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  • Buying our first house

    This is my first post. My wife and I (both age 32) are both physicians in the same institution. Combined salary 410K annually. Wife is in her 3rd year, I'm in my 2nd year of the job. Both of us love the job and department we work in. We have been living in same city for past 7 years, and have been renting throughout. Therefore, we know the city well and know where we want to buy (after extensive research). No kids yet but hopefully next 2 years.

    We are confident we want to buy a more "permanent" house (rather than intermediate step for a few years and then move again). We think we will be in our current jobs/city for the next 5-7 years at least and would like a house to stay in for that period.

    We are looking at a house for 780k. We saved the 20% down-payment. Maxed out 401k and HSA. No debt at all.

    Would appreciate the forum's thoughts regarding the pricing of the house. Too expensive? I know it's within the 2x our income range per the WCI, but it's quite close and therefore wanted to check what the forum thought. Thanks.

  • #2
    You have no debt and max out retirement accounts (assuming you also do backdoor roths). You saved a good down payment and can get a conventional mortgage with a good rate. Your mortgage would be ~620k. Your combined salary is 410k. That is a mortgage well within 2x income (you can easily stretch to 3x income). You have done your research and know the ins and outs of the city you live in quite well. You are very likely committed to being there long-term because you seem to be job-stable.

    Assuming you are socially stable with your marriage, I don't think anyone here will tell you not to buy this house. One caveat: If this is truly you're "permanent" or "forever" house, you can consider (and easily afford) a more expensive house - if you so desire.

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    • #3
      You are the poster child for doing things the right way.  I'd say buy the house.  The only caveat would be if one spouse is anticipated to be without an income for an extended time due to the kids that would put you in a crunch.

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      • #4
        A $624k mortgage seems totally doable to me. Have you researched to see what the property taxes on such a house would be? I'd get a fixed 15-year and see what the monthly payment would be. Especially since you still don't have kids, if they're not coming for another 2-3 years, you could throw a lot of extra $$$ at the principal the first year you are in the house, and that would seriously diminish how much you end up paying in interest overall, given that how mortgages work is initially most of your payment goes towards interest.

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        • #5
          Property tax is ~7-8k yearly.

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          • #6
            Go for it.

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            • #7
              There should be a yellow sticky thread pinned to the top of the forum that says, "If you have to ask if you can/should/could buy a house, the answer is no."

              However, in this case, the answer is not no.

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              • #8
                Easily affordable. However, the 5-7 year time frame is a red flag for me. If you're not planning on staying in the house a minimum of seven years (some experts suggest ten years), you should rent instead of buy. Costs of ownership are substantial as are the round trip buy and sell costs.

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                • #9
                  Thanks. To be honest the 5-7 year was ballpark. Both wife and I are very happy with jobs and city we live in. We have no thoughts of moving in the near future unless something unexpected occurs.

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                  • #10
                    you'll be fine with that mortgage and those property taxes. And given you like your jobs and where you live, you might want to consider this house your permanent house. Also, how important is FI to you? Some here aim to be FI in their 40s, others in their 50s. If you like your jobs and lives as much as you say, then perhaps not getting there until you're in your 50s is fine. And this house with those incomes will hardly put you back. But yes-also think about if one of you is going to cut back once a child or two is born. Daycare costs are really high in general (but usually not so much that it makes sense to quit your job, at least based on the incomes of people on this site) but it's a personal choice

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                    • #11
                      You have done things correctly and can certainly afford the home, so if you love it, good luck with the purchase!

                      One word of warning, DW and I are in a similar boat, about the same age, both physicians in the same institution, and we bought a home ~1.5 years ago.  We love the house and don't regret it one bit, but home ownership is a PITA.  Next month a foundation company is coming out to fix a wall that is sinking into the floorboards and causing cracks in the door frames.  So that's awesome.....  $6k into the local economy I guess.

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                      • #12
                        Why not get a doctor's loan and put the 20% you saved up into an ETF? Over 30 years you would earn more money from the ETF than you lost by have a higher mortgage interest rate.

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                        • #13




                          There should be a yellow sticky thread pinned to the top of the forum that says, “If you have to ask if you can/should/could buy a house, the answer is no.”

                          However, in this case, the answer is not no.
                          Click to expand...


                          Yeah I do wonder a little bit about some of these home buying threads. Seems like the answers are pretty predictable.

                           

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                          • #14
                            Make sure it is in a school district you would want to send your kids to.

                             

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                            • #15




                              Thanks. To be honest the 5-7 year was ballpark. Both wife and I are very happy with jobs and city we live in. We have no thoughts of moving in the near future unless something unexpected occurs.
                              Click to expand...






                              Make sure it is in a school district you would want to send your kids to.
                              Click to expand...


                              Yeah, will the kids like the house? (aka, will they like the schools, neighborhood, soccer leagues, parks, street to ride a bicycle, other kids nearby, yards for the dog to sniff)?

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