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GME and AMC are not doing well today 😂
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Agree with MD1 above and have a different view than most others. Finding a house that could work for your family for a long time (possibly permanently) in a HCOL area is hard and can be worth the stretch, but you need to understand the risks. When I was about 32, my wife and I (pre-kids) did a similar stretch. Stopped 401-K match for over a year to quickly rebuild our liquidity, but got a great asset as a result. I am a big fan of liquidity, so might even consider the lower DP / higher rate until you build your savings back. Or maybe see if you can open a HELOC on the other property (probably after the main purchase) so that you could more easily tap that liquidity as a backup. Or do both. I you have a budget and some extra savings per month and think you can do this, I think you probably can, but spend the first year conserving as much as possible to rebuild liquidity.
Hope its helpful. I have been there, went aggressive and no regrets. Of course, every situation is different. Even with the kid, if you buckle down, you can probably rebuild liquidity to get safe again.
First time buyers do not need to put down 20% right now. There are programs that you could tap into and do less, but that would affect your monthly payment. I also do not think that rates will stay where they are for the next several years, so hopefully you could refi at a lower rate (but don't bet on that). Sometimes you have to roll the dice, and I prefer to do this with primary real estate rather than some other investment. I do not think the housing market will crash, but it may come down in the short term a bit. Just be prepared and don't think you can time it. Also remember that repairs and maintenance on a $1M home are expensive, so be prepared, especially if it is an older home. Is your wife going to keep working after the baby is born?
Deloitte partner here and don’t have time to read all the way through. If your path at Deloitte is to get to P/P/MD, then I’d do it
Rule of thumb, mortgage <= 35% of Net monthly income take home pay
I think you’re overshooting by like $500K.
Thanks SM1, I reckon you’re suggesting that I try and stick to the 25% thumb rule? Yes, that’s going to be hard, given the current market/rates, besides the fact that we live in a HCOL area. I’m trying to see if we can achieve a 40% threshold, and hopefully can try and make that work.
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We’re at about the same HHI, 6k in per month housing costs, some debt (student loans, car, the standard good stuff), and it’s sometimes a struggle. Especially when we want to vacation. Note that we do max out 401k and IRA contributions, and healthcare payflex. So if you weren’t contributing 58k/yr to those things it is a big difference.
What is hhi?
Household income
Curious to see how you saved for $250k Down payment. We make about the same amount and are in our mid 30s..
Yikes. The interest you'll be paying on a home like that alone is enough to scare me away. Can't find a reasonable home for 900k? Where do you live?
DO NOT BUY THAT HOUSE RIGHT NOW. Wait until '23 either goes to hell, or doesn't. There will always be other great homes for sale, but there are not usually cliffs to fall off.