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Anonymous User
Any Navy Nukes in this bowl?
Additional Posts in FIRE Financial Independence Retire Early
Decided to payoff my mortgage.
Conversation Starter
Vtsax vs fxaix?
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I'm a big fan of buying the smallest house you can possibly get away with. The less you spend on housing, the better. And bigger houses just invite more spending and more clutter. What is the most you're wanting to spend on a house?
Transaction costs and moving expenses are huge, and you are buying a house with leverage. Think it makes sense to go with the biggest house you could afford on one salary, accounting for the possibility you start a family and one parent stays home
Based on your income, conventional financial guidance suggests you could afford a home priced up to $3M.
That said, for someone at your age, I would strongly encourage thinking beyond today’s numbers. Your needs and financial situation are very likely to evolve, like starting a family, potential career breaks to focus on family, childcare and daycare expenses, and even changing dynamics between partners can all significantly impact cash flow and priorities.
With that in mind, it’s prudent to plan for flexibility. Ideally, aim for a home that is well below the maximum you can technically afford, so your lifestyle remains resilient as circumstances change.
This is the FIRE bowl. We’re not going for affordability.
For purposes of value retention, I'd probably focus on a so-so house in the best possible neighborhood.
Buy something cheap, yet accommodating for future plans, and with a tranquil setting so that you don’t have to deal with craziness on top of having a busy job. Pay it down quickly to minimize interest, and invest all the money you’ll save from a crazy mortgage, interest, and property tax into stable investments. That way you’ll make even more money, instead of endlessly paying down a high mortgage and taxes for decades.
Subject Expert
Think about what you need (really need) and about your highest priority wants.
Look for the cheapest houses that meet your needs.
Then look for some that start meeting more of the wants.
How much more would it cost?
Project how much it would change your time to FI in an average case.
Once you are looking at the two houses and know what you will get in exchange for how much extra money and how it will affect your plan, you will be in a great position to think about which option to pursue.
For reference - our HHI is $385k and we bought a $1.4m house. We were fortunate to have generous parents that helped with the downpayment to make our monthly mortgage payment more reasonable. Otherwise,
we would feel a little stretched.
Have you thought about asking a financial advisor? There are so many things that you have to take into consideration when buying a home. This sounds like it is an exciting time for you though!
Try to stay under $2M
$1m HHI in HCOL here and we bought a $1.15m house