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The mortgage industry touts 3x the household income as *acceptable* price for home. Even by their dangerous standard, you're over.
If you're remotely interested in being financially prudent, 2x would be the limit. To me, even that is high. Case in point: our combined income is $260k and we bought home for $280k.
But then again, most Americans (I'm assuming you're in US) buy more home than they need. And confirmation bias exists to make the rationalizing easier.
Detroit area, but it does not matter which metro area I am from, does it? The very fact that you're asking the question here tells us that you are looking for some kind of group think to validate a choice you've most probably made 😀
You do you. Not here to judge. Cheers!
What is your monthly income. I would suggest a much lower amount if you are trying to FIRE. For perspective bought my house at 300K put 20% down so financed 240k at 15 years @ 2.75% when my salary was was about 120K.
Combined HH base salary is 300k-320k since both of us work. House is 1.1MM, looking to put down 20% for 30 years
I would do whatever payment comes out to be 25% of take home pay. that way you have plenty of room for other bills/purchases and have a good emergency fund in case someone loses their job. 15year mortgage also. I'd rather be financially stable though.
not 25% but I understand it's close and ultimately your decision! 😊
The house is a little over 3 times the combined base income of my partner and I. If we include bonus a little lower.
Monthly all in would be about 50% higher than current rent, but a large share of the mortgage payment would go toward principal, and not to mention the tax deduction benefit, even if just little.
What is your target liquid assets number to retire at? How fast do you hit it with this house vs something else? Is that acceptable to you? It is all about your financial goals and your acceptable quality of life. If FIRE says 3x is too much but the NYC doesn't allow you to live the way you want to at a lower multiple then 3x is your number. Especially with market variance, the guidance is just guidance. You can look to balance happiness now vs early retirement and math out the options.
Depending on the state/city, property taxes will be a big part of your monthly payment. For example, a $1.2 million house in Rye, Ny might have a property tax bill of $35k while a similarly priced home in nearby Greenwich, ct can be under $10k.
Your total house should not be more than 30% your income.
read your statement to yourself one more time, then pls fix.
Read up on debt-to-income ratio. That’s what you should be focused on.