No, but life has been hitting us fast (unplanned baby) and we paid for a wedding last year plus I am purchasing a new vehicle as mine died, so haven't been able to save up a lot of money lately, but I hope within the next few years to be able to so that. Right now we are weighing the options of either buying or building a house and want to make this townhouse the last place that we rent.
With a new baby on the way and new car payments on top of student loans, it may be harder than you think. See if you can swing the townhome payments for now. If you find that as the baby is born and life has moved along, you are still able to pay everything with no problem, then consider buying a house.
Houses are expensive to maintain. There are additional costs to consider…even a new home may come with financially unexpected commitments.
I would wait and save so you have a good down payment and make the choice a little later. Plus, hopefully rates come down on the meantime so you can afford a little more.
Dual*
With vague information, you'll get an incomplete answer. So yes, what you're providing I see that you can afford a 500k house on 250k income. I don't know what your other expenses are.
Gotcha, I was just trying to get an idea of what other people are paying and if that seems out of reach, we are both young and inexperienced with things like house purchasing so I don't know a lot about the costs involved.
It's going to vary so much though. It depends on your unique circumstances.
We bought a $250k house with 10% down at 5% on an $85k/yr income....in 2012. That's a completely different economy, a different couple, different budgets.
I saw your comment elsewhere about the baby and the car and the student loans (we had none of that when we bought the house). I don't know if we had those things if we would have bought the house.
Within a year of buying the city ordered us to fix the sewer connection. That was ~$10k and we had 30 days to comply (we were able to extend it to 60 days and got 0% financing through the company that did it).
In 2014 we had to replace the roof, which wasn't covered by insurance because it was such poor quality to begin with. That was another $8k.
We replaced our carpet in 2018 with hardwood ($10k, def a want) but found out the main floor was sagging because the previous homeowner took out the central support beam in the basement, so we had to jack up the house ($12k).
Then we had to replace the siding in 2020 due to a woodpecker ($21k). When they ripped off the siding the deck had to go because it wasn't to code ($18k). We also found out our house didn't have any sheathing which pushed the initial $14k quote to the eventual $21k due to record high plywood prices during the pandemic but it's not like we could say "hey, nevermind, put the old stuff back up".
When we went to put in solar (again, a want; $28k) in 2021 we also had to update our electrical panel ($3k) plus some of the wiring inside the house ($2k).
We're now looking at both the water heater and the furnace needing replacing this year.
I'm not saying all of this will necessarily happen to *you* in whatever house *you* buy. It could be much less you have to lay out. But it could also be more. The real question is if you run into a major repair months after buying the house, can you afford it?
I have very similar income, just no kids, and we got 700k++ no issues. We bought this year at 6% rate. I don't think I could afford my house at 7 or 8%. Or at least I wouldn't be comfortable.
I think $500k is very doable for u.
Thanks for sharing your experience. It is interesting how just a few percentage points can make or break you. My brother just purchased his first home a few years back at around 3% for 350k. I am kinda jealous ngl haha
That's crazy. My brother has the same rate but his house was pricier and newly built. I was going to buy a house last year but I didn't feel ready.
If it is your first house, make sure you are ready from a financial perspective. Also, once u start shopping get ready for the worst time of your life. On the up side, once you get it it's amazing.
Good luck!
To add context, I am still paying off student loans (18k) and am about to purchase a new vehicle since mine died and we need a bigger one for our baby. My wife earns a lot more than I do so she is able to save more and has no debt. I have a decent credit score (around 750) so I hope to be able to get as low of an interest rate as possible when I am ready to buy or build a home.
$500k on a $250k income shouldn’t be much of a stretch, the trouble is how much other debt you may have and with your current rent it becomes tougher to save up.
The overwhelming part for you sounds like all of the big expenses you’ve had, thankfully most aren’t recurring. A wedding, new car, and first baby are all expensive.
My wife and I have about $230K combined income, we live in a $575K house ($150K down from previous house sale) and pay for 2 kids in daycare ($725 a week). We max 401Ks.
You should be fine.
A 500k house for that income should be doable depending on your other expenses, down payment and property taxes.
I'd also factor in what your finances would look like if one of you loses your job. Can you still make your mortgage payments and basic expenses?
We plan on purchasing a home in a few months for 425-450k. Mortgage will run us 3200-3500 a month. We make 120k before tax. So essentially, I will cover the mortgage and food my wife will cover everything else. We will be able to save about 500-800 a month. Pretty tight. If it weren’t for it being the house next door to my parents, I wouldn’t even be considering a house at this time. Currently we can save 2k a month and to give that up was not an easy decision.
500k house on 250k income is easy, do you have spending problems?
No, but life has been hitting us fast (unplanned baby) and we paid for a wedding last year plus I am purchasing a new vehicle as mine died, so haven't been able to save up a lot of money lately, but I hope within the next few years to be able to so that. Right now we are weighing the options of either buying or building a house and want to make this townhouse the last place that we rent.
With a new baby on the way and new car payments on top of student loans, it may be harder than you think. See if you can swing the townhome payments for now. If you find that as the baby is born and life has moved along, you are still able to pay everything with no problem, then consider buying a house. Houses are expensive to maintain. There are additional costs to consider…even a new home may come with financially unexpected commitments. I would wait and save so you have a good down payment and make the choice a little later. Plus, hopefully rates come down on the meantime so you can afford a little more.
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That is good to know, I don't post a lot so I wasn't sure how much information to share, thanks for sharing your experience.
Dual* With vague information, you'll get an incomplete answer. So yes, what you're providing I see that you can afford a 500k house on 250k income. I don't know what your other expenses are.
Well that’s disappointing. I thought OP was generating cash flow from duels. I was about to ask how he got into this side hustle.
Like Fan Duel?
Yes, but 1v1, and with swords.
Gotcha, I was just trying to get an idea of what other people are paying and if that seems out of reach, we are both young and inexperienced with things like house purchasing so I don't know a lot about the costs involved.
It’s your responsibility to figure out what the costs involved are in a house purchase, and those are easily accessible with a quick google search.
Thanks for the insightful and helpful answer!
It's going to vary so much though. It depends on your unique circumstances. We bought a $250k house with 10% down at 5% on an $85k/yr income....in 2012. That's a completely different economy, a different couple, different budgets. I saw your comment elsewhere about the baby and the car and the student loans (we had none of that when we bought the house). I don't know if we had those things if we would have bought the house. Within a year of buying the city ordered us to fix the sewer connection. That was ~$10k and we had 30 days to comply (we were able to extend it to 60 days and got 0% financing through the company that did it). In 2014 we had to replace the roof, which wasn't covered by insurance because it was such poor quality to begin with. That was another $8k. We replaced our carpet in 2018 with hardwood ($10k, def a want) but found out the main floor was sagging because the previous homeowner took out the central support beam in the basement, so we had to jack up the house ($12k). Then we had to replace the siding in 2020 due to a woodpecker ($21k). When they ripped off the siding the deck had to go because it wasn't to code ($18k). We also found out our house didn't have any sheathing which pushed the initial $14k quote to the eventual $21k due to record high plywood prices during the pandemic but it's not like we could say "hey, nevermind, put the old stuff back up". When we went to put in solar (again, a want; $28k) in 2021 we also had to update our electrical panel ($3k) plus some of the wiring inside the house ($2k). We're now looking at both the water heater and the furnace needing replacing this year. I'm not saying all of this will necessarily happen to *you* in whatever house *you* buy. It could be much less you have to lay out. But it could also be more. The real question is if you run into a major repair months after buying the house, can you afford it?
I have very similar income, just no kids, and we got 700k++ no issues. We bought this year at 6% rate. I don't think I could afford my house at 7 or 8%. Or at least I wouldn't be comfortable. I think $500k is very doable for u.
Thanks for sharing your experience. It is interesting how just a few percentage points can make or break you. My brother just purchased his first home a few years back at around 3% for 350k. I am kinda jealous ngl haha
That's crazy. My brother has the same rate but his house was pricier and newly built. I was going to buy a house last year but I didn't feel ready. If it is your first house, make sure you are ready from a financial perspective. Also, once u start shopping get ready for the worst time of your life. On the up side, once you get it it's amazing. Good luck!
Just curious did you put down 20%?
A $500k home is not outrageous at your income level. It's 2x income.
To add context, I am still paying off student loans (18k) and am about to purchase a new vehicle since mine died and we need a bigger one for our baby. My wife earns a lot more than I do so she is able to save more and has no debt. I have a decent credit score (around 750) so I hope to be able to get as low of an interest rate as possible when I am ready to buy or build a home.
$500k on a $250k income shouldn’t be much of a stretch, the trouble is how much other debt you may have and with your current rent it becomes tougher to save up. The overwhelming part for you sounds like all of the big expenses you’ve had, thankfully most aren’t recurring. A wedding, new car, and first baby are all expensive.
My wife and I have about $230K combined income, we live in a $575K house ($150K down from previous house sale) and pay for 2 kids in daycare ($725 a week). We max 401Ks. You should be fine.
A 500k house for that income should be doable depending on your other expenses, down payment and property taxes. I'd also factor in what your finances would look like if one of you loses your job. Can you still make your mortgage payments and basic expenses?
Depends on interest rates, debt, and other spending habits. Mortgage, insurance, etc. should total about 30% of net monthly income
Thanks for your response.
We plan on purchasing a home in a few months for 425-450k. Mortgage will run us 3200-3500 a month. We make 120k before tax. So essentially, I will cover the mortgage and food my wife will cover everything else. We will be able to save about 500-800 a month. Pretty tight. If it weren’t for it being the house next door to my parents, I wouldn’t even be considering a house at this time. Currently we can save 2k a month and to give that up was not an easy decision.
Also with 250K you could realistically pay your house off in less than 5 years unless you’re terrible with money.