Wife and I make about $150,000 a year. Apart from a mortgage the only debt we have is a truck payment which we could pay off now if we wanted but the interest is just so low it doesn't make sense. At any rate, we are going to do a new build - with interest rates as low as they are we are content with doing this. We are really stretching for what we want and extending our mortgage payment significantly. We are strict budgeters and adhere to our budgets well. I like to plan for the worst but realize a better situation, so I am projecting our mortgage payment between $3,600 and $3,700 a year (trying to just assume the new build is pricier and interest/taxes/insurance are also pricier than what is likely). Our take home is about $10,000 a month. With this mortgage payment and if we are the least bit careful about our budget and even with the truck payment and after all recurring monthly expenses I am calculating that we would have about $1,200 to $1,300 a month left over to basically do whatever we want with (invest, save it, vacation, what have you). We are a family of 4 and my budget includes $1,800 a month for kids preschool - I really think I have thought of it all. The house will be a very long term move, like 20 years plus and the value stands to go up if we ever want to sell, very safe neighborhood in a growing area. My job has great upward trajectory and hers is secure as well. Some percentages and info you may find useful are:
This mortgage payment would be about 28% of gross monthly and 35% of net take home.
Total DTI including the truck would be 32%.
Gross $150k or so a year, very debt averse, no student loans, no credit card debt, only a truck loan.
Preparing for the idea that our new build could cost about $650,000 and we would put 15% down and have considered that interest rates could be in the 4% range when we close.
We would have about $35k in emergency savings when we move in and after making down payment.
Obviously the big concern is being house poor. I think we would use the excess funds each month to max out a Roth, we already contribute to 401ks but apart from that don't really invest or anything. Is this worth doing to be somewhat house poor for 2 or 3 years until a major promotion occurs? Just trying to do a sanity check. Having a great home is really important to us and we are moving out of an old house with potential significant repairs in the near future. Thanks all
Submitted December 02, 2021 at 11:19AM by JohanVonGruberflugen https://ift.tt/32JUcok
