Author Topic: Another Housing Question!  (Read 450 times)

royals4706

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Another Housing Question!
« on: April 03, 2019, 12:04:33 PM »
What: A. How much to put into housing (Down payment size, 30 yr vs 15 yr.)
B. What to do with savings plan until that point (Max out my 401k in addition to hers, currently contributing to get the match at my company, cut our HSA contribution to $0)
Why: We would want her to stay home, or have the *Ability* to stay home and not rely on her income for housing payment purposes.
When: Summer 2020
Where: Northeastern USA (S. Jersey/Long Island). For arguments sake let’s say the property taxes will be around $14k/year.

Age: 27 (Both)

Gross Salary:
Total: $136.9k (Mine: $80k Hers: $56.9k) Potential Bonus/Extra Income: $3-8k

Debt:
Only Debt is Car Debt ($7.1k at “0.0%” int) ~$240/mo.

Retirement:
Roth IRA Total: $25.2k  (Mine $14.3k, Hers 9.0k)
Pre-Tax Total: $98.9k(Mine $85.2k Hers $13.6k)
HSA Total: $6k

Current Contributions:
PreTax (Mine): 3% Match + 6% Automatic Company Contribution
Pre-Tax (Hers): Full Contribution for $19k max for 2019.
HSA: Put down to $0 to focus on savings.
Roth IRA (Both): Plan to max out for 2019.
ESPP: 10% of Gross Salary. Planning to sell the purchased stock every 6 mos. after purchase.

Savings:
Liquid Savings (High Yield Savings Account): ~$205,000
Expected Liquid Savings (Conservatively):    ~$231,500 Conservatively (Could fluctuate add’l +$7k)
(Expected Savings are for 1 Yr From Now Based on Current Savings & Income)

frugaldrummer

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Re: Another Housing Question!
« Reply #1 on: April 05, 2019, 08:44:32 AM »
What's the estimated price range of a home you would buy? And how much is comparable rent. What are your long term plans?

ixtap

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Re: Another Housing Question!
« Reply #2 on: April 05, 2019, 08:52:49 AM »
As little as possible to be comfortable. Have you run a rent/buy calculator for your area?

With an average 2% property rate in that area, you seem to be looking at $700k of house on <$100k salary? That does not seem the way to allowing one parent to stay home.

cincystache

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Re: Another Housing Question!
« Reply #3 on: April 06, 2019, 08:27:10 PM »
Here is the calculator referenced above: https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html

Don't buy a house where you're paying 14k per year in property taxes on an 80k gross household income. That makes absolutely no sense.

Assuming your purchase price is 700k and you put down 200k here is your approximate monthly housing costs with a 30 yr mortgage

Principal, Interest = 2,500
Taxes = 1,166
Insurance= 150?
TOTAL = 3,816


That represents a massive percentage of your take home pay, well over 50%, closer to 70%. This would make you house poor, banks shouldn't even loan you the money.

Move to a different state or an area with more reasonable property values and tax rates.

Abe

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Re: Another Housing Question!
« Reply #4 on: April 06, 2019, 09:26:13 PM »
I agree with the others. You don't make enough to buy that expensive of a house. Paying 10% of your gross salary in just real estate taxes is a huge risk. There is no reason to think that the tax would ever go down. Even if the bank gives you a mortgage, you shouldn't take it.  Consider renting in a cheaper part of whichever town you are looking at.