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Started By
Message
1
Posted on 5/8/24 at 10:57 am to JohnnyKilroy
quote:Considering home costs extend far beyond the monthly mortgage, why does that surprise you?
You make over 160k and feel like you can barely afford a ~1400 mortgage payment?
Posted on 5/8/24 at 10:58 am to jlovel7
Good job on your savings discipline!
Don't rush getting into a house. Nothing wrong with renting while you get used to being married.
Focus on monthly payment, not the house price. Learn about property taxes, insurance, PMI. A good banker can help you learn about the extra costs related to mortgages. But don't borrow the maximum amount that a banker says you can afford.
Plan on home maintenance expenses and your time.
Understand that your current financial obligations are likely at their lowest point. At least for several decades. Researching daycare costs might be eye opening.
Based on what you shared, it is likely you should look at cheaper houses.
You should look into Roths, both IRA or 401k. The best time to fund Roth's are early in your career and while your income is lower.
Don't rush getting into a house. Nothing wrong with renting while you get used to being married.
Focus on monthly payment, not the house price. Learn about property taxes, insurance, PMI. A good banker can help you learn about the extra costs related to mortgages. But don't borrow the maximum amount that a banker says you can afford.
Plan on home maintenance expenses and your time.
Understand that your current financial obligations are likely at their lowest point. At least for several decades. Researching daycare costs might be eye opening.
Based on what you shared, it is likely you should look at cheaper houses.
You should look into Roths, both IRA or 401k. The best time to fund Roth's are early in your career and while your income is lower.
Posted on 5/8/24 at 10:58 am to terriblegreen
quote:
What city?
If I had to guess...Fredericksburg? And he's not lying, there isn't shite there under $300K.
Posted on 5/8/24 at 11:00 am to Scruffy
quote:
Considering home costs extend far beyond the monthly mortgage, why does that surprise you?
You should easily be able to afford a $1,400 mortgage (including taxes and insurance) while making 160k.
Posted on 5/8/24 at 11:00 am to Scruffy
quote:
why does that surprise you
Because the general rule of thumb for comfortable affordability is like 25-28% of gross income
He’s at like 10%. So yea it’s pretty surprising he feels like he can barely afford his mortgage when considering his PITI is that low.
Posted on 5/8/24 at 11:01 am to jlovel7
Maybe you should move
Posted on 5/8/24 at 11:02 am to JohnnyKilroy
quote:
You make over 160k and feel like you can barely afford a ~1400 mortgage payment?
After factoring in property taxes, homeowners insurance, truck note, maxing out retirement accounts, and maintaining a healthy emergency cash buffer while living the quality of lifestyle I enjoy… yes. I spend significantly more on all these things combined and “paying myself first” than I do on my house note.
Posted on 5/8/24 at 11:03 am to GeauxGriff
So really you can barely afford your lifestyle, not your mortgage.
Posted on 5/8/24 at 11:04 am to Epic Cajun
quote:
You should easily be able to afford a $1,400 mortgage (including taxes and insurance) while making 160k.
I'd be curious what rents are in his area because that seems really low. Can't imagine renting would be that much less.
Posted on 5/8/24 at 11:04 am to GeauxGriff
quote:
After factoring in property taxes, homeowners insurance,
Should be included in that $1,400, unless you put zero down or something.
Posted on 5/8/24 at 11:05 am to JohnnyKilroy
I bought 350k and put down 65k. My note when I had it at 30 yrs term was well north of 1400k. That was with a 5% or so rate.
Posted on 5/8/24 at 11:06 am to Jake88
quote:
That was with a 5% or so rate.
Ok?
He said his rate is 2.5%
Posted on 5/8/24 at 11:09 am to Jake88
quote:
I bought 350k and put down 65k. My note when I had it at 30 yrs term was well north of 1400k. That was with a 5% or so rate.
Just run the numbers on a mortgage calculator.
325k home
65k down
2.5% rate
$2,400 insurance/yr
$2,700 taxes/yr
$1,452.31 monthly payment
Posted on 5/8/24 at 11:11 am to JohnnyKilroy
Even at 2.5% and 18% down, the monthly payment just for the mortgage is over 1400.
Posted on 5/8/24 at 11:15 am to Jake88
No it’s not. This is simple math.
325k house with 18% down at 2.5% interest is 1,053 for principal and interest
350k with 18% down at 2.5% interest is 1,134.
325k house with 18% down at 2.5% interest is 1,053 for principal and interest
350k with 18% down at 2.5% interest is 1,134.
Posted on 5/8/24 at 11:15 am to jlovel7
Congrats on being financially responsible people. Obviously you are very conservative spenders and likely reasonably frugal without being cheap in a bad way.
With that said I have a feeling your personality would likely be suited for being able to buy a fixer upper and remodeling a house that does not currently fit your needs/ wants but could do that with some work.
If this works for you then there are several benefits you could see. Lower purchase price which then has lower property tax and lower insurance. Then as your rehab/remodel you add feature you want and at the same time likely get tax rebates for new energy efficiency items.
Older fixer uppers could be a way to get into nice older established neighborhoods that may not be affordable as move in ready. If you go this route, develop.a.plan and do not move in until your main areas of comfort are ready to move in. Ie, master bedroom, master bath, main living area. The kitchen if serviceable can be attacked later as you want once you start using it and seeing how you would want it to function for you.
Also, you have lots of discretionary income currently going to investment accounts. Those funds can be scaled back to fund your remodel projects as the house should also be viewed as part of your investments.
With that said I have a feeling your personality would likely be suited for being able to buy a fixer upper and remodeling a house that does not currently fit your needs/ wants but could do that with some work.
If this works for you then there are several benefits you could see. Lower purchase price which then has lower property tax and lower insurance. Then as your rehab/remodel you add feature you want and at the same time likely get tax rebates for new energy efficiency items.
Older fixer uppers could be a way to get into nice older established neighborhoods that may not be affordable as move in ready. If you go this route, develop.a.plan and do not move in until your main areas of comfort are ready to move in. Ie, master bedroom, master bath, main living area. The kitchen if serviceable can be attacked later as you want once you start using it and seeing how you would want it to function for you.
Also, you have lots of discretionary income currently going to investment accounts. Those funds can be scaled back to fund your remodel projects as the house should also be viewed as part of your investments.
This post was edited on 5/8/24 at 11:18 am
Posted on 5/8/24 at 11:15 am to Jake88
I have zero idea what calculator you're looking at, but it's not right 
Posted on 5/8/24 at 11:16 am to HouseMom
I mean for most cities outside of top (which is the case here since 500k is non existant in nyc sf etc), 160k isn’t a bad income
Posted on 5/8/24 at 11:16 am to Epic Cajun
That estimate is actually pretty close.
My point was is that the OP is currently relatively cash rich, maxing out various investment accounts, and seems to be enjoying a good quality of life. He shouldn’t jeopardize that by getting himself stuck under a $500k house at a high interest rate.
My point was is that the OP is currently relatively cash rich, maxing out various investment accounts, and seems to be enjoying a good quality of life. He shouldn’t jeopardize that by getting himself stuck under a $500k house at a high interest rate.
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