I recently canceled an offer on a home against my wife's wishes. The consequences are still developing.
Income: 200k combined including performance based bonuses. (Pre-tax)
Debts: 70k combined student loans (federal). 16k car loan (5k underwater) at 3% APR. 236k mortgage on a home very recently appraised for 355k at 3.5% APR. 5K in credit card debt at 9% APR.
Savings: no cash, no 401k, no emergency fund, $1000 in stock market. 119k equity in our current home.
Our offer was on an 880k house with a down payment funded by a home equity loan of 85k at 6% over 10 years. We intended to keep the current home as a rental to bring in another $2,000/month. Additionally, my wifes parents offered a verbal agreement of $800/month for a room which was not included in the dti.
The lenders had us qualified at 45% dti including both salaries and prospective rent income. The mortgage payments would have totaled (for both properties) about $6,500/month across 4 different lenders at a weighted average rate of 4.2% APR and a loan total of 1.1 million.
As a first time home buyer (my wife bought the home before we were married), this triggered a major panic after we submitted the offer. The realator (family member) said the market we were in was projected to appreciate 15-20% over the next 6 months and the mortgage broker also thought it was a good investment. We were also expecting this equity growth from both properties.
Did I dodge a bullet? Or just cold feet? My wife is pretty much leaving me over this (no joke) so I am very curious what others have to say.
Edit: Wife's income very recently doubled due to a job change. She currently accounts for 2/3 the income.
Edit: Married less than a year and finally caught up on the wedding expenses. We are both recent college graduates (graduated 2019) and early in our careers.
Submitted January 26, 2022 at 03:18AM by nichogenius https://ift.tt/3o19Ymx
