We're hoping to start a family in 2019 which prompts us to want to live in a nicer place and community than we currently do (we've tended to err on the side of budget friendly over amenities). Rents for a slightly upgraded home run roughly [$500 less to the same price] as what a mortgage payment would be. Personally, I'm dealing with some home sickness being away from family the last couple of years since moving to the Bay. We both come from another HCOL area that is just not ideal for our careers, so I need to come to terms with the idea that living near my family isn't feasible. I anticipate it to be highly probable that we stay in whatever home we purchase for at least 5 years. Another consideration is the real possibility of losing all or part of my income to stay at home with the kid(s). I don't think I would be able to stay home sanely as a full time parent for very long, so I don't know if I should plan for this regardless of my current feelings. Losing my income entirely would leave an estimated ~$1.5-2k left over for other expenses after the mortgage+tax payment.
Assuming we were able to pay down our current debt and recoup a fair bit of savings, would it be silly for us to get a home in the range we're looking at?
Info on us:
- Husband and I (early 30s) are recently married, dated 7 years
- ~$300k+ combined annual salary, not including stocks
- Maxed 401k (above annual $18,500 with employer contributions)
- Our only debt: $30k on Credit Cards from the wedding (yea... we didn't save for the wedding. Not smart). It's getting paid down pretty quickly (current projections show it to be paid off by December or January 2019)
- Own 2 older vehicles. Will likely replace one of these vehicles when kids happen down the line.
- Emergency fund - Technically Nada. We've never really taken active measures to set aside money for an emergency fund as there's usually a size-able surplus in our accounts (until the wedding)
Housing Stats:
- Current Rent: $2500, in a place we're not really a fan of other than location for ease of commute. Biggest cons include being next to a loud freeway and the unit being minimally updated since it was constructed in the 1960s.
- Down payment: the 20% will almost exclusively come from exercised stock options. *Advice on this is appreciated.* We've been advised that taking the higher capital gains hit (Roughly 8% would not fall under the higher capital gains hit) and using it as a down payment is more valuable than keeping it wrapped up in a single potentially volatile source.
- House Budget: $900k-$1m (A $950k home would equate to a $5100 mortgage & tax payment). We would optimize for good schools with a reasonable-ish commute to San Francisco via Bart (thinking Walnut Creek, Lafayette, Danville, San Ramon). Unfortunately, a $900k-$1m house (if you can get your offer accepted) means you're almost assuredly getting a fixer
- Lender: Currently approved for up to $1.5million+. I've always communicated to the lender that we're not interested in spending more than $1m so I've never been told what the upper bound is other than a quick remark about "$1.5m or more not being an issue". Obviously not going to go anywhere near that upper bound.
Thanks in advance for any advice and/or suggestions!
Submitted October 13, 2018 at 07:07AM by Quick-Question-4u https://ift.tt/2QOlcYt
