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How long it take for L1 round in Capgemini.
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Seems a little tight right now, but if you can afford it for 6 to 18 months and then refi at a lower rate, it will get much more comfortable.
This is the goal!
I’m in a very similar situation w/ a monthly mortgage that’s about $6700 a month. It’s definitely tight, but we are making it work due to a forecasted growth in income and we needed more space with a kid.
I don’t think $8700 would be impossible, but it probably would mean not contributing to retirement until our income catches up. Right now, we are managing to save about $1600 a month so that is the difference.
If it’s your dream and you feel confident in your income growing, it’s probably worth being house poor for 2-3 years. We love our house, plan to stay in it for at least 5-10 years, and can stay even longer if needed. Just know you’ll definitely be house poor for a little.
Per paycheck*
Mentor
I think that whatever anyone else thinks it’s too late because you are already closing.
Fair
What do you do?
Totally do it. Your salary is hopefully only going up and the whole 3x your salary house cost doesn’t apply anymore. You’ll be tight for a year but will recover and you can refinance. Love your best life!
You’ll totally be fine. We have been there done that
Your risks are offset, you’re killing it. I like your approach, coming from a guy that picks apart bad ideas/plans all day. Congrats! You should be giving us advice 😂 pay attention folks. High mortgage payment/single income offset with emergency fund. Higher priced home has higher chance of more severe correction in price, but his timeline is long for staying put. His appreciation and leveraged investment is likely to be a winner. My next move after this was paid cash for a modest home with my equity. No risk. Im now buying about 1 home a year and thinking about multi-family.
Very similar situation, about $550-600k in income and looking at homes closer to $1.6-$1.7m in westchester. Both wife and I work so we incur significant full time childcare costs as well. In the end, it’s going to be tight, so we are considering just playing it safe and renting for now. I think if you’re confident about the area and have the ability to control expenses you should go for it! We just aren’t comfortable yet for a variety of reasons.
Are you the only household income? Because 250 is only like $12k net per month (maxing out retirement) with 66% going towards housing?
Agreed. First year will be tight. It’s about 60% of take-home pay. But still leaves over $5k for other expenses which works for us. Also the annual bonus will help in year two to provide more of a cushion. If I only had 250 base and no bonus I wouldn’t have made the decision to do this.
House poor
Coach
You can I guess, but we obviously know you disagree with this post because you made a different choice. So no need to write that you disagree.
Very reasonable plan. Go for it. Folks buying cheaper homes in M/LCOL will never understand this. In California you get townhomes with this price and people are buying it with half your income. You are in great financial shape
I’m from CA and this is about what I’ve been seeing from friends who just bought recently… it’s wild to me that this is the new normal for us millennials buying homes for our family now.
OP how did this work out?
So far so good! We love the house.
Do you have kids and how many? That can make a big difference.
One right now but would like at least 2
Seems tight. What is your monthly take home? And avg monthly expenses?
I think you have already got it figured out and made up your mind. Few years back I was making $400-$500k and opted for a $1M house with a $400k mortgage, bc we are a one income household and I didn’t want to risk it if I lost my job. I guess I just have a lower risk tolerance.
Coach
You’re basically financing that entire emergency fund for 6.3% and spending a thousand or so extra dollars per month to do it.
Go ahead and do the math on how much money you save monthly and yearly if you used it on a down payment instead. Over the course of a loan, that withholding that much down payment could cost you *hundreds of thousands of dollars*
Yea but who wants to lock all their money up in home equity which is very illiquid? I’ve seen you post this before EP. Get out of here. No one is going to put 100% of savings towards downpayment…
High mortgage with that comp. If comp has opportunity to scale though soon it’ll be more manageable
That’s the goal. Need to roll the dice in life sometimes to get what you want.
I had no other debt, make $500k, and felt uncomfortable buying a $900k home at 2.75% 😱
Seems we all have different comfort levels
Perhaps risk aversion is the wrong term. More that I didn’t want to tie that much money up in a home and have the luxury of living in a city where we can still get a nice home.
I’m leveraged in real estate investments elsewhere, but generally also risk averse and CF positive
If you are already closing how does it matter? You already made up your mind. How much will you save/put towards retirement after the house purchase? What is that as a % of your income? Bonus is relatively guaranteed? Kids? Savings for kids?
I just wanted peoples thoughts on the decision I have clearly already made. That’s all.
About $1500/paycheck and $3k per month toward retirement with the company match.
Bonus is definitely not guaranteed but past 4 years has been $70k+
1 kid. Hoping for more.
Shop around please. You’re getting a bad rate. I just got a 5.75% refinance at no costs. New homes can do better
My ltv is at 80%. I used leader bank
Question: what are your property taxes? How much do you expect to spend on maintenance? This can be significant as well.