Need a sanity check. Here's the rundown - it's not ideal, but hopefully it's not completely crazy. Breaking the 2x rule to about 3x or so.
W2: 460k yearly
Cash: 450k
Taxable Brokerage: 160k (hoping to not use this)
Retirement Accounts: 370k (def. not touching these)
Expenses: approx. $9k/month (excluding rent)
Background:
*Married 4 years, both mid-30s (spouse stays home)
*1yo child - starting to need space. Procrastinated on buying a home earlier because wanted to save cash, the market was "not very good" etc etc. smh...
*Attending for the last 3 years
*med school loans paid off
*HCOL city - both sets of grandparents nearby.
*neighborhood, location/commute, and public schools are all excellent.
*All kids will go to public schools
*Renting for $3800/mo for the last 4 years
The Numbers
1.75M - 20% down = 350k + approx. 60k closing = 410k. Could swing slightly more than 20%, maybe 23-24% to keep monthly payment down and still not touch retirement/taxable accounts.
Mortgage: 1.4M
Mortgage Rate/Payment: @4.5% comes out to appprox. $8,300/month (PIMI)
My Calculations:
460k gross - 138k taxes (30%) = 322k.
322k - 96k (1yr mortgage payment) = 226K
226k - 92k (20% savings) = 134K
134k - 108K (living expenses @ 9K/mo) = 26K leftover
How house poor is this going to make me? I've already factored in 20% of gross for savings. An extra 26K leftover means monthly budget can increase about 2K per month if necessary, or be saved. I also get a bonus of approx. 60k per year. I've left it out of these numbers intentionally because it's not always guaranteed but its pretty reliable.
I'd love to save 40-50% and retire early but that's not an option in this area - housing and living expenses are too high. Thankfully I enjoy the day to day of my job. Moving further out would put my commute over 30 minutes. This is a ballpark price for what we've been looking at and want, and is already definitely in the "suburbs."
Just have sticker shock and want to make sure I'm not missing anything major. Between rising interest rates, and housing prices up 10-15% (approx 200k) from the Fall, it seems we have really, somehow, ended up at, just above, or just below our max budget for a house. Not sure which of those 3 it is.....
Help and guidance is much appreciated!!
W2: 460k yearly
Cash: 450k
Taxable Brokerage: 160k (hoping to not use this)
Retirement Accounts: 370k (def. not touching these)
Expenses: approx. $9k/month (excluding rent)
Background:
*Married 4 years, both mid-30s (spouse stays home)
*1yo child - starting to need space. Procrastinated on buying a home earlier because wanted to save cash, the market was "not very good" etc etc. smh...
*Attending for the last 3 years
*med school loans paid off
*HCOL city - both sets of grandparents nearby.
*neighborhood, location/commute, and public schools are all excellent.
*All kids will go to public schools
*Renting for $3800/mo for the last 4 years
The Numbers
1.75M - 20% down = 350k + approx. 60k closing = 410k. Could swing slightly more than 20%, maybe 23-24% to keep monthly payment down and still not touch retirement/taxable accounts.
Mortgage: 1.4M
Mortgage Rate/Payment: @4.5% comes out to appprox. $8,300/month (PIMI)
My Calculations:
460k gross - 138k taxes (30%) = 322k.
322k - 96k (1yr mortgage payment) = 226K
226k - 92k (20% savings) = 134K
134k - 108K (living expenses @ 9K/mo) = 26K leftover
How house poor is this going to make me? I've already factored in 20% of gross for savings. An extra 26K leftover means monthly budget can increase about 2K per month if necessary, or be saved. I also get a bonus of approx. 60k per year. I've left it out of these numbers intentionally because it's not always guaranteed but its pretty reliable.
I'd love to save 40-50% and retire early but that's not an option in this area - housing and living expenses are too high. Thankfully I enjoy the day to day of my job. Moving further out would put my commute over 30 minutes. This is a ballpark price for what we've been looking at and want, and is already definitely in the "suburbs."
Just have sticker shock and want to make sure I'm not missing anything major. Between rising interest rates, and housing prices up 10-15% (approx 200k) from the Fall, it seems we have really, somehow, ended up at, just above, or just below our max budget for a house. Not sure which of those 3 it is.....
Help and guidance is much appreciated!!
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