I think it would be ok to go for it. Even though it is a very expensive house, if it ends up being where you stay for the long haul and you'll be truly happy there, then I can see it being ok.

[SwanSong]

So another.... "Am I nuts for wanting to buy this?" thread.

I am blessed to work in a beautiful but rural area that brings in tourists from around the world.  Great for living; not so great for home prices.  I have no real desire to vacation living where we do.  Think skiing, boating, swimming, backpacking, etc....  We have been renting for the past 3-years and paying $2400 per month in rent, which has housed a family of 6 and at times 7 quite well.  My student loans are being taken care of by the NHSC (50k to go), and we have been saving for a home and have close to $100k.  The plan had been to continue renting until we had saved for a downpayment, and at that point, to purchase or buy land to build.  I have been for the hospital for 3-years and feel pretty comfortable where I'm at.  I love my colleagues, there is a shortage of physicians here, and it's a solid culture.  We've been forming roots in the community.

Enter a major problem in the home where we've been renting that has resulted in some likely health issues with my family.  We are currently faced with leaving and trying to find a home in a scarce rental market or buy.  And then up pops a home in our dream location with million dollar mountain views on the lakefront with privacy in a beautiful setting with miles of national forest service land behind it.  There aren't too many homes or plots left on this side of the lake, as it is mostly national forest service land or completely inaccessible during the winter months (i.e., no one is plowing the roads), and most of the other homes on this stretch (fewer than 15) are valued at more than this one.

Problem is that we have about $100k down for what will then be a $800k loan (i.e., 10% down).  Maxing ROTH and 401k.  Annual income is 350k.    That clearly breaks the 2x income for a mortgage, coming in at 2.29x.  The local bank will finance it a 3.375% on a 30-year, so my payments would come out to $3600 per month, or $4100 with property taxes and home owner's.  The interesting thing with my income is that probably 1/3 of my money comes in the form of bonus, so we have pretty much been used to living on about 200k per year and paying down debts or saving the rest.

Am I nuts for wanting to jump on this opportunity/cost, yet also clenching my gut at the same time?  We are thinking about trying a lease-to-purchase agreement where my bonuses rolling in will allow us to get a conventional loan, but who knows with the buyer, who was using this as a vacation home.  The other issue is that my wife is having joint problems that have pretty much taken a skiing and a lot of hiking out of the picture for her.  Swimming and being on the water is the one area where she doesn't feel pain, so I'm more inclined to moving in this direction.