Would you buy a house for 615k if you were us? UPDATE: under contract
Would you buy a house for 615k if you were us? UPDATE: under contract
DH, DW - mid 30s
2 kids under 5 (might have a third)
Income
DW:140k
DH: 60k
Income is very stable. DW supposed to get 10% plus raise soon, could be closer to 20% but basing budget off current. Otherwise DW income increases will pretty much just be COLA. Expect DH income to go up with promotions but trying not to count on anything. We are happy with our current work life balance.
Current house:
Expected to sell for 350k
Expected net from sell: ~ 170k
1900 sq feet, 0.3 acre
current PITI: 914
New house:
615k
3300 sq feet, 0.8 acre
Expected PITI (rate of 6.5%): 3400
Not even close to nicest house in this neighborhood. Many homes 1 million +
Taxes and insurance are very low where we live.
Investments:
~610k between 401k, tsp, HSA, Roth IRA, taxable
529: ~30k
Pensions should conservatively be 70k in todays dollars at retirement. Also eligible for SS.
Likely to receive inheritances from both sides that could easily be over a million but we are not counting on these and hopefully are 15+ years away.
Spending last year:
106k total
11k PITI
21k child care
16k charitable giving
21k groceries and eating out- includes diapers, household goods- don’t separate out some clothes for the kids from this, etc
8k travel
29k- everything else
NOTE: we expect childcare costs to stay steady as we are currently planning to send kids to private school.
Current savings rate: ~72k (max out all tax advantage space. 7k employer match). Tax advantage accounts have been maxed since we married 7 years ago.
Expecting our spending to go up ~32k per year. Hoping raise of around 15k will help offset some. I can run the numbers and see we are able to afford this. Trying to balance out some savings versus enjoying things now. Hoping to get some feedback on would you feel comfortable.
Thank you.
Update: under contract for purchase of this home. Appreciate everyone’s feedback. Will try to update down the road to let everyone know how it’s going.
2 kids under 5 (might have a third)
Income
DW:140k
DH: 60k
Income is very stable. DW supposed to get 10% plus raise soon, could be closer to 20% but basing budget off current. Otherwise DW income increases will pretty much just be COLA. Expect DH income to go up with promotions but trying not to count on anything. We are happy with our current work life balance.
Current house:
Expected to sell for 350k
Expected net from sell: ~ 170k
1900 sq feet, 0.3 acre
current PITI: 914
New house:
615k
3300 sq feet, 0.8 acre
Expected PITI (rate of 6.5%): 3400
Not even close to nicest house in this neighborhood. Many homes 1 million +
Taxes and insurance are very low where we live.
Investments:
~610k between 401k, tsp, HSA, Roth IRA, taxable
529: ~30k
Pensions should conservatively be 70k in todays dollars at retirement. Also eligible for SS.
Likely to receive inheritances from both sides that could easily be over a million but we are not counting on these and hopefully are 15+ years away.
Spending last year:
106k total
11k PITI
21k child care
16k charitable giving
21k groceries and eating out- includes diapers, household goods- don’t separate out some clothes for the kids from this, etc
8k travel
29k- everything else
NOTE: we expect childcare costs to stay steady as we are currently planning to send kids to private school.
Current savings rate: ~72k (max out all tax advantage space. 7k employer match). Tax advantage accounts have been maxed since we married 7 years ago.
Expecting our spending to go up ~32k per year. Hoping raise of around 15k will help offset some. I can run the numbers and see we are able to afford this. Trying to balance out some savings versus enjoying things now. Hoping to get some feedback on would you feel comfortable.
Thank you.
Update: under contract for purchase of this home. Appreciate everyone’s feedback. Will try to update down the road to let everyone know how it’s going.
Last edited by Lrt12 on Thu Mar 23, 2023 7:47 am, edited 1 time in total.
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Re: Would you buy a house for 615k if you were us?
I would. Others wouldn't.
But I also don't see how your $200k income supports spending $106k and saving $72k?
But I also don't see how your $200k income supports spending $106k and saving $72k?
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Re: Would you buy a house for 615k if you were us?
What's wrong with the 350k house? Certainly you can afford the upgrade but seems like you might be stretching your cashflow and might not be able to max your tax advantages accounts comfortably. Wouldn't be worth it to me without a good reason.
Re: Would you buy a house for 615k if you were us?
Sure. Increased PITI is 25K less raise of 15K is 10K increase in expense.
Saving 62K is still close to 30%
Sounds like a reasonable move.
Saving 62K is still close to 30%
Sounds like a reasonable move.
Re: Would you buy a house for 615k if you were us?
72k includes 7k employer match.dukeblue219 wrote: ↑Mon Mar 20, 2023 6:52 pm I would. Others wouldn't.
But I also don't see how your $200k income supports spending $106k and saving $72k?
200 - 65 - 106 = 29k in taxes. If he lives in a no or low state income tax state, maxes out 2 401ks and say an HSA or FSA that sounds about right.
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Re: Would you buy a house for 615k if you were us?
I always forget those existJags4186 wrote: ↑Mon Mar 20, 2023 6:58 pm72k includes 7k employer match.dukeblue219 wrote: ↑Mon Mar 20, 2023 6:52 pm I would. Others wouldn't.
But I also don't see how your $200k income supports spending $106k and saving $72k?
200 - 65 - 106 = 29k in taxes. If he lives in a no or low state income tax state, maxes out 2 401ks and say an HSA or FSA that sounds about right.
Re: Would you buy a house for 615k if you were us?
dukeblue219 wrote: ↑Mon Mar 20, 2023 6:52 pm I would. Others wouldn't.
But I also don't see how your $200k income supports spending $106k and saving $72k?
200k- 65k (7k is from employer match) -106k= leaves 29k. Don’t have the exact number we paid in taxes this year but our taxable income was less than 145k and we have 2 dependents. We don’t pay a lot of taxes currently.
Re: Would you buy a house for 615k if you were us?
We do actually like our current house. Mostly wants not needs involved in this move. Big one is current home is 3 bedrooms. We live ~2 hours from our family who visit often and we want them specifically to stay with us for time with kids, etc. DW also works full time from home and the new house has a great office (currently working from kitchen table) . Also neighborhood. We love a lot of our current neighbors but there are increasing rentals and Airbnb in our small neighborhood. Street is congested with cars on the street. New neighborhood has mature trees, big lots, neighborhood pool, no rentals. Basically an established neighborhood where as our current one is more of starter homes. New home has 3 car garage which is a dream for DH.aristotelian wrote: ↑Mon Mar 20, 2023 6:55 pm What's wrong with the 350k house? Certainly you can afford the upgrade but seems like you might be stretching your cashflow and might not be able to max your tax advantages accounts comfortably. Wouldn't be worth it to me without a good reason.
Re: Would you buy a house for 615k if you were us?
How much is private school?
Any flexibility with charitable giving? This is usually off the table for consideration but figured I’d ask since it is quite generous.
I think you can make it work but will you run into any money issues if DW gets pregnant and takes maternity leave? Also then private school tuition and daycare. Ouch
Any flexibility with charitable giving? This is usually off the table for consideration but figured I’d ask since it is quite generous.
I think you can make it work but will you run into any money issues if DW gets pregnant and takes maternity leave? Also then private school tuition and daycare. Ouch
Mid-40’s
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Re: Would you buy a house for 615k if you were us?
I think you can afford but I would still counsel against it. A 3300 sq ft house on 0.8 of an acre for 4, maybe 5 people? You're not going to own that house- that house is going to own you!
Think of all the extra consumption that the new house brings with it- HVAC costs triple, mandatory riding lawn mower, wife gets tired of cleaning a big house & hires a maid, repairs/painting/furnishing are $$$, etc, etc. What are you going to do with all the extra space?
Is there no house in the neighborhood that's a reasonable upgrade for a reasonable price, say 2200-2400 sq ft for $450k-$500k? Why buy a McMansion just because you can?
Over the life of your 30 year mortgage, you could end up paying an over $100k extra for each additional 500 sq ft- https://retipster.com/cost-bigger-house/
Edited to add- Plus, a house like that can attract aunts:
"You're slouching again, Ted" "Expired, expired... expired!" "It's a lot of house. I hope you can keep it clean"
Think of all the extra consumption that the new house brings with it- HVAC costs triple, mandatory riding lawn mower, wife gets tired of cleaning a big house & hires a maid, repairs/painting/furnishing are $$$, etc, etc. What are you going to do with all the extra space?
Is there no house in the neighborhood that's a reasonable upgrade for a reasonable price, say 2200-2400 sq ft for $450k-$500k? Why buy a McMansion just because you can?
Over the life of your 30 year mortgage, you could end up paying an over $100k extra for each additional 500 sq ft- https://retipster.com/cost-bigger-house/
Edited to add- Plus, a house like that can attract aunts:
"You're slouching again, Ted" "Expired, expired... expired!" "It's a lot of house. I hope you can keep it clean"
Last edited by Navillus1968 on Mon Mar 20, 2023 7:46 pm, edited 1 time in total.
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Re: Would you buy a house for 615k if you were us?
I'd stay put, personally. Get a nice sofa bed for the in laws and save yourself $299k.Lrt12 wrote: ↑Mon Mar 20, 2023 7:33 pmWe do actually like our current house. Mostly wants not needs involved in this move. Big one is current home is 3 bedrooms. We live ~2 hours from our family who visit often and we want them specifically to stay with us for time with kids, etc. DW also works full time from home and the new house has a great office (currently working from kitchen table) . Also neighborhood. We love a lot of our current neighbors but there are increasing rentals and Airbnb in our small neighborhood. Street is congested with cars on the street. New neighborhood has mature trees, big lots, neighborhood pool, no rentals. Basically an established neighborhood where as our current one is more of starter homes. New home has 3 car garage which is a dream for DH.aristotelian wrote: ↑Mon Mar 20, 2023 6:55 pm What's wrong with the 350k house? Certainly you can afford the upgrade but seems like you might be stretching your cashflow and might not be able to max your tax advantages accounts comfortably. Wouldn't be worth it to me without a good reason.
Re: Would you buy a house for 615k if you were us?
We will keep charitable giving consistent unless there is loss of income. DW will have 12 weeks 100% paid leave and plans to use 4 weeks of her own leave for maternity leave. Our family cost about 70k through different means to grow so far and we have basically one last chance for a third child through wrapping up a fertility treatment.mortfree wrote: ↑Mon Mar 20, 2023 7:38 pm How much is private school?
Any flexibility with charitable giving? This is usually off the table for consideration but figured I’d ask since it is quite generous.
I think you can make it work but will you run into any money issues if DW gets pregnant and takes maternity leave? Also then private school tuition and daycare. Ouch
Private school is 7k per year and goes up a little each year but maxes out around ~10k for high school.
Re: Would you buy a house for 615k if you were us?
Definitely hear your points and agree. Basically under this price point there wouldn’t be a house that would be worth us moving. The lack of an extra bedroom might be able to be solved once our kids are not little kids and can more easily share a bedroom if they desire. We aren’t opposed to them sharing. However, they are of the opposite sex.Navillus1968 wrote: ↑Mon Mar 20, 2023 7:40 pm I think you can afford but I would still counsel against it. A 3300 sq ft house on 0.8 of an acre for 4, maybe 5 people? You're not going to own that house- that house is going to own you!
Think of all the extra consumption that the new house brings with it- HVAC costs triple, mandatory riding lawn mower, wife gets tired of cleaning a big house & hires a maid, repairs/painting/furnishing are $$$, etc, etc. What are you going to do with all the extra space?
Is there no house in the neighborhood that's a reasonable upgrade for a reasonable price, say 2200-2400 sq ft for $450k-$500k? Why buy a McMansion just because you can?
Over the life of your 30 year mortgage, you could end up paying an over $100k extra for each additional 500 sq ft- https://retipster.com/cost-bigger-house/
Edited to add- Plus, a house like that can attract aunts:
"You're slouching again, Ted" "Expired, expired... expired!" "It's a lot of house. I hope you can keep it clean"
We do currently have a maid and expect the main living area to be about the same cost. DW can handle upstairs bedrooms and one bath. Of course some money will be spent on additional furnishing but not in a rush as we have the necessary from our current house. Current lawnmower will work for the new house.
I (DW) definitely value simplicity in our life especially working full time with two young kids. However, we don’t see our current home as a long term plan. We could definitely make do in our current home. Looking out at continuing to save at our current rate plus the pensions (which are stable; one federal govt) I don’t know if I want to end up the richest person in the grave yard.
Re: Would you buy a house for 615k if you were us?
I always use the rule of thumb of 3 times your gross pay with no debt. You can do it with both your incomes depending on how much you put down as the downpayment.
Re: Would you buy a house for 615k if you were us?
I also use 3x salary so I think you can afford it. (I don't know whether you need such a house.)
Re: Would you buy a house for 615k if you were us?
Lrt12 wrote: ↑Mon Mar 20, 2023 6:49 pm DH, DW - mid 30s
2 kids under 5 (might have a third)
Income
DW:140k
DH: 60k
Income is very stable. DW supposed to get 10% plus raise soon, could be closer to 20% but basing budget off current. Otherwise DW income increases will pretty much just be COLA. Expect DH income to go up with promotions but trying not to count on anything. We are happy with our current work life balance.
Current house:
Expected to sell for 350k
Expected net from sell: ~ 170k
1900 sq feet, 0.3 acre
current PITI: 914
New house:
615k
3300 sq feet, 0.8 acre
Expected PITI (rate of 6.5%): 3400
Not even close to nicest house in this neighborhood. Many homes 1 million +
Taxes and insurance are very low where we live.
Investments:
~610k between 401k, tsp, HSA, Roth IRA, taxable
529: ~30k
Pensions should conservatively be 70k in todays dollars at retirement. Also eligible for SS.
Likely to receive inheritances from both sides that could easily be over a million but we are not counting on these and hopefully are 15+ years away.
Spending last year:
106k total
11k PITI
21k child care
16k charitable giving
21k groceries and eating out- includes diapers, household goods- don’t separate out some clothes for the kids from this, etc
8k travel
29k- everything else
NOTE: we expect childcare costs to stay steady as we are currently planning to send kids to private school.
Current savings rate: ~72k (max out all tax advantage space. 7k employer match). Tax advantage accounts have been maxed since we married 7 years ago.
Expecting our spending to go up ~32k per year. Hoping raise of around 15k will help offset some. I can run the numbers and see we are able to afford this. Trying to balance out some savings versus enjoying things now. Hoping to get some feedback on would you feel comfortable.
Thank you.
You currently have $610k saved and spend about $109k/yr. Let's call it a round $100k if you have your house paid off. To reach financial independence on $100k/yr spending you will need about $2.5 million. If you cut your savings down to $30k a year, at 5% growth it will take you to 19 more years to reach financial independence. If you continue as is saving $72k/yr it will take you about 13.5 years to reach financial independence.
Both values would take long cause you would need a bit more to pay off the house.
Either way, round about, it will take you almost 6 extra years to reach financial independence in the new house. Probably even longer if you consider saving the extra cash to also pay off the mortgage. Maybe closer to 8 years.
Is that worth it for you? If it is, then go ahead. You can afford it.
I would like to add, at some point in the future I suppose interest rates will decrease and you will be able to refinance for lower payments. Probably.
A time to EVALUATE your jitters: |
viewtopic.php?p=1139732#p1139732
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Re: Would you buy a house for 615k if you were us?
We were in a similar spot as far as income, home price, and interest rate when we bought our home in 1999. Smaller home because VHCOL.
Re: Would you buy a house for 615k if you were us?
I'd wait 2 years. In that 2 years I would pay the new house payment for the current house. This tells you
1. Do you want to put that much towards house
2. Likely at lower rate right now so extra payment goes further
3. Will you have kid 3
4. Kids are 2 or more years from school. If private school doesn't need as nice a school district vs public. Also will 1 or more kids have dyslexia or adhd which can effect school choice.
5. Work from home might or might not be permanent. The next 2 years will tell
1. Do you want to put that much towards house
2. Likely at lower rate right now so extra payment goes further
3. Will you have kid 3
4. Kids are 2 or more years from school. If private school doesn't need as nice a school district vs public. Also will 1 or more kids have dyslexia or adhd which can effect school choice.
5. Work from home might or might not be permanent. The next 2 years will tell
Re: Would you buy a house for 615k if you were us?
Thank you for your insight. I think you might have missed the pensions worth ~70k per year. These will start at 57. We plan to retire at 57/56 (22 more years) to be able to carry my health insurance into retirement. We are also still eligible for social security.EnjoyIt wrote: ↑Mon Mar 20, 2023 11:52 pmLrt12 wrote: ↑Mon Mar 20, 2023 6:49 pm DH, DW - mid 30s
2 kids under 5 (might have a third)
Income
DW:140k
DH: 60k
Income is very stable. DW supposed to get 10% plus raise soon, could be closer to 20% but basing budget off current. Otherwise DW income increases will pretty much just be COLA. Expect DH income to go up with promotions but trying not to count on anything. We are happy with our current work life balance.
Current house:
Expected to sell for 350k
Expected net from sell: ~ 170k
1900 sq feet, 0.3 acre
current PITI: 914
New house:
615k
3300 sq feet, 0.8 acre
Expected PITI (rate of 6.5%): 3400
Not even close to nicest house in this neighborhood. Many homes 1 million +
Taxes and insurance are very low where we live.
Investments:
~610k between 401k, tsp, HSA, Roth IRA, taxable
529: ~30k
Pensions should conservatively be 70k in todays dollars at retirement. Also eligible for SS.
Likely to receive inheritances from both sides that could easily be over a million but we are not counting on these and hopefully are 15+ years away.
Spending last year:
106k total
11k PITI
21k child care
16k charitable giving
21k groceries and eating out- includes diapers, household goods- don’t separate out some clothes for the kids from this, etc
8k travel
29k- everything else
NOTE: we expect childcare costs to stay steady as we are currently planning to send kids to private school.
Current savings rate: ~72k (max out all tax advantage space. 7k employer match). Tax advantage accounts have been maxed since we married 7 years ago.
Expecting our spending to go up ~32k per year. Hoping raise of around 15k will help offset some. I can run the numbers and see we are able to afford this. Trying to balance out some savings versus enjoying things now. Hoping to get some feedback on would you feel comfortable.
Thank you.
You currently have $610k saved and spend about $109k/yr. Let's call it a round $100k if you have your house paid off. To reach financial independence on $100k/yr spending you will need about $2.5 million. If you cut your savings down to $30k a year, at 5% growth it will take you to 19 more years to reach financial independence. If you continue as is saving $72k/yr it will take you about 13.5 years to reach financial independence.
Both values would take long cause you would need a bit more to pay off the house.
Either way, round about, it will take you almost 6 extra years to reach financial independence in the new house. Probably even longer if you consider saving the extra cash to also pay off the mortgage. Maybe closer to 8 years.
Is that worth it for you? If it is, then go ahead. You can afford it.
I would like to add, at some point in the future I suppose interest rates will decrease and you will be able to refinance for lower payments. Probably.
Re: Would you buy a house for 615k if you were us?
Definitely understand this. We have been looking in this specific neighborhood for some time and are excited about this particular house/lot. We will take the school situation year by year. Both our current home and new home are in excellent public school districts (feed into the same high school). We don’t want to be locked into the private school so we do want to stay in our current public school district. My work from home is not related to Covid.CaptainT wrote: ↑Tue Mar 21, 2023 5:27 am I'd wait 2 years. In that 2 years I would pay the new house payment for the current house. This tells you
1. Do you want to put that much towards house
2. Likely at lower rate right now so extra payment goes further
3. Will you have kid 3
4. Kids are 2 or more years from school. If private school doesn't need as nice a school district vs public. Also will 1 or more kids have dyslexia or adhd which can effect school choice.
5. Work from home might or might not be permanent. The next 2 years will tell
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Re: Would you buy a house for 615k if you were us?
We make ~$300k/yr, spend <$50k/yr (so save A LOT more), have the same size family, I WFH and wife is hybrid, our (paid off, worth ~$420k) townhome is 3bdr and 1450sq. ft home, and we don't feel comfortable spending >$600k for a home (with current interest rates). We're kind of sitting on the sidelines waiting to see if the market tanks and then we'd upgrade (we want a basement, primarily because in-laws will be living with us at some point). What you are looking at sounds like what we we'd be interested in, but that's >$1M where we live.
But you asked what we would do. We refuse to stretch at all for a home when we already have one that meets our needs. I don't think what you are considering is out of line with what most people are willing to spend housing-wise and you'll easily get approved for a loan.
But you asked what we would do. We refuse to stretch at all for a home when we already have one that meets our needs. I don't think what you are considering is out of line with what most people are willing to spend housing-wise and you'll easily get approved for a loan.
Re: Would you buy a house for 615k if you were us?
I personally would not just because we are not the type to buy multiple homes. We purchased our home in 2012 and don't plan to move ever. You are financially able to buy that $615k house so the question is do you really want to? That's up to you. Your financial house is in order and income says you can. The choice is yours!
Light weight baby!
Re: Would you buy a house for 615k if you were us?
22 years is a long time away. Technically if all goes perfectly, no job loss, no injury, you probably don't need to save another dime. But then again, I am not of the mindset of working full time deep into my late 50s. Are you two really interested in doing what you are doing for the next 22 years? Is your job really 100% secure? These are only questions you can answer.Lrt12 wrote: ↑Tue Mar 21, 2023 6:02 amThank you for your insight. I think you might have missed the pensions worth ~70k per year. These will start at 57. We plan to retire at 57/56 (22 more years) to be able to carry my health insurance into retirement. We are also still eligible for social security.EnjoyIt wrote: ↑Mon Mar 20, 2023 11:52 pmLrt12 wrote: ↑Mon Mar 20, 2023 6:49 pm DH, DW - mid 30s
2 kids under 5 (might have a third)
Income
DW:140k
DH: 60k
Income is very stable. DW supposed to get 10% plus raise soon, could be closer to 20% but basing budget off current. Otherwise DW income increases will pretty much just be COLA. Expect DH income to go up with promotions but trying not to count on anything. We are happy with our current work life balance.
Current house:
Expected to sell for 350k
Expected net from sell: ~ 170k
1900 sq feet, 0.3 acre
current PITI: 914
New house:
615k
3300 sq feet, 0.8 acre
Expected PITI (rate of 6.5%): 3400
Not even close to nicest house in this neighborhood. Many homes 1 million +
Taxes and insurance are very low where we live.
Investments:
~610k between 401k, tsp, HSA, Roth IRA, taxable
529: ~30k
Pensions should conservatively be 70k in todays dollars at retirement. Also eligible for SS.
Likely to receive inheritances from both sides that could easily be over a million but we are not counting on these and hopefully are 15+ years away.
Spending last year:
106k total
11k PITI
21k child care
16k charitable giving
21k groceries and eating out- includes diapers, household goods- don’t separate out some clothes for the kids from this, etc
8k travel
29k- everything else
NOTE: we expect childcare costs to stay steady as we are currently planning to send kids to private school.
Current savings rate: ~72k (max out all tax advantage space. 7k employer match). Tax advantage accounts have been maxed since we married 7 years ago.
Expecting our spending to go up ~32k per year. Hoping raise of around 15k will help offset some. I can run the numbers and see we are able to afford this. Trying to balance out some savings versus enjoying things now. Hoping to get some feedback on would you feel comfortable.
Thank you.
You currently have $610k saved and spend about $109k/yr. Let's call it a round $100k if you have your house paid off. To reach financial independence on $100k/yr spending you will need about $2.5 million. If you cut your savings down to $30k a year, at 5% growth it will take you to 19 more years to reach financial independence. If you continue as is saving $72k/yr it will take you about 13.5 years to reach financial independence.
Both values would take long cause you would need a bit more to pay off the house.
Either way, round about, it will take you almost 6 extra years to reach financial independence in the new house. Probably even longer if you consider saving the extra cash to also pay off the mortgage. Maybe closer to 8 years.
Is that worth it for you? If it is, then go ahead. You can afford it.
I would like to add, at some point in the future I suppose interest rates will decrease and you will be able to refinance for lower payments. Probably.
I know me and my family, and we would not be interested with full time work deep into our 50s. Part time, yeah, sure, maybe, it depends on the work and how much we still enjoy it. But full time if we don't have to, no way. There is way too much fun to be had out there without working 5 days a week (and we don't.) The choice is yours on what is important to you and how you want to proceed from here.
A time to EVALUATE your jitters: |
viewtopic.php?p=1139732#p1139732
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Re: Would you buy a house for 615k if you were us?
There is some truth to this. Some hyperbole as well. But, it's worth considering. We were in a very similar situation, both financially and house-wise 18mo. ago. We made the move from 1800sqft on .16ac to 2400sqft on 12ac. and have zero regrets. We love it out here. The new-to-us house and accompanying property has definitely added to the ancillary expenses and chores as mentioned above, however I wouldn't go so far to say the 'house owns us', Now, our new PITI was ~1.8x the old one, not 3.7x, But that's pretty much the price of admission now with interest rates in the 6-7% range.Navillus1968 wrote: ↑Mon Mar 20, 2023 7:40 pm A 3300 sq ft house on 0.8 of an acre for 4, maybe 5 people? You're not going to own that house- that house is going to own you!
Think of all the extra consumption that the new house brings with it- HVAC costs triple, mandatory riding lawn mower, wife gets tired of cleaning a big house & hires a maid, repairs/painting/furnishing are $$$, etc, etc. What are you going to do with all the extra space?
y'all have some excellent financial behaviors established, thus, I think a rational argument could be made going either way. So the way I see it, this just comes down to: "how badly do you want to move?"
If your outgo exceeds your income, your upkeep will be your downfall
Re: Would you buy a house for 615k if you were us?
Lrt12,Lrt12 wrote: ↑Tue Mar 21, 2023 6:06 amDefinitely understand this. We have been looking in this specific neighborhood for some time and are excited about this particular house/lot. We will take the school situation year by year. Both our current home and new home are in excellent public school districts (feed into the same high school). We don’t want to be locked into the private school so we do want to stay in our current public school district. My work from home is not related to Covid.CaptainT wrote: ↑Tue Mar 21, 2023 5:27 am I'd wait 2 years. In that 2 years I would pay the new house payment for the current house. This tells you
1. Do you want to put that much towards house
2. Likely at lower rate right now so extra payment goes further
3. Will you have kid 3
4. Kids are 2 or more years from school. If private school doesn't need as nice a school district vs public. Also will 1 or more kids have dyslexia or adhd which can effect school choice.
5. Work from home might or might not be permanent. The next 2 years will tell
Thank you for trusting the community to provide meaningful input.
My background is I buy and sell residential real estate, including single family homes. If someone asked me to use my crystal ball, I would say that home prices and interest rates will both come down sometime in the next three years. My disclaimer is my crystal ball works the same as everyone else's - not that great . As a personal note, I plan to sell a single family home (rental) soon because I believe I can repurchase a similar home in the same neighborhood within 12-36 months for a 10-20% lower price so I am actually putting my money where my mouth is.
Whenever you see a residential property, know that the home is livable, but to get it to what you want, you will need to spend money, sometimes significant funds. Newer homes often use cheaper materials, older homes have more wear and tear. This is a principle, not a universal truth. Also, whenever something that seems like "a great deal', know that within a 6-12 months something else as good (or better) often shows up. There are very few once in a lifetime opportunities. In residential real estate, people are always selling and it has nothing to do with economics, markets, interest rates, or expected returns.
All that is a long way to say ultimately it is your decision. From the tone of your responses, it sounds like you are leaning towards buying. If you were my neighbor or family member asking me, I would say stay where you are, continue to save, invest your money in short-term instruments (MMA get 5% currently), keep your eyes on the neighborhood you want to buy in, visit there to take a walk in the evening, or even stay in an airbnb in that neighborhood if one exists as way to experience the neighborhood.
All the best to you and your family.
Re: Would you buy a house for 615k if you were us?
Are you enrolling the kids in private school because you do not believe the public school provides a good education?
If so I would think hard about moving to a new community where you still don't think they provide a good public education. I would move to a community with a good public school system and bank that $30K / year instead. For DH, almost his entire take home will be going toward private schooling for the kids.
Edit to add - Back of the envelope says that for 3 kids of private school at $10K / year prices today you'll ultimately pay close to the $615K sticker price of the house to the private school. Spend a little more for a good public school...
If so I would think hard about moving to a new community where you still don't think they provide a good public education. I would move to a community with a good public school system and bank that $30K / year instead. For DH, almost his entire take home will be going toward private schooling for the kids.
Edit to add - Back of the envelope says that for 3 kids of private school at $10K / year prices today you'll ultimately pay close to the $615K sticker price of the house to the private school. Spend a little more for a good public school...
Last edited by wilked on Tue Mar 21, 2023 7:44 am, edited 2 times in total.
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Re: Would you buy a house for 615k if you were us?
You can afford it. Though you may be able to improve your savings rate. Do you need it? I don't know, probably not.
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Re: Would you buy a house for 615k if you were us?
Oh my gosh, just do it. It's a house you love, in the area you want to be, that will give you a bit more space. You've been maxing out retirement for 7+ years and have growing careers (at least DH's income might grow), a pension that will replace a lot of your current income needs (and you don't say it, but likely some level of SS for one or both of you), the ability to afford this at current interest rates (making it even more affordable should you be able to refinance down the line), and plenty of areas you could "cut back" if needed to afford the house (which itself will/should/likely will appreciate in value and become its own source of savings toward retirement expenses when you both likely downsize at some point).
The people saying no or who are reluctant are way too cautious or devoted to an early-retirement-at-all-costs mindset that ignores the fact that you need to/should want to have a good life both in retirement AND now, and that one aspect of having a good life is living in a home you love (particularly when you're a parent with kids and thus naturally more homebodies than others might be).
The people saying no or who are reluctant are way too cautious or devoted to an early-retirement-at-all-costs mindset that ignores the fact that you need to/should want to have a good life both in retirement AND now, and that one aspect of having a good life is living in a home you love (particularly when you're a parent with kids and thus naturally more homebodies than others might be).
Re: Would you buy a house for 615k if you were us?
Appreciate everyone’s comments. If it were completely up to me I would remain in our current house. There are not enough negatives for me currently to warrant moving. We have been looking in this neighborhood for a little over 2 years and there has been one other house we have liked (you can see a previous post for that discussion). Obviously had we bought that house for 530k at ~3% interest rate in may of 2021 it would have likely seemed now to have been a great decision. You never know. Based on where we are I am concerned I will fall into default mode of saving money just to save money and not balance current consumption.
We both enjoy our jobs currently. They are low stress and provide a good amount of time off. Of course things can change.
Ultimately I would probably avoid as much change as possible without gentle pushes from DH. He and I are a great team and are on the same page for the finances in our home.
We both enjoy our jobs currently. They are low stress and provide a good amount of time off. Of course things can change.
Ultimately I would probably avoid as much change as possible without gentle pushes from DH. He and I are a great team and are on the same page for the finances in our home.
Re: Would you buy a house for 615k if you were us?
I didn't crunch the numbers but if you buy the more expensive house it will be very hard to get by with just one income if you need to.
One potential problem is that if you have another kid and it has even moderate and temporary health issues then using daycare might not be a good choice or even possible choice for a kid with health problems.
You may also have expensive fertility treatments or adoption costs in order to have a third kid.
You cannot expect the day care costs to really go down when the kids start school either since you will need to pay for after school care, care when they are home sick, care over school holidays and the summer.
There will also be costs when the kids start getting involved in sports and activities.
If DH has any desire to be a stay at home parent then that could be a real option for him especially if you have a third kid. Between taxes, daycare, commuting costs, etc he may not really be clearing much by working. Be sure to make a detailed spreadsheet for this, people sometimes crunch the numbers only to find that it is actually costing them money to have both spouses work.
How much is in the taxable account?
If you have $400K in the taxable account and could use $300K to buy the next house then that would make your numbers look a lot better.
If you have a lot of money in the taxable account but you do not want to spend it(while keeping a good emergency fund) then that may be a sign that you don't want the bigger house badly enough to buy it.
That is important since with two or three kids you will need a large emergency fund. If you have a lot in the taxable account then you might also be able to make a huge downpayment to make your monthly number work a lot better.
There are several variations on the saying, "You can do anything you want, but not everything you want."Would you buy a house for 615k if you were us?
You problem is that you have too many wants for your income;
1) Larger house
2) Private schools
3) retire early
4) pay for at least part of college for your kids
5) charitable giving.
6) Not planning to spend a lot of your taxable account on the next house(I would assume)
Realistically you can't afford it all so you need to choose what you want to give up.
It sounds like you only have about 13 years until your oldest kid will start college and if you have your third kid soon then you might even end up with three kids in college at the same time. It will be real hard to make the number for college work.
If you could get into a time machine and ask your grown up 30 year old kids if they would rather be raised in a larger house or have smaller student loans I would bet that they would choose the smaller student loans.
That is a big jump in prices and you would likely be going from having something like a 3% mortgage to a 6.5% mortgage.
That is too extreme.
It sounds like your current house may not be working well for you now but there are likely houses in the $450K-$500K range that might work a lot better. They would still be a big stretch in your situation and even at that price they would not be easy to justify but it might be more realistic especially if you can use a good amount of the taxable account for the upgrade.
Re: Would you buy a house for 615k if you were us?
Damn and I'm over here close to 250k with a 250k mortgage.
Re: Would you buy a house for 615k if you were us?
Agree that you should make the move if you are fairly certain this is 'the' house.
We made a similar move from a similar position two years ago. Yes, it's absolutely more to take care of, but honestly, despite going from ~1,500 square feet in the city to an acre and four historic buildings in the country, the extra work and expense tends to come in waves - the day to day feels about the same.
Would our family have been fine in the smaller house? Of course. However we have the benefit of being able to share this with them for a decade-plus and then we'll decide whether we downsize. In the city house we were never more than a wall away from everyone else and bringing anything new into home meant playing a constant game of 'where are we going to fit this?' My wife and I now have our own separate offices. We have a huge family room that is the center of the kid's home life and keeps much of the kid mess isolated. We have the room to effortlessly take on bigger projects and hobbies as the kids get older. Will this delay our retirement? Undoubtedly, although we are pretty much in coast mode already. We value building a full life now, so the effort and expense are well worth it.
We made a similar move from a similar position two years ago. Yes, it's absolutely more to take care of, but honestly, despite going from ~1,500 square feet in the city to an acre and four historic buildings in the country, the extra work and expense tends to come in waves - the day to day feels about the same.
Would our family have been fine in the smaller house? Of course. However we have the benefit of being able to share this with them for a decade-plus and then we'll decide whether we downsize. In the city house we were never more than a wall away from everyone else and bringing anything new into home meant playing a constant game of 'where are we going to fit this?' My wife and I now have our own separate offices. We have a huge family room that is the center of the kid's home life and keeps much of the kid mess isolated. We have the room to effortlessly take on bigger projects and hobbies as the kids get older. Will this delay our retirement? Undoubtedly, although we are pretty much in coast mode already. We value building a full life now, so the effort and expense are well worth it.
Re: Would you buy a house for 615k if you were us?
I would put only 20% down and borrow 3x DW income, total $525k. This way if DH should lose job or elect to raise kids, no financial strife would ensue.
But, mostly likely I would not move. You don't need lifestyle inflation at your age - far better to maintain high savings rate for now.
But, mostly likely I would not move. You don't need lifestyle inflation at your age - far better to maintain high savings rate for now.
BH Consumer FAQ: |
Car? Used Toyota, Lexus or Miata. |
House? 20% down and 3x salary. |
Vacation house? No. |
Umbrella? $1 million. |
Goods? Costco.
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Re: Would you buy a house for 615k if you were us?
Well, it's 50% up to you, and in my book, non-action trumps action in cases of a tieLrt12 wrote: ↑Tue Mar 21, 2023 8:04 am Appreciate everyone’s comments. If it were completely up to me I would remain in our current house. There are not enough negatives for me currently to warrant moving. We have been looking in this neighborhood for a little over 2 years and there has been one other house we have liked (you can see a previous post for that discussion). Obviously had we bought that house for 530k at ~3% interest rate in may of 2021 it would have likely seemed now to have been a great decision. You never know. Based on where we are I am concerned I will fall into default mode of saving money just to save money and not balance current consumption.
We both enjoy our jobs currently. They are low stress and provide a good amount of time off. Of course things can change.
Ultimately I would probably avoid as much change as possible without gentle pushes from DH. He and I are a great team and are on the same page for the finances in our home.
I would not feel comfortable buying that much house relative to income. Man plans and God laughs when it comes to counting on a pension 22 years from now. I'm of a generation that had promised pensions evaporate on us.
Good luck to you. I'd push your views a bit more energetically. Your DH can take it
I get the FI part but not the RE part of FIRE.
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Re: Would you buy a house for 615k if you were us?
Based on your claim of stable jobs, and the list of big upgrades to the house/neighborhood, yes I absolutely would, assuming you don't mind pushing out financial independence for at a least a few years.
I made a similar move a couple years ago to a house that checks many of the boxes you mentioned. Huge upgrade in quality of life for my family, in many ways.
I made a similar move a couple years ago to a house that checks many of the boxes you mentioned. Huge upgrade in quality of life for my family, in many ways.
Re: Would you buy a house for 615k if you were us?
Agree with you.Chadnudj wrote: ↑Tue Mar 21, 2023 7:40 am Oh my gosh, just do it. It's a house you love, in the area you want to be, that will give you a bit more space. You've been maxing out retirement for 7+ years and have growing careers (at least DH's income might grow), a pension that will replace a lot of your current income needs (and you don't say it, but likely some level of SS for one or both of you), the ability to afford this at current interest rates (making it even more affordable should you be able to refinance down the line), and plenty of areas you could "cut back" if needed to afford the house (which itself will/should/likely will appreciate in value and become its own source of savings toward retirement expenses when you both likely downsize at some point).
The people saying no or who are reluctant are way too cautious or devoted to an early-retirement-at-all-costs mindset that ignores the fact that you need to/should want to have a good life both in retirement AND now, and that one aspect of having a good life is living in a home you love (particularly when you're a parent with kids and thus naturally more homebodies than others might be).
Have to correct that in this household, DW has the higher income and raise coming, not DH.
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Re: Would you buy a house for 615k if you were us?
Looks good to me, but I know you'll get a lot of push back from other Bogleheads. The most likely scenario is you buy the house, rates will decrease within a few years, you'll refinance, lowering your PITI, your incomes will keep increasing, and you'll end up just fine and live a nicer lifestyle in a better neighborhood.
Others will say the PITI is too much and it's too risky.
Others will say the PITI is too much and it's too risky.
Re: Would you buy a house for 615k if you were us?
It seems that you have done a nice job of saving already...congrats! For your decision, I think it depends on what you want. If FI and early retirement are the priorities, stay where you are. If you want to live in a nicer environment at the expense of not saving as much, buy the house.
Re: Would you buy a house for 615k if you were us?
We had a similar choice 30 years ago, and bought the next house. Your new neighborhood sounds a lot nicer, less traffic, more trees.
I'd do it.
I'd do it.
Re: Would you buy a house for 615k if you were us?
Really appreciate all the comments. The neighborhood is definitely a big difference in terms of what we are looking for long term. However we are close with some of the other young families on our current street so that is hard for me to leave. New house is only 5 minutes from our current house and also has young families but would need to meet people in the new neighborhood. We have placed an offer. There are multiple offers and we are not interested in a bidding war. The house came on the market yesterday and is very competitively priced. We will see what happens. Will update.
Re: Would you buy a house for 615k if you were us?
I wouldn’t. But I grew up in a 900 sqft house, which probably exposed me to lots of nasty stuff given that it was nearly a hundred years old.
What’s the reason for making the move? Interest rates are high. And the economy is on shaky ground.
Could you keep your existing home, rent it out, and still put enough down on the new one? I can’t wrap my head around swapping what’s probably a low rate for a much higher rate?
What’s the reason for making the move? Interest rates are high. And the economy is on shaky ground.
Could you keep your existing home, rent it out, and still put enough down on the new one? I can’t wrap my head around swapping what’s probably a low rate for a much higher rate?
Re: Would you buy a house for 615k if you were us?
You can afford it, but you may have to cut down in your savings rate to do so. The extra space will be much needed/appreciated. We had our 3rd child while living in an 1100sq ft apartment then moved to a 3k sq ft house. Moved 1.5 years ago to 4200sq ft and currently have more space than what we need/use regularly, but I like having it. Do you feel like you have an extra $2500 for a mortgage every month comfortably? Your utilities will increase significantly as well. If the new place has a pool or anything like that it can get costly very quick (always several thousand a year spent on pool items at my house). Landscaping/mowing is also significantly more for a bigger place.
I agree 100% you need the space, but I would either sell taxable for a down payment or make sure you have your old house sold and use all of that money for a down payment. My house is 569k and we put 20% down and have a PITI of $2300 monthly. Not stressful for us at all, but our base salary is 245k plus extras which amounted to 40-45k last year. We also have less savings than you and a smaller overall savings percentage which leads to more cash in hand every month.
I agree 100% you need the space, but I would either sell taxable for a down payment or make sure you have your old house sold and use all of that money for a down payment. My house is 569k and we put 20% down and have a PITI of $2300 monthly. Not stressful for us at all, but our base salary is 245k plus extras which amounted to 40-45k last year. We also have less savings than you and a smaller overall savings percentage which leads to more cash in hand every month.
Re: Would you buy a house for 615k if you were us?
I would buy the house if it were a clear lifestyle upgrade for the growing family. Some of your comments indicate that it may not be a clear upgrade though, and I think you could wait a couple of years before the kids need separate rooms.
I would also spend substantially less on all items you mentioned except possibly for food/diaper and travel categories.
Vehicles & transportation are usually the 2nd highest spend category for Americans. I do not see this line item in your budget. How are you getting around, is it sustainable, how much will it cost in the future?
Best of luck to you and the growing family.
I would also spend substantially less on all items you mentioned except possibly for food/diaper and travel categories.
Vehicles & transportation are usually the 2nd highest spend category for Americans. I do not see this line item in your budget. How are you getting around, is it sustainable, how much will it cost in the future?
Best of luck to you and the growing family.
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Re: Would you buy a house for 615k if you were us?
Good luck on your bid, although it seems as if a bidding war is likely if there are multiple offers 24 hours into the listing.Lrt12 wrote: ↑Tue Mar 21, 2023 11:17 am Really appreciate all the comments. The neighborhood is definitely a big difference in terms of what we are looking for long term. However we are close with some of the other young families on our current street so that is hard for me to leave. New house is only 5 minutes from our current house and also has young families but would need to meet people in the new neighborhood. We have placed an offer. There are multiple offers and we are not interested in a bidding war. The house came on the market yesterday and is very competitively priced. We will see what happens. Will update.
If you miss out on this house, just keep your powder dry & be patient- in a year or two a lot can change. The perfect house might drop into your laps in the interim.
I do think you're due an upgrade with all the factors you mentioned in the thread. If I was in your position, I would set my sights a bit lower: price <$600k & size smaller than >3000 sq ft.
Or, maybe all the raises & promotions you mentioned will come to fruition & you'll be more comfortable at the higher price point. It's quite clear that you guys have been doing your due diligence, so I think it'll all work out in the end.
Re: Would you buy a house for 615k if you were us?
Ah, I see your point. I was focused more on the latter/bolded part of this, suggesting that (after this soon-to-be-raise) DW will only have COLA adjustments while DH has income growth potential via promotions:runner540 wrote: ↑Tue Mar 21, 2023 9:31 amAgree with you.Chadnudj wrote: ↑Tue Mar 21, 2023 7:40 am Oh my gosh, just do it. It's a house you love, in the area you want to be, that will give you a bit more space. You've been maxing out retirement for 7+ years and have growing careers (at least DH's income might grow), a pension that will replace a lot of your current income needs (and you don't say it, but likely some level of SS for one or both of you), the ability to afford this at current interest rates (making it even more affordable should you be able to refinance down the line), and plenty of areas you could "cut back" if needed to afford the house (which itself will/should/likely will appreciate in value and become its own source of savings toward retirement expenses when you both likely downsize at some point).
The people saying no or who are reluctant are way too cautious or devoted to an early-retirement-at-all-costs mindset that ignores the fact that you need to/should want to have a good life both in retirement AND now, and that one aspect of having a good life is living in a home you love (particularly when you're a parent with kids and thus naturally more homebodies than others might be).
Have to correct that in this household, DW has the higher income and raise coming, not DH.
DW supposed to get 10% plus raise soon, could be closer to 20% but basing budget off current. Otherwise DW income increases will pretty much just be COLA. Expect DH income to go up with promotions but trying not to count on anything.
Re: Would you buy a house for 615k if you were us?
We are not interested in becoming landlords at this time or ever (ha). Interest rates obviously are playing a large role here. Our current rate is 2.75%. Feeling a bit like golden handcuffs for sure. In an ideal world income goes up, interest rates go down and there is a lot more wiggle room.
We don’t plan on selling any of our current investments for this purchase. We would put 20% down (123k) from the sell of our current house. We would then have conservatively around 35k left from the sell of our current house. Our taxable account is 100% VTSAX and is 125k currently.
We have a 2016 SUV with 62k miles on it and my husband has a 1999 Toyota as his daily driver. My husband drives 3 miles to work every day. I work from home. Thankfully we aren’t putting a lot of miles on our vehicles currently. Daycare is 5 miles from our house. If we have a third child in my opinion we will have to buy a van.
Thanks for the encouragement. I am of the opinion no house is the perfect house and irreplaceable. This house checks a lot of specific boxes for us: 5 bedrooms, on a cul de sac, our ideal neighborhood, flat and wooded lot, quiet street, large laundry room, 3 car garage, open kitchen to the living room, nice office area, beautiful back yard, etc. But in the end financial security and maintaining work life balance to spend as much time as we can with our kids is the most important thing to us.
This site has made a significant difference in our finances since I stumbled upon it about 10 years ago. Would not be where we are without the wisdom of many on this board.
They are accepting offers until noon tomorrow. I will update.
We don’t plan on selling any of our current investments for this purchase. We would put 20% down (123k) from the sell of our current house. We would then have conservatively around 35k left from the sell of our current house. Our taxable account is 100% VTSAX and is 125k currently.
We have a 2016 SUV with 62k miles on it and my husband has a 1999 Toyota as his daily driver. My husband drives 3 miles to work every day. I work from home. Thankfully we aren’t putting a lot of miles on our vehicles currently. Daycare is 5 miles from our house. If we have a third child in my opinion we will have to buy a van.
Thanks for the encouragement. I am of the opinion no house is the perfect house and irreplaceable. This house checks a lot of specific boxes for us: 5 bedrooms, on a cul de sac, our ideal neighborhood, flat and wooded lot, quiet street, large laundry room, 3 car garage, open kitchen to the living room, nice office area, beautiful back yard, etc. But in the end financial security and maintaining work life balance to spend as much time as we can with our kids is the most important thing to us.
This site has made a significant difference in our finances since I stumbled upon it about 10 years ago. Would not be where we are without the wisdom of many on this board.
They are accepting offers until noon tomorrow. I will update.
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Re: Would you buy a house for 615k if you were us?
I would do it. If you’re saving $72k currently but expect expenses to go up $32k with this purchase but are also expecting a raise of $15k to somewhat offset that, you’d still be saving $55k. That is a still a very good savings rate on your income. By the way, the portion of the payment that would go toward principal is also a form of savings as it increases your net worth.
There are lots of factors in your favor. You said your income is very stable, you can put a 20% down payment on the house, and current mortgage rates - while having increased quite a bit recently - are still around the average historical rate. There is also the possibility that interest rates could go down and you could refinance at some point. Even if that doesn’t happen, with a fixed rate mortgage, inflation over time will make the payment effectively smaller and smaller.
The fact that you already have $640k saved by your mid-30s is also a very big deal due to the power of compound interest. If you plan to work for another 22 years, saving $55k per year would results in $3m by the time you’re 57 assuming just a 3% growth rate. There are also pensions and social security in your future.
If you don’t have intentions to retire early (say, before the next 20 years or so), then buy the house and enjoy living in it. Keep a healthy emergency fund, of course.
By the way, if you’re so inclined, you can reduce other expenses as well. $21k per year on groceries and eating out is sort of a lot and maybe you could find a little savings there. You could consider public schools since you said the home would be located in an area with “excellent public schools” (full disclosure: I’m a public school teacher). You could also look into scaling back on the vacation budget a bit (consider opening new credit card accounts for travel bonuses/miles if you’re not doing this already and maybe keep travel plans low-key while the kids are young anyway).
I personally think it’s good to find a healthy balance between enjoying life in the present while saving prudently for the future. To me, this purchase seems reasonable given your situation.
There are lots of factors in your favor. You said your income is very stable, you can put a 20% down payment on the house, and current mortgage rates - while having increased quite a bit recently - are still around the average historical rate. There is also the possibility that interest rates could go down and you could refinance at some point. Even if that doesn’t happen, with a fixed rate mortgage, inflation over time will make the payment effectively smaller and smaller.
The fact that you already have $640k saved by your mid-30s is also a very big deal due to the power of compound interest. If you plan to work for another 22 years, saving $55k per year would results in $3m by the time you’re 57 assuming just a 3% growth rate. There are also pensions and social security in your future.
If you don’t have intentions to retire early (say, before the next 20 years or so), then buy the house and enjoy living in it. Keep a healthy emergency fund, of course.
By the way, if you’re so inclined, you can reduce other expenses as well. $21k per year on groceries and eating out is sort of a lot and maybe you could find a little savings there. You could consider public schools since you said the home would be located in an area with “excellent public schools” (full disclosure: I’m a public school teacher). You could also look into scaling back on the vacation budget a bit (consider opening new credit card accounts for travel bonuses/miles if you’re not doing this already and maybe keep travel plans low-key while the kids are young anyway).
I personally think it’s good to find a healthy balance between enjoying life in the present while saving prudently for the future. To me, this purchase seems reasonable given your situation.
Re: Would you buy a house for 615k if you were us?
Fascinating the number of conservative responses in this thread. I wouldn't have thought much about buying a 615k house on a 200k combined salary.
I've been referring to this article as a general rule of thumb to help gauge our home affordability range: https://www.financialsamurai.com/income ... ce-points/
We are in a very similar situation as you, slightly younger, currently in the hunt for a house in the 700 - 750k range. Our salary is not much higher at 225k combined. Our current house is worth ~620k and we have approximately 300k in equity - I'm conservatively estimating that we'll have 220k in net proceeds from our home sale. Only difference is that we're planning on putting down 20% that we already have saved, then rolling our current home equity in to the new mortgage after we sell our current home, meaning we'll have anywhere from $370k - $400k in equity on the new house. This will help make the new monthly payment much more manageable.
I've been referring to this article as a general rule of thumb to help gauge our home affordability range: https://www.financialsamurai.com/income ... ce-points/
We are in a very similar situation as you, slightly younger, currently in the hunt for a house in the 700 - 750k range. Our salary is not much higher at 225k combined. Our current house is worth ~620k and we have approximately 300k in equity - I'm conservatively estimating that we'll have 220k in net proceeds from our home sale. Only difference is that we're planning on putting down 20% that we already have saved, then rolling our current home equity in to the new mortgage after we sell our current home, meaning we'll have anywhere from $370k - $400k in equity on the new house. This will help make the new monthly payment much more manageable.
Re: Would you buy a house for 615k if you were us?
Would you buy a $615K house on a $150K salary?
That is the math I did when I read they may be sending 3 kids to private school at $10K/child. I think that is being overlooked here
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Re: Would you buy a house for 615k if you were us?
My response to the question would have been much different a few years ago, when mortgage rates were half what they are today. Also, OP asked "would YOU buy a house at 615k if you were us"? We're in a similar family situation (but better financial situation) and IMO this home upgrade is clearly a want (the current home sounds like it meets their needs fine - it's bigger than ours) that we wouldn't feel comfortable stretching for.
Technically, OP can absolutely afford it, but we wouldn't do it.