{ "media_type": "text", "post_content": "Is it a stretch to buy a $900k house with about $180k income? The conventional metrics would say yes, but our budget works. We figured about $4000/m for PITI, $3000 for non-housing expenses, and $2000 for savings/investing. No debt and $50k in savings. We have about $200k for the down payment. Am I missing anything here or is this actually doable?", "post_id": "61ddd71460f6d50031073bde", "reply_count": 178, "vote_count": 21, "bowl_id": "59064a3cb12379001006592c", "bowl_name": "Personal Investment Chatter", "feed_type": "bowl" }

Is it a stretch to buy a $900k house with about $180k income? The conventional metrics would say yes, but our budget works. We figured about $4000/m for PITI, $3000 for non-housing expenses, and $2000 for savings/investing. No debt and $50k in savings. We have about $200k for the down payment. Am I missing anything here or is this actually doable?

likefunnysmart
Posting as :
works at
You are currently posting as works at
Highlighted IconHIGHLIGHTED

Im looking for a house at the moment. Our HHI is about 325k and we're about to have our first child. We're in the NYC metro area. Im thinking 600k is our max mortgage loan and that will significantly reduce how much saving/investment income we have + cash to enjoy. My ideal situation is a place that we can get cheaper and improve. The way I think about it is our monthly income is a pie - how much of that pie do I want to be an inflexible commitment to a home vs. how much is funds with optionality. I prefer to have more optionality because it helps to create stability. Life's crazy and you never know if it's a disaster around the corner or an opportunity. Another thing that informs my view is that my family immigrated to the US when I was a young child with nothing and then made a very decent life for themselves, so I've been able to experience varying levels of lifestyle and wealth. It's not fun to worry about paying the bills just to be able to have basic things, and it's equally not fun to seem like you're living well in a big house with a fancy car while worrying about how to pay your bills.

like

You are switching form $2900 (rent) to $4000 (mortgage). A new home comes with increased utilities and repair cost. In total, I see an additional commitment of $1,500/month here. And that might be close to 1/3rd of your current income after all essentials… significant number for few, and manageable for others! Depending on your personality, you may feel it a little tight for the first couple of year and settle down with time. It is definitely financially doable. If I apply your numbers to my personality, I will stay around $3,250/month kind of mortgage so the impact on cash flow is not significantly different from the rent that you are already paying. My take to decide a right level of mortgage exposure: 1. Don’t assume any significant upward change in your income for the next 5 years. If it happens, a bonus. 2. Make sure that the home will serve your needs for at-least the next 5 year. A home transaction cost 10%. And, you will lose all your equity benefit if selling before that. 3. Consider all significant milestone in the near future that will change your housing need (marriage/kids) or negativity impact the income (spouse taking break etc.).

like

Fair enough. My fault.

Recent IconRecent

That’s way too expensive, if 180k is HHI. Yes, it is a stretch and would break you. Where are you looking to buy? If MCOL or LCOL, 500-600k will get a good house. Pay 20% downpayment and invest the rest.

likefunny

Since it is a “stretch”, what about the house is a priorty for you that puts it in the $900k range? The size of the interior? Configuration in number of bedrooms, Rec room. Entertaining space? Close-in location? Large yard for pets, kids play, parties? Consider whether those priorities save time and money or cost time and money when deciding whether the “stretch” makes sense. Being close to work and your activities saves time and money getting around. Large interior spaces are a money and time drain - more space, more stuff, more upkeep, etc. Land and location hold value while construction requires continued investment to maintain value. While it’s great to lock in a low interest mortgage, house prices are always higher and subject to losing value when mortgage rates get higher. High interest, house prices will be lower. With as much cash as you have, it make work better for you to wait a bit. The inflation caused by demand fueled by low interest rates will level out once interest rates rise. $50,000 emergency fund is good for fixing things but may be light for weathering periods of unemployment.

likeuplifting

I make $150 and bought a $250k house and think it's too expensive.

likefunny

Was the house 3-4k sqft? Trying to understand the high utility bill. I spend 600 month on propane in winter and 250 a month on electricity in summer in CA mountains for 2200 sqfr

Most ppl here is reading it as $180k total income and $900k mortgage, but in reality it's $180k base & $700k mortgage. It's risky, but doable. Be prepared to wait/let go of pleasure items, be it a vacation or upgrades. Some ppl totally enjoy the homeownership, decorating, inviting ppl, partying. If you are one of those happy & proud homeowner and will have fun with this investment, totally go for it. Life is short & live it the way what makes you happy. You'll be fine

likehelpful

Have you guys made any big purchase in your life like what the OP is trying to do? I've, more than once and I think he will do fine. If you have valid points to add, why he should or he shouldn't be going for his decision, Please do. Otherwise these comments are unnecessary and discouraging for someone who is genuinely trying to make a investment decision. Parties doesn't have to be fancy, it's all about the company & having fun with your friends.

likehelpful

Well now that we’ve reached the 100 comment mark, I want to thank everyone for taking the time to give advice and perspectives. Although I still think this is doable, we’ve decided to keep our mortgage amount below $600k, which we are pretty comfortable with.

like

Some people forget that after buying the house, you also have to maintain it. Meaning, set aside some money for unexpected fixes and maintenance for the house. It's not cheap.

like

Definitely going to be house poor and at risk of being screwed if there's ever a multi-year recession. Live below your means and don't count on house appreciation for your retirement 2K/mo, I'm hoping that is post maxing out retirement accounts, still though, should be higher if you can afford it

like

I’m at 300k, recently bought 700k house with 20% down and am starting to feel the stretch (PITI about 4k/mo plus I throw in an extra 500 each month). For me it’s bc I bought an older house that has already required an additional 50k in improvements (despite inspection and negotiating during buying process). I’m hoping after all of these things are identified and paid for, it won’t feel like such a stretch, but who knows what will need to be fixed next. I have definitely had to cut back on discretionary spending till I get all this paid for.

likehelpfulsmart

What’s your loan rate? The $500 month extra will probably be more useful from peace of mind utility helping fund your maintenance.

like

@OP. Take everything here with a grain of salt. I am in a very similar situation to you. My TC was 180k last year, and I bought a house last June for $860k with a loan amount of $602k. I have also budgeted $3000 for non-housing expenses. One difference is that I had a bit more in savings. I also anticipate some salary growth moving forward. It feels like I have to be a little bit more careful with money, but it's not as crazy as some are making it out to be, especially if you're confident about that $3000/month AVERAGE budget (remember to account for repairs, increased utility cost in winter, expensive holiday months, and travel). Some might consider my spending habits to be those of a "house poor" person, but I'd much rather be building home equity than spending it on a nicer car, fancy dinners, or extravagant gifts. My reassurance came from making a spreadsheet with all of my expected spending including large costs (e.g. wedding, kid's education, cars) for the next 30+ years in order to get an idea of what the path to retirement looks like. Highly recommend.

likehelpfuluplifting

@senior associate 1- Point taken. I’ve lived that way for a few years now as well. Time to think about building the right life for my kids.

How is PITI on a $900k home only $4k/month??? I gotta get out of Jersey.

like

$4515 here in Colorado for our $1.175M home with 20% down. Will likely increase a few hundred when property taxes adjust to reflect the sale

$2k month for savings/investing does not equate to maxing out retirement, especially for 2 people. My husband and I had $240k HHI in LA with 3 young kids and our rent was $3,900 per month and we struggled A LOT. We couldn’t max out retirement, couldn’t go on a nice vacation. It was like we were living paycheck to paycheck except we had an emergency fund and invested some in 401k. I would not recommended it. I would take another look at your budget and make sure you’re looking at net pay after taxes and insurance deductions. Also a lot of estimators use the US average for property taxes instead of basing it on the county the house in.

like

I said this on a different thread, but I would run some projections with different interest rates, they’re almost certainly going up and it may counter your additional savings. If you are comfortable with it, rent a room / section out and that can really make a big difference to bridging the first few years where it will be a stretch.

Call Dave Ramsey. Short answer, Jesus please do not. I'd be up all night worried about you, seriously.

likehelpful

Property leverage and equity is the biggest middle class level for upward mobility in this country. Surely why many of this threads contributors are also landlords. Have someone else service the debt while the asset appreciated. Housing stock will be perpetually short in most of the country leading to appreciation over a 10 year window. Inflation in a levered environment will whittle that debt down. Even quicker if the loan is fixed / hedged.

like

Financial stress can be pretty rough. Is $180k your base or does that include bonus and stock? Also, are you single income? If it’s base and you can really put down 200k, then it might be doable. Your salary should only go up from now and I’m guessing rent if HCOL is prob in the 3000s.

like

$180K single earner ? No way. You lose your job for any reason and you’re done. $650K is more in line. We make $550K HHI and $1M still seems steep some days. But I also like having cash for investments and any alternative investment opportunities that come my way.

like

“550 HHI and 1 mil seems steep some days”. Cry me a river. On paper you could pay off your home in 5 years

funny

I assume you don't have kids or plan on having them anytime soon. Infant daycare is >$3000/mo th. Toddler care is about $2500.

like

Very fair question as many of the online calculators are misleading and mortgage brokers will over extend you. Our HHI is the same when I’m not working (freelance / on maternity leave now), maybe slightly more depending on my husbands bonus. We made $350k HHI before I left full time. We’re looking to upsize from our current house which is worth $460k / 3000sq ft / MCOL. We also have $200k in equity + cash for down payment and are looking at max $750k homes, for context. I have no idea how you could maintain $3k in non housing expenses with kids, furnishing a new home, inflation, etc. - were $4k/mo minimum and pretty tight on discretionary spending. We’ve spent at least $4-8k a year on larger home maintenance items and repairs. Definitely something to plan for! Also purely the risk as a single income household makes me nervous with the pandemic and market swings.

like

If you need a jumbo mortgage you are buying too much house.

like

I guess you font live near any major city.

like

You could pull it off but it would be tight. A general (definitely a lot of exceptions) rule of thumb I've found is 3x income super comfortable, 4x income good sweet spot, 5x income doable but definitely stretching. Good luck! It's tough out there.

like

ECP1, this is gold. I like it. Could you answer the questions posed above. It will help us because you are a shining rod here.

Bought a $670k house with $90k income with 20% down 5 years ago (spouse was still in school). Also in NOVA and I think it's doable. But I did not have kids back then and kids can be a little different.

like

Everyone manages their finances differently. It also depends on your lifestyle, kids and how long are you planning to live in that home. I would say if you are going to spend rest of your life their and family likes the home, go for it. Considering current real estate market home prices ain’t coming down for 1-2 year.

like

Bro you’re going to be extremely house poor. Don’t do it

like

Related Posts

How do you calculate what tax bracket you will be at when you retire? Keep reading choose the option based of what tax bracket you will be at retirement but I literally have no clue

like

Would be nice if we can pledge to retire the word “circle back” from our vocabulary. Lets just say “I will get back to you” how about that?

likefunny

What kind of benefits does your company? How many weeks of vacation did you start at? Sick time ?

likesmart

I normally don’t blame creatives for TERRIBLE work. It’s usually not their fault. But these Capital One spots... I just can’t anymore. Whoever is responsible for these atrocities please just retire. 🤮

likefunny

Do you contribute to both a traditional 401k and a Roth 401k? Do you also contribute to traditional or Roth IRA? How are you maximizing contributions with tax diversification considerations?

like

I don’t want to be a teacher anymore. The only thing that pulls me back is the kids, but I spend my time crying and have developed issues mentally and physically from stress. I worked hard for my teaching degree. But I just feel like I can’t do this anymore. What should I do? What would you do?

likesmarthelpful

How are the L3Harris benefits? I read something about unlimited PTO, but in reality it’s like 4 weeks. How’s the 401k match? Is it common to have a 9/80 schedule? I was contacted by a recruiter on LinkedIn...hence all the questions. :-)

like

when switching jobs how do you decide if you should roll your old 401k into your new one, leave it, or roll it into IRAs?

like

Currently I put 10% in my Roth 401k. In January, I will have an HSA account. I am thinking of dropping my 401k to 8% and redirecting the 2% plus an additional 2.5% to my HSA. This will my my total investment contributions 12.5%. Reasoning being to lower current taxable income (allows to take full student loan deduction and more cash) and I will have medical expenses when I retire so why does it matter what account it comes from as long as they’re growing relatively same rate. Thoughts?

like
like

Does Accenture offer in-service withdrawals if I want to contribute after-tax to 401k and rollover to Roth IRA? Or should I just contribute to taxable brokerage after maxing 401K & Roth IRA?

Rookie question - i had a vanguard 401k with my old firm and now have a different one with my new firm. What happens to my old 401k? Does it get merged with my new one?? How does 401k’s work when u move from one firm to another

like

What would be the best strategy to invest about 40k? I am already on track to max out my 401k & Roth IRA for the year and have about 4 months emergency fund. So looking for tips on how to diversify.

like

Deloitte - do you receive 401k match if you resign before 6/30? Thanks!

like

$92k salary, max out 401k, and minimal investments being divested this year - what is the best allowance to put on my tax form so that I don't have to pay taxes come spring of 2020?

Leaving Financial Services audit role after 4 years, have a few questions for anyone who has gone thru this process - How does the whole handing in your laptop process go down these days? - Any advice on who I should first communicate this news to? (PML/counselor, Partner, HR) - Any advice on things I should look to do during my last 2 weeks with the firm? (i.e. CPE credits - How is 401k account handled? Should I reach out to someone at my investment advisor, or will I be contacted by someone?

like

Thinking of moving to pwc, what is the wealth builder? Like why dont they just use a traditional 401k? What are important facts about it?

like

I am stupid but trying to start investing - do I just keep buying SPY/ETFs and forget about it until I retire? I just transferred my savings to fidelity but am scared to make first transaction😭

likefunny

Does your time on leave count towards your tenure for purposes of signing bonuses, pension, etc?

like

Additional Posts

How great would office emojis be in this app?

like

Beyond 2 lines the text in each post card is cut off. I wonder how many lines in the comment section?

like

I used to read 2 books a month. Work out 3 days a week. Hike, play in an IM soccer team, socialize with friends and have enough energy for a 10 min call with my mom on Sundays. Than I got this job.

like

What is everyone’s rule-of-thumb on meeting invites: Does the senior person call the junior person (i.e. consulting employee calls on-campus recruit)? Or vice versa)? Vote below

like

Booked a room under another company’s rate and got an email a few days before from “Rooms Control” telling me that I need to have proof of current employment available at check-in. Is Marriott starting to crack down on rate codes or was this just circumstantial? Been doing this for years without issue.

likefunny
likefunny

Hi Folks, I have offers from 3 companies for Senior Data Engineer role and need your suggestions which I should join. 1. Deloitte offering 130K plus benefits, 6% 401K match, 10K joining bonus, they are assigning me to PDM track with long term project. 2. SS&C is offering 145K plus benefits, 6% 401K match. 3. Hoverstate is a small company offering 140k plus benefits plus 5% bonus end of year. All positions are remote.

like

I just got on a project that requires me to be remote. I feel like this is will limit my impact and stunt my career growth and I'm looking for Senior this year. Any advice? Can I avoid the project?

Has anyone gone from Transaction Advisory (Think B4 M&A) to mgmt consulting?

like

Wow so generous of our MD to give our team such a generous Go Live Thank you gift! The fact that he’d risk getting caught by the hotel staff for stealing the hot chocolate and coffee from the lobby for us means so much!

Post Photo
funnylike

I got put onto a DD on a Latam company but nobody on my team knows Spanish. It's not a simple matter of just pulling data either; there are actual documents to sift through and they're all in Spanish. Also they never mentioned that this job would have international work nor did they mention any foreign language requirements, which seem like crucial details to omit in a job description because I would've reconsidered this job had I known. Wouldn't that be grounds for a lawsuit?

funnylike

Too bold to ask my PM, if I can go to the gym for an hour during the middle of the day if there are no meetings? My one concern is any ad hoc client requests. Was also thinking of setting an hour on my calendar, but “in a meeting” will quicklly become “away” if I’m not on my computer

like

Opportunity to move to BCG new Cyber practice. Getting SC in August. Live in MD on federal project, but would have to travel 80% at BCG.... Is it worth the move?

like

Do you guys feel once you are in Big4 its hard to move out and get other jobs? Currently in Data but don’t feel like I have been approached by recruiters as much. 3 years into the firm. Thoughts?

like

Just started at Accenture on Jan 8 and an oracle technical integration specialist level 9. How long are people typically on the bench for? Also, what is the best process for finding a project?

like

Is there anything better than chick fil a

like

I know there are a lot of opinions on this: would you visit family for the holidays this year? Especially in a state that has higher cases?

like

Best companies for cyber security?

like

Hello everyone. I’ve a burning question. So I have only spent 6 months at KPMG but I recently received on offer from another firm and they are offering me a pay that is $25,000 more than what I earn at KPMG and a sign on Bonus of $10,000. Any advise on how to approach this?

like

For my coloradans, what next car should I buy that can hopefully last me 200-300k miles, and our winters (especially I-70)?

like

New to Fishbowl?

Download the Fishbowl app to
unlock all discussions on Fishbowl.
Download Fishbowl to see what others are saying
That was just a preview…
Sign Up to see all discussions
  • Discover what it’s like to work at companies from real professionals
  • Get candid advice from people in your field in a safe space
  • Chat and network with other professionals in your field
Sign up in seconds to unlock all discussions on Fishbowl.

Already a user?
Login here

Share

Embed this post

Copy and paste embed code on your site

Preview

Download the Fishbowl app

Get realtime notifications and see
what's happening in your industry
from the palm of your hand.

For account settings, visit Fishbowl on Desktop Browser or

General

Legal