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I am petrified. I am scared of the monthly payment, of being in such a massive home, cleaning it, raising kids in it (spoiling them, etc), nervous the economy is going to tank and house prices will fall, etc. On top of that, my parents offered to give us money for the down payment, which I feel extremely guilty for taking, while spouses parents agreed to give the same amount my parents are giving. In total, my contribution (house I bought + my parents) equates to 70% of the down payment and we would split the monthly payments going forward. I’m not sure how to proceed. Am I justified in feeling scared/guilty/uneasy? If I back out, spouse may seriously divorce me; if we move forward I’m scared I’m going to be house poor/riddled with anxiety as I have always lived significantly below my means. I think the price we are getting on the house is legitimately a great deal in a great location and would reduce my spouse’s commute by an hour/hour and a half both ways
Adding- the house is truly unique. We have been casually looking for about 8 months and I’ve looked in the last 5 years if anything remotely similar has sold and it hasn’t. It’s a house that you pass down through generations. In total, we would put down 50%
I feel
You. I am always a believer of live below your means. A house that expensive will also require expensive maintenance. At the same time, it’s a once in a lifetime oppty, good thing about real estate is you can always sell and get ur money back…… maybe always keep a few months of safety net
Just put it into Affordability calculator and looks like you are fine.
Assume $4800 is “debt”.
This is based on 36% Debt-to-Income ratio, 2.5% property tax, and low insurance.
I’d get it!
$1.1M is not that expensive for housing in my opinion.
I’m not in the same life stage as you OP but as someone who grew up in poverty from a 3rd world country and now with a middle class income, I still struggle from allowing myself to purchase necessary items that are expensive (for a reason due to quality or brand) because I’d convince myself that it’s unnecessarily expensive when I can buy myself something cheaper (again for a reason probably due to quality or brand). If I go with the more expensive option, I feel guilty for spending money “unwisely” but when I realized that this item makes me feel good, makes my life better (due to not having to keep buying), etc, my regrets disappear. I think the same can be applied to you OP? but I could be wrong because your situation requires a whole lot of financial commitment. sometimes it’s uncomfortable for us to get out of our comfort zone because we’re so used to being thrifty and staying within our safe zone cause we grew up with financial stress and thus we are always preparing for possible financial hardship. But in this situation, I think it’s important for you to trust yourself and your support system to be able to handle it as you go. Good luck to you all!
The more important questions are:
1. How many months worth of expenses do you have in savings (include severance and pto)?
2. What is the minimum required salary you need to maintain your current monthly expenses?
3. Based on your answer to #2, how confident are you that you could easily find a job paying that much if you were let go from your current job?
4. If you’re not confident at all in #3, you probably need to scale back on spending so that your standard of living aligns with what you’re truly capable of earning.
R u foreal? lol. Ur fine.
Why 50% down? keep some in savings if you're truly worried and refinance later when rates go down.
You should be fine. My spouse and I have about that combined income and are ok
I don’t blame you for feeling this way . Kids are expensive and you will border on feeling house poor . Run the numbers and then decide
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So it looks like the mortgage will be around $550k if you're putting down half on a $1.1mil house. With your combined salaries, you guys should be absolutely fine as long as you don't have poor spending habits. Your daycare costs are definitely on the high side for two kids though. What metropolitan area are you in? NYC? DC? LA? Realistically, for two kids, I can't imagine it being over $3500 even on the higher side.
I live in northern VA and I have to pay $2.4k per kid for a full day 5 days a week so I believe it
It seems like there’s both an emotional and practical element. I like M1’s approach on assessing some of the practical risks. With that said, if all the numbers line up, what are the other issues that need to be resolved? Have you shared the emotional impact of such a big purchase along with your worries to your partner? It’s only fair for your partner to know, since this sounds like a joint effort across both families. I’m sure if they had a similar level of anxiety in another context, you would want to hear them out so you could support them. You don’t have to justify your feelings - they’re important data points to help explore what’s going on for you.
Going back to my logical brain, I would also weigh the financial costs with the value your family derives from having a large home in that particular community (shorter commute for wife, better school district, social hub for friends and family, etc.)
Make sure you have standalone long term disability insurance. What happens if one of you gets sick or loses his or her job?