Check my mortgage payment budgeting please!

[Tim]

yep. Don’t know what market you’re in, but the market here is so hot (and has been since well before the pandemic), that if we rent for a few more years until I make partner, we could potentially be priced out of our preferred neighborhood altogether. So I feel like I need to buy something now to ride the wave and set us up for the partner home down the line.

This discussion has been helpful and grounded some of my initial inclinations.

FOMO is a dangerous basis for a financial decision. Market timing of stocks, housing, interest rates is difficult if not impossible.
Just saying you will need luck to pull it off. Recognize behavioral finance as emotion.

[VentAlarm]

We would definitely be living lean for years 2-4 (although my salary goes up $25k per year until I make partner, so these numbers are worst case scenario in year 2). The idea is when I make partner, we'd already be in a 10-yr house that's well within budget (at partner income), rather than a house we're already outgrowing or in an area we hate.

Definitely with you on charitable spending, but again the goal is this would be a lean period for about 3 years. We would of course change that as income rises.

If you can’t afford to give on your current budget, you won’t be able to afford to give with your future budget.

[White.Beard.Doc]

In general, if there is a very high likelihood that you will stay in the house for a very long time, and there is also a high likelihood that the monthly expense is affordable, go ahead and buy. Long term home ownership in good areas tends to work out very well.

[wideopenspaces]

I think you're going to be quite house poor. Your food budget is very very low, is that honestly how much you are spending right now on food, household items and alcohol in a hcol area? We spend more like $1200/month in mcol with 2 kids. And your kid line is low. We have a nanny too and we still pay for preschool 3 half days a week ($220/month) as well just to get our son ready for a classroom environment. And do you want your kids to do any activities? I am not sure what kind of vacation you are envisioning with 4k/ year but travel has gotten much more expensive even if you're driving and camping with little ones is not super fun. This budget doesn't seem realistic to me and I wouldn't want to do it even for 3 years. If you are set on it though I'd make sure to have not just the downpayment but a solid 3 month emergency fund in place as well as 20k or so for the inevitable house repair needed in that first year before you've had time to let that home maintenance savings built up.

[penumbra]

I think you're going to be quite house poor. Your food budget is very very low, is that honestly how much you are spending right now on food, household items and alcohol in a hcol area? We spend more like $1200/month in mcol with 2 kids. And your kid line is low. We have a nanny too and we still pay for preschool 3 half days a week ($220/month) as well just to get our son ready for a classroom environment. And do you want your kids to do any activities? I am not sure what kind of vacation you are envisioning with 4k/ year but travel has gotten much more expensive even if you're driving and camping with little ones is not super fun. This budget doesn't seem realistic to me and I wouldn't want to do it even for 3 years. If you are set on it though I'd make sure to have not just the downpayment but a solid 3 month emergency fund in place as well as 20k or so for the inevitable house repair needed in that first year before you've had time to let that home maintenance savings built up.

thanks. Do you think the $3,000/month home maintenance saving is unrealistically high? I just based it in the rule of thumb of ~2% of home value, but $36,000/year in maintenance would surprise me. My feeling is that 2% figure is not necessarily accurate for a small home with a high price in a HCOL area. If I were to reduce that maintenance saving to $1,000/month, all of a sudden I have $2,000 more in the budget to use.

[VentAlarm]

thanks. Do you think the $3,000/month home maintenance saving is unrealistically high? I just based it in the rule of thumb of ~2% of home value, but $36,000/year in maintenance would surprise me. My feeling is that 2% figure is not necessarily accurate for a small home with a high price in a HCOL area. If I were to reduce that maintenance saving to $1,000/month, all of a sudden I have $2,000 more in the budget to use.

Tough to say. All if takes is changing the windows and your in it for 50k+

[wideopenspaces]

thanks. Do you think the $3,000/month home maintenance saving is unrealistically high? I just based it in the rule of thumb of ~2% of home value, but $36,000/year in maintenance would surprise me. My feeling is that 2% figure is not necessarily accurate for a small home with a high price in a HCOL area. If I were to reduce that maintenance saving to $1,000/month, all of a sudden I have $2,000 more in the budget to use.

That really depends on the age of the house and its condition. If it's a new build, no you probably won't spend that much but if it's an older home you may very well spend that much and more in any given year. Plus I'm not sure if you are planning to pay for housecleaning, landscaping, lawn care, pest control, check ups on hvac, etc etc but I assume that would need to be accounted for in the home maintenance line item too.

[wideopenspaces]

Tough to say. All if takes is changing the windows and your in it for 50k+

Ugh, yes this is my life right now. 12 windows and 3 sliders: 55k. I had no idea windows could be so expensive!

[VentAlarm]

That really depends on the age of the house and its condition. If it's a new build, no you probably won't spend that much but if it's an older home you may very well spend that much and more in any given year. Plus I'm not sure if you are planning to pay for housecleaning, landscaping, lawn care, pest control, check ups on hvac, etc etc but I assume that would need to be accounted for in the home maintenance line item too.

True. You’ll need a pest service. Maybe a termite bond depending on part of the country. Even if you minimally maintain your lawn, that’s a couple hundred bucks a quarter. You’ll need lawn mower, blower, et al if you do your lawn yourself. Lawn companies will charge you an arm and a leg. Replacement air filters for your HVAC and fridge. A lot of these little things add up. You end up spending a few hundred bucks several times a year at Home Depot/lowes and likely some monthly costs.

[VentAlarm]

Ugh, yes this is my life right now. 12 windows and 3 sliders: 55k. I had no idea windows could be so expensive!

Where’s the dislike button? Put your kid through college, or install new windows?

[CordMcNally]

Ugh, yes this is my life right now. 12 windows and 3 sliders: 55k. I had no idea windows could be so expensive!

Is this a Renewal By Anderson quote?

[wideopenspaces]

Where’s the dislike button? Put your kid through college, or install new windows?

I know I told my husband that I guess only one of our kids was gonna go to college now 😆 But seriously it does mean putting off buying a new car to next year.

[wideopenspaces]

Is this a Renewal By Anderson quote?

Yep. Our cabin is in a rural location and the 3 contractors who work out there are booked 18 months out so Anderson is the only other option. It's strangely my husband who super wants the new windows and doesn't want to wait so here we are.

[CordMcNally]

Yep. Our cabin is in a rural location and the 3 contractors who work out there are booked 18 months out so Anderson is the only other option. It's strangely my husband who super wants the new windows and doesn't want to wait so here we are.

That sucks. They’re typically about at least twice as expensive as any other reputable business. You could probably tell the other contractors you’ll give them an extra $10k and they’ll bump you up the schedule and you’ll still save money.

[Turf Doc]

If you can’t afford to give on your current budget, you won’t be able to afford to give with your future budget.

who cares...