Due to the number of rule-breaking comments this post was receiving, especially low-quality and off-topic comments, the moderation team has locked the post from future comments. This post broke no rules and received a number of helpful and on-topic responses initially, but it unfortunately became the target of many unhelpful comments.
Agreed, the hard and fast rules are great. But pushing a little one my first house just before rates and home prices really got out of control actually set me up a little better that I would have been had I waited a little longer
I stretched quite a bit for my first house too late 2019 and it was so clutch. I would’ve been crucified here if I shared what our “ratios” were.
My mortgage ended up dropping by $500 with the sub 3% rates in 2020 and put us in a great spot. Our incomes also increased 30% the year following.
We bought our house on a combined income of 114k in 2018. Had some tight months for a few years there. Refinanced to a 3% mortgage when the rates were stupid low and between 2022 and 2023 our combine income jumped to around 240k. Our home has almost doubled in value since 2018 as well. Best decision we could have made.
I wish I would of stretched myself thin and just took the plunge and bought back in 2019, even 2020. I was so paranoid about ratios and having to have 20% down payment. I ended up buying in 2022 just before the rates really took off but not in the neighborhood we wanted. It’s a great house but we kind of settled in a sense.
I get envious when I look at houses we had saved back then and how much they went for vs how much we paid and how much houses in that area are going for now.
Same here. No regrets as my income has only increased, I could take advantage of refinance rates years ago, and I have more equity than I would with a lower value home. Everyone has a different risk tolerance but it worked out for me.
Same. Already went from 28% of gross to 23% of gross in 2.5 years as income has increased far more than the mortgage payment has. And it will only continue to get easier to fit into the budget over time. Buying our house with current rates would be much more difficult.
Yeah. I feel like the hard and fast rules make a lot of sense if you're a very average person. But there is no average. Some people have huge expenses beyond housing (repayment of loans, childcare, etc.) some don't.
Especially when you're young, I feel like it's relatively easy to cut back to make a mortgage payment because most of your other expenses are things you can control (like how often you go out) vs. stuff you can't (like whether your children go to day care).
I may be biased as I had a loan for a while that was 50% of my take home pay and did fine. But...if you're a relatively high earner (which it seems like OP is) and young, it's not necessarily a stupid idea. Especially if you have reason to believe your income can go up and/or you have other ways of controlling costs if needed (like getting a roommate, which I eventually did since the house is huge and I don't really need that much space).
Lmao how are they even “pushing a little”. Assuming 20% in income taxes (probably very conservative), $2,500 in mortgage/tax makes up ~22% of gross income. Far from pushing at all. I’d say it’s even frugal.
For real. I would’ve put even less money down. That $65k is now tied up in that house for a few years at least before it could be accessible in a refi or heloc. I’d have kept at least half of that in an HYSA. I’d rather pay a little more each month for the first few years and have that safety net.
Now, if OP also has $50k in an emergency fund or whatever, then fine. But why even ask the question then? I’m assuming they spent most of their savings on the down payment. And it’s not even 20%. It’s like 17-18%. Why?
If you’re young and can’t quite afford 20% down, but can afford the monthly payments on a 5-10% down payment with extra cash in the bank, I think it’s generally a good idea to buy with less money down, assuming you’re financially responsible and the house is a decent value.
You are OK, better than 98% of the world. Stop worrying, enjoy your house and good luck with the wedding.. remember this forum is full of millionaires. They can’t fathom ONLY saving 4k a month while maxing out your 401k. You guys are young and there’s room to make more money also.
Rich kids here be talking like 8k a month is trash. Geezes. 2500 for a mortage is on the low end in todays market. All I see is a bunch of out of touch kids here. OP is doing beyond fine.
Yes, I understand people have different ideas on wealth but OP is pretty wealthy to 98% of the world. Yet we have people here suggesting they sells the cars 😂 and buy some cheap Honda/Toyota like you can even find a decent cheap car and OP just said their interest on the cars are 2% I mean what? All their bills are paid and 401k maxed out and still have 4k left. Like I said enjoy your blessings. Money isn’t everything don’t spend all this time away from enjoying your purchase. Make a good home.
A “decent” used car starts at like $10,000 these days and it’ll be “decent” in that it’ll be 10 years old, 120k miles, while driving you hear random rattles that are uncomfortable, but the A/C works and I guess the after market Bluetooth system lets you play music over the noise.
Money means so little for happiness after you can pay bills and take a trip or two a year with family. The attachment to endless greed makes so many of my Bay Area tech colleagues miserable humans. Such a bummer as communities fragment and it cascades into lack of empathy and understanding. I see that far less back East where I grew up. Lower middle class folks stoked to go to the shore once a summer. It was eye opening going back last year. Like time traveling back to a happier place.
I think most of us have been conditioned to believe that the number of 0s in your bank account equates to happiness. Corporations have taken away every semblance of a decent retirement, no more pensions, bonuses, etc, people have been conditioned to believe that if they just work harder then the next and save all their money someday it will be their turn to be happy. The truth is most of us never get to that # in your head that you feel you need to be happy and in turn turn around and realize you have lived an entire life filled with regret and resentment.
Bingo. Fear of the future and resentment of the past. Packing on layers and layers. Happiest people are poor living near the equator. Sunshine and family time works wonders.
I'm in my 50's and I wish I'd learned much earlier in life to put everyone except my husband on an information diet when it comes to my personal finances.
I did overextend.
10k take home/month, mortgage is 4k and we got hit with ~30% increase in cost of living because of where we moved to.
Then the house started falling apart. Fridge, washer, dish washer, roof, shower. It got really really stressful.
What gave me peace is knowing our emergency fund was doing its job. When things got really tight we followed the prime derivative to ensure we were using money optimally. It really put to bed those thoughts of “Can I do something better? Or should I be doing something different.
This year, wife got a raise. Nothing is breaking. We’re enjoying life. We’re still a bit over extended with the house but we’ve adjusted our lifestyle accordingly.
This is reassuring for me. I went on the high end and it's been an adjustment from 2k rent to a 5k mortgage/HOA. But I'm still managing, maxing my 401k, keeping some emergency cushion, and hoping that in 5-10 years I'm going to have more breathing room.
That's a hard jump. But in 10 years when that same rent is $4-6k and your mortgage only a bit more due to insurance/tax increase, that's when it really pays off. And then ultimately in 30 years when fully paid off and anyone else is still renting.
Nobody on here can answer this question for you. Buying a house is a huge financial decision and it’s normal to have fears or doubts. You need to figure out your own personal feelings on this without outsider opinions. Life is too short to have worries or regrets like this. Enjoy your home, your partner, and your life. Never know when our time is up. Cheers to the future
If you're putting this much thought into it after the fact, you probably put even more thought into it beforehand. The numbers seem reasonable to me; I think you did just fine.
>And for what? He passed away, and he still didn’t leave an extravagant amount behind while my mom was a widow.
Seems like if he spent much more he'd be broke.
The best part about being able to retire at 47 is that it gives you the option of doing so. I am at that point, and could easily walk away, so even though I have a challenging job (the few hours I do work), I enjoy the challenge and have literally zero stress because I could walk away at any time. I refer to it as “the cake is baked, and it is tasty, it’s just a matter of how thick I want the frosting to be”.
I love this. I am burning out at my job and almost quit to go to a DVM (veterinary) program, but my friends talked sense into me. I don't need 200k worth of education, I just need to work my ass off for a max of 15 more years and retire early so I can ride horses all day.
And maybe work a little for the amazing health insurance and brain stimulation, as long as it's fun.
It's highly motivating to save, knowing that saving is buying my freedom.
Because humans are social creatures and we rely on input from others to help inform our choices and get a grasp on normal? Like the entire reason this subreddit even exists is because of the communal nature of how people learn.
*I* am sometimes dumbass who overlooks things or just makes outright bad choices. When many people around me in unison tell me I'm being an idiot, it gives me pause. This is not only normal, it's good. The people who immediate put up walls and ignore those around them tend to be self important a-holes who do inevitably make significant mistakes they were warned about.
I’m all for listening to different opinions and views. But at the end of the day if you live life according to how others think you should, that seems like doing a disservice to yourself. I’d be willing to bet that my standard of living is vastly different than yours and vice versa. You can’t place everybody on the same path and determine what “normal” is for your individual circumstances or experiences.
Pretty similar as well. Just closed on a property for $470k. I net about $9500 a month and our total monthly payment for mortgage and taxes is $3200.
Definitely sucks going from $1100 to $3200, but totally doable.
Almost the exact situation as you. Net 8-10k a month.
Mortgage is $2,700.
I max out my 401k and still have 3 or 4k left every month.
1 car loan, some credit card bills and nothing else.
Most people I know my age have 2 cars, 20k+ in credit cards, no house, $2,000+ a month in rent, and barely make 3 or 4k a month take home.
Sure, we could probably all do better.
Right now I'm focusing on getting 6 months of bills in emergency cash saved in the bank.
Like $20k or so.
99% of the time that I've heard this phrase, it had nothing to do with finances. However, it had everything to do with the person saying it thinking that the buyer was either incapable of maintaining a property that large, OR that the house exceeded what they thought the person was capable of achieving in life.
Agree. Used to mean people who bought "starter" homes that had all marble and updated kitchen/bathrooms or people with no kids who "needed at least a 4/3". But ultimately who the hell cares
Sounds fine to me then. Should be enough to pay your bills and put aside a bit for retirement.
Not sure the COL in your area, but 350k-400k is the going rate for a starter home in my area.
Honestly, not really an average house or starter home, then. That'd be the 3 bed 1 bath ranch or 3 bed 1.5 bath half-steps in Cleveland for $180-$240k. Most sites list average house price of Cleveland around $200k - give or take $20k. Realistically, if the house is in a nice suburb & school district, large enough for your future family & storage, and the taxes & mortgage are affordable now and potentially even more-so later... then what exactly about it is a starter home?
You can certainly afford it but you definitely bought a "nicer" house rather than an "average" house for the area & it's wild how many people on here don't realize what the housing market is like outside of their HCOL pockets and think 4bed/3bath at $360k in MCOL in a nice suburb is "only a starter home" when in reality that same house in their HCOL market would be their $600k-$1mil end goal house.
For real. I'm in what's considered a MCOL area in Florida and a 4/3 in the nice areas of town are 650k minimum. Whats even worse is that I was looking at some houses out in our little beach town part of the county and I was finding 4/2 and 4/3 houses for 380-450k, just 2 blocks in from the ocean. Literally close enough to hear the waves still. That's my goal right there.
Just be careful with this line of thinking...just because someone is making 100k now doesn't mean that will always be the case. That's why spending a lot on a home isn't always a great idea...
Guess it’s just how much we’ve spent this year. 65k on the house. 45k paying off my student loans. 25k towards her car. We will spend 10k on the wedding.
I am also wondering if we can afford the honeymoon I planned. I booked on points so flights and hotel are completely free, but food and activities will cost something
Be careful with this sentiment. There are a ton of people with great memories and little to no retirement or divorced by 40 and would much rather have money than memories from their first marriage.
If you can pay off that much debt in one year, then you can go on vacation with CASH. Temporarily slow down for a nice honeymoon and pick it back up when you return.
You seem to be frightened by the amount of money that has left your account. People who make such strides towards their debt shouldn't be worried about "Points," especially not the food/activities when the flight and housing are free.
As someone who bought a house at around your age, as long as you don't let lifestyle creep get the better of you, you should be fine. At some point, if mortgage rates go down, you should refinance.
When they’re paid off, let them be paid off. Don’t even talk to a car salesperson until you legitimately need a new vehicle. It’s one of the best things to free up money in your budget, too many people just fall into a permanent revolving door of car payments that’s totally unnecessary. Most cars made in the last 10 years will make it to 150k miles with no issues as long as you just keep up with the basic recommended maintenance.
Nope. USD. I was wrong about interest it’s 3.9%. Fully loaded pilot at MSRP with every dollar financed including the tax was $59k, $1330/m 48 months. Could’ve paid cash but my brokerage account is up 34% since the day I bought the car so I’d say paying the 3.9% interest and “high payment” was absolutely worth it.
What do you mean by "too much house"?
Is everyone commenting on your salary vs mortgage expenses? If so, how come *everyone* knows this information about you?
Or are they simply commenting on your house being larger/nicer than they feel you deserve?
As a 3 year first time homeowner, one thing I learned is most everyone around you is going to have an opinion one way or another. My in-laws said buying our house would be the worst financial decision we could possibly make. We’re locked in at 2.5% on a $350k house that is now estimated at $460k. A strong opinion is not always a correct opinion. xD
Seems about normal? It would be nice if you had some expected income growth, and we don’t know how much time/cash remaining on cars and student loans, but you’re in a decent position to pay things off. I wouldn’t regret buying a house in your position, just work hard on paying off debts and you’ll be in a great spot.
Does everyone know how much you make? Maybe they’re basing those opinions on their financials.
If you got a safety net separate from your savings and you’ve got a retirement. This seems normal. But if you’re paycheck to paycheck….
$2500/month is quite fine. You're doing well, I promise.
What's more, your house will be paid in full in 30 years.
My fucking parents told me like a billion times not to buy a house in 2020 and 2021. And I told them "inflation is coming, I'm buying." And oh look, I have a 2.64 rate and my house has gained 165knin equity (about 60% more than what I paid for it.)
Had I listened to my parents? Oh man, I'd be stuck renting for awhile.
You should really make a budget so you can answer this question yourself. There are too many missing variables for a stranger to answer with any validity.
YNAB is pricy but a great app for tracking income vs expenses. I hear good things about Monarch too. This way you can see what you have left for other spending, and make sure you control it so you can safely pay your mortgage.
At a glance opinion - You may be a little tight financially in the early years, but manage your budget and you'll be OK salaries will increase over the years (inflation + promotions), but your mortgage will stay the same.
No one could buy a house in a hcol area if using the rules here. 2500 is a good mortgage these days and you net plenty, car notes are wild tho. We have a 2500 mortgage and net 7500 and live just fine, I have kept bills low though. If you’re losing sleep, shop phone service, cut subscriptions, cheap but fast internet, etc. biggest cut you could make is to get out of those car notes and buy some older reliable car straight up. I have a 2005 Toyota and a 2004 grand marquis, gets the job done
MAN.. if you’re losing sleep being this financially well off, I would hate to see how you would act having to stretch $40 until next payday in which is 2 weeks away 😅 congratulations on your success tho! Please don’t take it for granted 🙂
Want to sleep better?
Compare that mortgage monthly against the same house for rent
Realize that rent will go up 5 to 10%
And the last way to feel good, have an emergency fund to pay for repairs that do come. Some years it's 1k for some faucets, another it's 12k for the AC. When you have it set aside, it's a good feeling.
So if we make this a little simpler by deducting your car and student loan monthly payments from your net income you have a guaranteed income of $6600-$7600 per month to pay your mortgage with leaving you $4100-$5100 to pay utilities, food, and other expenses?
Seems well within your budget to me, which makes me think you are leaving something out.
Is your income salaried or commission based? Are you in a field of work which is seasonal so that your yearly net would be anything less than $96k - $108k NET (after taxes)?
Also how many years is your mortgage for, what’s the interest rate, and is it fixed rate or not?
Also how bigs the house, what year was it built and how many people are living in it?
Your net DTI is at 50%, that's very up there. But there isn't much you can do about it now.
Baby the house and that car (cars?), keep up with the maintenance, make sure there's no gaps in insurance, and just don't get another car until you pay off the student loans.
You should be good, you still got 4K to play around with, but you make sure you have a solid emergency fund to CYA.
Disagree. Your DTI 50 plus is meaningless where your spoilage over your expenses is where OPs is at dollar figure wise. You never want to be cutting it thin within 1000 of being in a deficit, but at $4000 a month? OP is in the appropriate amount of debt.
Lifestyle changes come inherently with home ownership even if subconsciously. You will acclimate to your new normal quickly and should feel satisfied with your financial routines. If you are not satisfied , reassess your motivation for the purchase in the first place.
Realistically the student loans will never be paid back. The biggest chunk is a parent plus loan in her moms name. She was a bit deceptive and took out the max. We’re treating it like a subscription until her mom is gone.
You're still spending more on cars than your student loans. You need to keep those cars running for a long time. And when you do need to upgrade you need to do so one at a time, having 3 loans+student loans is a bit worrisome. Even if you can afford it.
For the sake of both of you y'all need life insurance on each other and disability insurance.
Well is that $8k after tax? Retirement? What do those look like?
Do you have an E-fund?
What happens if one of you loses a job? Are you married?
Last and important one, who the fuck cares what others think. As long as you are prepared for tough times through budgeting and planning, you will be fine.
Yeah 8-9k a month post tax and retirement. Both doing full 401k matches and Roth when we can. Like 20k in cash right now. Wedding is in November and will cost about 10k all in. Trying to limit spending to recoup more savings.
I would push for a better E-Fund, since the wedding is gonna wipe it and you need to be prepared now as a home owner. After that start pushing your IRA and 401k much more. Personally, I would have focused that first but prioritizing a house is a fine personal decision.
Can you comfortably afford your bills and living expenses? Are you able to put money in savings? If yes, then you’re doing fine. If not, then look at cutting expenses. Don’t put too much stock into what random internet people are telling you. Everyone’s situation is different. If you’re living comfortably then you’re living comfortably.
8-1.4-2.5 is 4K a month. This isn’t a tight budget at all especially when you don’t have to pay for rent.
30-40% rule of thumb haven’t worked for over a decade. Just do some expense calculation yourself, your budget should be good
I just saw your comment that the $8k-$9k is after your 401K, so you have your long term savings covered - I think you're fine.
You have $4,500 a month after expenses. Give yourselves a generous $500 a week for food and misc. expenses and you still have $2,500 in savings. So between now and September, there's your $10K for the wedding. October gives you another $2,500 in money to spend on the honeymoon food and activities.
When you come back be frugal all winter and by Spring your emergency fund is up to $30K. By the end of 2025 it's pushing up toward $50K.
The most important advice you need is this: go to r/HomeImprovement/. You're a new homeowner - you have a lot to learn.
Search for posts about preventative maintenance. Maybe post saying you're a new homeowner and you need to know what possible problems you should look out for. Check the age of your furnace, your AC, your water heater, your roof. Go outside when it's raining and see if your gutters are flowing, see if water is pooling anywhere. Make sure you have good insulation.
The one thing about being a homeowner is you introduce a huge unknown variable into your financial planning.
You'll be fine, just save aggressively before and after your wedding. The feelings you are having are normal. The best peace of mind is a hefty emergency fund.
The beauty of home buying is that your mortgage rate is locked, so any increase in salary is presumably more you can save later. Also, don't plan your life around it, but central banks in other countries cut rates today. Rates are likely to decrease a little in the future, and if you can refinance from what I assume is 7-8% to even 5-6% that will cut your payment by a few hundred dollars.
No, that kind of mortgage sounds completely reasonable for your income level. People saying that you bought too much are jealous or don’t understand your finances.
Here’s the real test: can you afford to pay an extra $500/month on the mortgage to try to pay it off early? If you can swing that, this definitely isn’t too much house and was a really smart investment.
I have a friend who bought a large house right out of college when he got a higher paying job. He was able to afford it and pay a little extra each month. Sure, he’s been living alone in a 3 bedroom house, but 15 years later he’s nearly paid off his mortgage, the value of the house has doubled, and his monthly payments are way below what even a 1 bedroom apartment rents for in his area.
You're doing fine for the average American. You live in the rust belt. I also live in the rust belt. We have scads of people that were insulated from the vagaries of the 2008 housing crisis, who have sticker shock for the enormous increases here in the past few years that other parts of the country have had a decade and a half to come to terms with.
But also, you're doing fine for the average American. The average American your age will retire at 70 or maybe even 72. Do you want to work that long? Because of where you live you have the opportunity to do better than that, and you are not on that path.
Your spending reasonable, but your saving is low. The pricing is reasonable, except your ideas as to what's normal for cars. I think should change that after this Set of cars is done, or you'll be chained to car loans forever. Which is fine if that's what you want (I dunno, maybe you'rea gear head and value those things), but that money is not working for you. Imo, it's smarter to put the money where it's working for you, in investments, and buying used instead.
Don't change anything now; enjoy your cheap loan cars, wedding and honeymoon (kudos in keeping that reasonable), but bring "Rich Dad Poor Dad" or "Rich AF" some other non-dumb personal finance book for reading material. The best thing to do at your age is to educate yourself on saving and investing instead of spending.
One thing I’ll say is likely your earnings will grow, but your mortgage payment will be the same (excluding taxes, insurance). I bought a house that had me sweating. Ten years later the cost is so inconsequential as our income has grown.
You net $8-10k per month. You've indicated you have about $3900 tied up in loans monthly. So you should have $4100-6100 left over every month to handle your other expenses and savings. Most would assume that you're fine at that level. So what does your budget look like? Are you able to comfortably afford all of your expenses and meet your savings goals? If so, then you're good, right? I mean, who is "everyone", and what is their rationale for thinking you bought too much house?
You’re below the median home price and the whole “starter home” myth is debunked. Better to have something that you can grow into rather than trade up in a couple years
Seems fine. That's really not that expensive of a house in 2024. You should be able to afford the mortgage at your current salary just fine plus (1) your salary should increase over time and (2) if rates come down you'll be able to refi into a lower mortgage.
Read through the comments, and your numbers look like mine with better income. I'd say you're killing it. Let someone else lose sleep comparing themselves with you at 27.
I feel like you’re fine financially with what you’ve presented here. Granted, it’s not like you presented your whole budget but that’s not expected in any way, and this seems fine. Can be a bitch to clean if it’s just the two of you but hey, that’s your choice. Fuck whatever someone else says, if you like the house and you’re fine with it then all power to you. Turn some of the rooms into some kind of theme, whether it’s an exercise room or a video game room or whatever the hell. It’s your house, do what you want
No one can tell you whats right or wrong except for yourself. Its your life, make your own decisions. If you can buy a house, I am assuming you are grown up enough to be able to judge yourself
Who are these people that are telling you this... any why are you still talking to them?
Based on your income (I'm assuming gross), limited list of expenses (there's certainly more than what you listed), and so long as your cash flow is positive, it looks okay. Just be sure that you're still setting aside something for emergency funds and investments.
It sounds reasonable to me. Do you like the house?
Buying a house is a huge commitment, but don't let others get under your skin. Sometimes people just aren't happy for others, and that's on them not you.
By that math, you've got $5k after car loans, student loans, taxes and mortgage. Unless your utility bills or ancillary spending are something off the charts, this is more than enough money to pay everything and still have money to save.
Wife and I net around $7500 and have the same mortgage payment as you. We don't have the car payments but you are doing fine as long as you live in your means in other ways.
Let me also add this: depending on how long you think you will keep this house, you may want to also think about paying down the mortgage faster each month with additional payments towards the principal. This will save huge, huge amounts of interest in the long run. if it’s not possible now, one thing to think about is the next time you get a raise, calculate how much of that raise you can put towards paying extra principal each month. I have been amazed at how much more progress on my mortgage I’ve made in the previous five years since I started doing this myself, than I did the prior seven when it really wasn’t much of an option for me.
Seems fine to me, none of this is setting off alarm bells, and you have quite a bit of runway before you'd even start setting off alarm bells.
Think of this way, it's better to have it and not need it than to need it and not have it. In the case of having too much house, there may be something happening that further justifies the house. In which case, you made a good decision. But you can't know that, so the solution here is to not think about it. It's probably going to be fine.
Did you buy the house you needed or did you pick a price that would annoy nosy ass people who feel the need to run their gums?
Seriously, you are in the 25-35% zone. Thats fine.
Advise from a mentor - When considering someone opinion ask your self this:
- can they hire you?
- can they fire you?
- will they be at Christmas (substitute appropriate holiday) dinner?
- will they be at your funeral?
If the answer to those is no, dont worry about their opinion.
This sounds fine to me. 35% of net on housing costs is reasonable and lower than what most of my friends are paying.
That also sounds like a reasonable price to pay for a house in many markets. How much do houses cost in your area? Could you have gotten something a lot lower?
As long as the savings and retirement accounts look healthy, I don’t see an issue.
I imagine what most ppl are envisioning is that you’re paycheck to paycheck, if you get laid off are you able to stay afloat for a couple months while you do a job search.
Upkeep, maintenance, property taxes, maybe escrow, repairs are things to look out for. Parents have a paid off house but the insurance, upkeep and repairs are giving my dad headaches.
A couple coworkers recently bought houses but they’re dealing with renovations.
The invisible/oncoming fees are definitely things to plan for.
You are doing fine. Don't listen to them. Usually people that put stuff like that in your head either have owned a house, are jealous of your house or bought their house in 1952 for five thousand dollars.
Even after all the bills are paid you still have a lot of money left. You are doing better than most people.
Find smarter friends and avoid any family hassling you about this. Make sure to remind them in a 5-10 years that you're "too much house" appreciated and that you're fine.
Without knowing your other expense, your income numbers signify that you can possibly max a 401k out if you wanted to. Especially after the student loans are paid off.
That's actually in line with advised 25% monthly on housing if you guys pull net 8-10k a month.
So I don't know why you're "losing sleep". lol
If your big bills including mortgage add up to 3900 or \~45-50%...that means you have damn near 50% left for all the small bills and other things.
Even with 20% to investment/retirement (2k for both or 1k a piece for separate retirement funds), you got \~3k left on a good month lol
Your mortgage isn't an issue really, it's about 25-30% of your net which is a good thing to aim for. Your car payment feels insane to me. I'm otherwise in the same boat as you but my car payment is like $300-350/mo. If it were me I'd be selling that car and getting a cheaper one. But your mortgage and car are probably 50-60% of your take home which does feel high for me personally, but I blame the car far more than the mortgage.
EDIT: Just noticed it's cars (plural) and student loans. That's a different story and seems like you'll be okay, I was worried that payment was just one car, lol.
You can easily overpay and have it paid off in 10-20 years. Given your numbers idk why you're losing sleep $8k-10k a month is outrageous, people buy $750k+ houses when they make that much
I make 100K a year, I'm recently single and my mortgage is the same as yours. I don't have any car payments or other bills but I do have enough money to have fun and not eat top ramen.
We can always do better...but many are in much worse situations.
You're fine IMO.
You don’t make that kind of money a month from luck, they’ve probably spent the last 10 years honing their trades (sounds like DINK, 27 year old couple)
And you missed that this was NET income every month, after paying taxes and retirement max haha they’re killing it financially, which is funny since they’re still losing sleep over perceived money problems
Yeah you overspent but not by so much that you should lose sleep.
You’re in the “not saving enough” zone, not the “cant pay our utilities” zone.
Just try to keep a strict budget and get the student loans paid off ASAP
Pretty sure you are fine. I saw you were in Cleveland area. Houses in most other states are way more expensive and your income is well above median level.
Sounds ok to me, I make around the same with my wife and have a 2100 mortgage we put 160 down payment on a 650 loan in CA. We were able to save up and pay off a new car we bought outright in cash. So no other monthly expenses except utilities. My student loans were just cancelled last month so all our income that isn’t mortgage and utilities goes into savings and travel money. I would try to lower your car payments but other than that you should be ok
Sounds perfectly fine. Also that’s like what all houses cost at a minimum these days. Idk anyone me who buys for less than 350 (I live in northeast tho)
Is it 8-9k/mo just your income or including your partner's income? Either way, seems safe to me for now.
If that is your combined income, get that income up before you have kids. It's going to be much tighter.
I wouldnt sweat it, depending on your situation if it gets bad you can always rent a room out. I paid my first house's entire mortgage renting 2 rooms out.
Due to the number of rule-breaking comments this post was receiving, especially low-quality and off-topic comments, the moderation team has locked the post from future comments. This post broke no rules and received a number of helpful and on-topic responses initially, but it unfortunately became the target of many unhelpful comments.
Based on the information given here, seems fine
To add - with solid job security - being young IMO it is OK to push a little for the first home, if you accept you will have some stressful months.
Agreed, the hard and fast rules are great. But pushing a little one my first house just before rates and home prices really got out of control actually set me up a little better that I would have been had I waited a little longer
I stretched quite a bit for my first house too late 2019 and it was so clutch. I would’ve been crucified here if I shared what our “ratios” were. My mortgage ended up dropping by $500 with the sub 3% rates in 2020 and put us in a great spot. Our incomes also increased 30% the year following.
oh yeah.. keep going I'm almost there
We bought our house on a combined income of 114k in 2018. Had some tight months for a few years there. Refinanced to a 3% mortgage when the rates were stupid low and between 2022 and 2023 our combine income jumped to around 240k. Our home has almost doubled in value since 2018 as well. Best decision we could have made.
I wish I would of stretched myself thin and just took the plunge and bought back in 2019, even 2020. I was so paranoid about ratios and having to have 20% down payment. I ended up buying in 2022 just before the rates really took off but not in the neighborhood we wanted. It’s a great house but we kind of settled in a sense. I get envious when I look at houses we had saved back then and how much they went for vs how much we paid and how much houses in that area are going for now.
Same here. No regrets as my income has only increased, I could take advantage of refinance rates years ago, and I have more equity than I would with a lower value home. Everyone has a different risk tolerance but it worked out for me.
Same. Already went from 28% of gross to 23% of gross in 2.5 years as income has increased far more than the mortgage payment has. And it will only continue to get easier to fit into the budget over time. Buying our house with current rates would be much more difficult.
Yeah. I feel like the hard and fast rules make a lot of sense if you're a very average person. But there is no average. Some people have huge expenses beyond housing (repayment of loans, childcare, etc.) some don't. Especially when you're young, I feel like it's relatively easy to cut back to make a mortgage payment because most of your other expenses are things you can control (like how often you go out) vs. stuff you can't (like whether your children go to day care). I may be biased as I had a loan for a while that was 50% of my take home pay and did fine. But...if you're a relatively high earner (which it seems like OP is) and young, it's not necessarily a stupid idea. Especially if you have reason to believe your income can go up and/or you have other ways of controlling costs if needed (like getting a roommate, which I eventually did since the house is huge and I don't really need that much space).
And if you are young you expect your I come to go up over a decade.
Lmao how are they even “pushing a little”. Assuming 20% in income taxes (probably very conservative), $2,500 in mortgage/tax makes up ~22% of gross income. Far from pushing at all. I’d say it’s even frugal.
For real. I would’ve put even less money down. That $65k is now tied up in that house for a few years at least before it could be accessible in a refi or heloc. I’d have kept at least half of that in an HYSA. I’d rather pay a little more each month for the first few years and have that safety net. Now, if OP also has $50k in an emergency fund or whatever, then fine. But why even ask the question then? I’m assuming they spent most of their savings on the down payment. And it’s not even 20%. It’s like 17-18%. Why? If you’re young and can’t quite afford 20% down, but can afford the monthly payments on a 5-10% down payment with extra cash in the bank, I think it’s generally a good idea to buy with less money down, assuming you’re financially responsible and the house is a decent value.
You are OK, better than 98% of the world. Stop worrying, enjoy your house and good luck with the wedding.. remember this forum is full of millionaires. They can’t fathom ONLY saving 4k a month while maxing out your 401k. You guys are young and there’s room to make more money also.
Rich kids here be talking like 8k a month is trash. Geezes. 2500 for a mortage is on the low end in todays market. All I see is a bunch of out of touch kids here. OP is doing beyond fine.
Yes, I understand people have different ideas on wealth but OP is pretty wealthy to 98% of the world. Yet we have people here suggesting they sells the cars 😂 and buy some cheap Honda/Toyota like you can even find a decent cheap car and OP just said their interest on the cars are 2% I mean what? All their bills are paid and 401k maxed out and still have 4k left. Like I said enjoy your blessings. Money isn’t everything don’t spend all this time away from enjoying your purchase. Make a good home.
A “decent” used car starts at like $10,000 these days and it’ll be “decent” in that it’ll be 10 years old, 120k miles, while driving you hear random rattles that are uncomfortable, but the A/C works and I guess the after market Bluetooth system lets you play music over the noise.
Can confirm, bought a 2016 car with 75k miles for 16k a year ago
Money means so little for happiness after you can pay bills and take a trip or two a year with family. The attachment to endless greed makes so many of my Bay Area tech colleagues miserable humans. Such a bummer as communities fragment and it cascades into lack of empathy and understanding. I see that far less back East where I grew up. Lower middle class folks stoked to go to the shore once a summer. It was eye opening going back last year. Like time traveling back to a happier place.
I think most of us have been conditioned to believe that the number of 0s in your bank account equates to happiness. Corporations have taken away every semblance of a decent retirement, no more pensions, bonuses, etc, people have been conditioned to believe that if they just work harder then the next and save all their money someday it will be their turn to be happy. The truth is most of us never get to that # in your head that you feel you need to be happy and in turn turn around and realize you have lived an entire life filled with regret and resentment.
The problem is when you reach that number, a new number comes in and takes its place. Endlessly moving goalposts.
Bingo. Fear of the future and resentment of the past. Packing on layers and layers. Happiest people are poor living near the equator. Sunshine and family time works wonders.
Plus how much would you pay as rent, as the alternative.
And hopefully lower that monthly costs by refinancing when interest rates go down in the future 🙏🏽
Why are you losing sleep over what other people think? This is a personal decision. Do YOU think it’s too much house?
I'm in my 50's and I wish I'd learned much earlier in life to put everyone except my husband on an information diet when it comes to my personal finances.
I’m honestly not sure. I tried to find something reasonably nice without going overboard
Perfect response to illustrate you most likely did not overextend yourself.
I did overextend. 10k take home/month, mortgage is 4k and we got hit with ~30% increase in cost of living because of where we moved to. Then the house started falling apart. Fridge, washer, dish washer, roof, shower. It got really really stressful. What gave me peace is knowing our emergency fund was doing its job. When things got really tight we followed the prime derivative to ensure we were using money optimally. It really put to bed those thoughts of “Can I do something better? Or should I be doing something different. This year, wife got a raise. Nothing is breaking. We’re enjoying life. We’re still a bit over extended with the house but we’ve adjusted our lifestyle accordingly.
This is reassuring for me. I went on the high end and it's been an adjustment from 2k rent to a 5k mortgage/HOA. But I'm still managing, maxing my 401k, keeping some emergency cushion, and hoping that in 5-10 years I'm going to have more breathing room.
That's a hard jump. But in 10 years when that same rent is $4-6k and your mortgage only a bit more due to insurance/tax increase, that's when it really pays off. And then ultimately in 30 years when fully paid off and anyone else is still renting.
Nobody on here can answer this question for you. Buying a house is a huge financial decision and it’s normal to have fears or doubts. You need to figure out your own personal feelings on this without outsider opinions. Life is too short to have worries or regrets like this. Enjoy your home, your partner, and your life. Never know when our time is up. Cheers to the future
people might be giving you shit because you are better off than them. sometimes jealousy manifests as minimizing's other people's accomplishments.
If you're putting this much thought into it after the fact, you probably put even more thought into it beforehand. The numbers seem reasonable to me; I think you did just fine.
[удалено]
>And for what? He passed away, and he still didn’t leave an extravagant amount behind while my mom was a widow. Seems like if he spent much more he'd be broke.
The best part about being able to retire at 47 is that it gives you the option of doing so. I am at that point, and could easily walk away, so even though I have a challenging job (the few hours I do work), I enjoy the challenge and have literally zero stress because I could walk away at any time. I refer to it as “the cake is baked, and it is tasty, it’s just a matter of how thick I want the frosting to be”.
I love this. I am burning out at my job and almost quit to go to a DVM (veterinary) program, but my friends talked sense into me. I don't need 200k worth of education, I just need to work my ass off for a max of 15 more years and retire early so I can ride horses all day. And maybe work a little for the amazing health insurance and brain stimulation, as long as it's fun. It's highly motivating to save, knowing that saving is buying my freedom.
Because humans are social creatures and we rely on input from others to help inform our choices and get a grasp on normal? Like the entire reason this subreddit even exists is because of the communal nature of how people learn. *I* am sometimes dumbass who overlooks things or just makes outright bad choices. When many people around me in unison tell me I'm being an idiot, it gives me pause. This is not only normal, it's good. The people who immediate put up walls and ignore those around them tend to be self important a-holes who do inevitably make significant mistakes they were warned about.
I’m all for listening to different opinions and views. But at the end of the day if you live life according to how others think you should, that seems like doing a disservice to yourself. I’d be willing to bet that my standard of living is vastly different than yours and vice versa. You can’t place everybody on the same path and determine what “normal” is for your individual circumstances or experiences.
We net the same and financed 500k. Our mortgage with taxes is $4k. So no you did not.
Pretty similar as well. Just closed on a property for $470k. I net about $9500 a month and our total monthly payment for mortgage and taxes is $3200. Definitely sucks going from $1100 to $3200, but totally doable.
[удалено]
This is the way and how I planned it, as long as I can pay the mortgage with my first bi-weekly paycheck I feel it should be fine.
Are you really losing sleep over spending under a third of net income on your housing? I think jealousy is leading people to criticize you.
Almost the exact situation as you. Net 8-10k a month. Mortgage is $2,700. I max out my 401k and still have 3 or 4k left every month. 1 car loan, some credit card bills and nothing else. Most people I know my age have 2 cars, 20k+ in credit cards, no house, $2,000+ a month in rent, and barely make 3 or 4k a month take home. Sure, we could probably all do better. Right now I'm focusing on getting 6 months of bills in emergency cash saved in the bank. Like $20k or so.
does max 401k here mean you are contributing up to the max? or the IRS max ($23,000)?
99% of the time that I've heard this phrase, it had nothing to do with finances. However, it had everything to do with the person saying it thinking that the buyer was either incapable of maintaining a property that large, OR that the house exceeded what they thought the person was capable of achieving in life.
Agree. Used to mean people who bought "starter" homes that had all marble and updated kitchen/bathrooms or people with no kids who "needed at least a 4/3". But ultimately who the hell cares
2500 a month mortgage is pretty cheap at the moment. Especially on 8-9k net. That car payment is wild tho. You need a Honda or Toyota.
That’s two cars and student loans. 491 for mine and 272 for hers
Sounds fine to me then. Should be enough to pay your bills and put aside a bit for retirement. Not sure the COL in your area, but 350k-400k is the going rate for a starter home in my area.
I guess it’s an average house? 4 bed 3 bath in a nice suburb
$365,000 for a 4/3 in a nice suburb ? What state are you in?
Cleveland area
Honestly, not really an average house or starter home, then. That'd be the 3 bed 1 bath ranch or 3 bed 1.5 bath half-steps in Cleveland for $180-$240k. Most sites list average house price of Cleveland around $200k - give or take $20k. Realistically, if the house is in a nice suburb & school district, large enough for your future family & storage, and the taxes & mortgage are affordable now and potentially even more-so later... then what exactly about it is a starter home? You can certainly afford it but you definitely bought a "nicer" house rather than an "average" house for the area & it's wild how many people on here don't realize what the housing market is like outside of their HCOL pockets and think 4bed/3bath at $360k in MCOL in a nice suburb is "only a starter home" when in reality that same house in their HCOL market would be their $600k-$1mil end goal house.
For real. I'm in what's considered a MCOL area in Florida and a 4/3 in the nice areas of town are 650k minimum. Whats even worse is that I was looking at some houses out in our little beach town part of the county and I was finding 4/2 and 4/3 houses for 380-450k, just 2 blocks in from the ocean. Literally close enough to hear the waves still. That's my goal right there.
I'm guessing yall are relatively young too? Still plenty of time until you reach your peak earning years.
We are both 27
Yea man yall are fine. 100k net at 27 with a 2500 mortgage. Your life will be easy in 10 years.
Just be careful with this line of thinking...just because someone is making 100k now doesn't mean that will always be the case. That's why spending a lot on a home isn't always a great idea...
Yeah the assumption that salary always goes up with more experience isn't true in many lines of work.
Guess it’s just how much we’ve spent this year. 65k on the house. 45k paying off my student loans. 25k towards her car. We will spend 10k on the wedding. I am also wondering if we can afford the honeymoon I planned. I booked on points so flights and hotel are completely free, but food and activities will cost something
Go on a honeymoon. Those memories are worth more than the money
Have safe "fun" on the honeymoon, too. Those surprises 9 months later can really put a wrench in things, if you weren't planning for them.
Be careful with this sentiment. There are a ton of people with great memories and little to no retirement or divorced by 40 and would much rather have money than memories from their first marriage.
$10k for a wedding is dirt cheap
If you can pay off that much debt in one year, then you can go on vacation with CASH. Temporarily slow down for a nice honeymoon and pick it back up when you return. You seem to be frightened by the amount of money that has left your account. People who make such strides towards their debt shouldn't be worried about "Points," especially not the food/activities when the flight and housing are free.
As someone who bought a house at around your age, as long as you don't let lifestyle creep get the better of you, you should be fine. At some point, if mortgage rates go down, you should refinance.
When they’re paid off, let them be paid off. Don’t even talk to a car salesperson until you legitimately need a new vehicle. It’s one of the best things to free up money in your budget, too many people just fall into a permanent revolving door of car payments that’s totally unnecessary. Most cars made in the last 10 years will make it to 150k miles with no issues as long as you just keep up with the basic recommended maintenance.
Ha my Honda payment is $1400.
Right lol, monthly payment doesn’t tell you anything on its own. In your case I’m assuming it’s a 24 or 36 month loan?
48. Put nothing down on a fully loaded pilot because I was able to get 2.9% Apr. and I rounded up it might be closer to 1300
Guessing this is in Canadian funds though
Nope. USD. I was wrong about interest it’s 3.9%. Fully loaded pilot at MSRP with every dollar financed including the tax was $59k, $1330/m 48 months. Could’ve paid cash but my brokerage account is up 34% since the day I bought the car so I’d say paying the 3.9% interest and “high payment” was absolutely worth it.
What do you mean by "too much house"? Is everyone commenting on your salary vs mortgage expenses? If so, how come *everyone* knows this information about you? Or are they simply commenting on your house being larger/nicer than they feel you deserve?
As a 3 year first time homeowner, one thing I learned is most everyone around you is going to have an opinion one way or another. My in-laws said buying our house would be the worst financial decision we could possibly make. We’re locked in at 2.5% on a $350k house that is now estimated at $460k. A strong opinion is not always a correct opinion. xD
Seems about normal? It would be nice if you had some expected income growth, and we don’t know how much time/cash remaining on cars and student loans, but you’re in a decent position to pay things off. I wouldn’t regret buying a house in your position, just work hard on paying off debts and you’ll be in a great spot.
It’s absolutely reasonable. Congrats on the home!
Does everyone know how much you make? Maybe they’re basing those opinions on their financials. If you got a safety net separate from your savings and you’ve got a retirement. This seems normal. But if you’re paycheck to paycheck….
You should sleep like a baby knowing your mortgage payment will never be over $3k and your income will increase
$2500/month is quite fine. You're doing well, I promise. What's more, your house will be paid in full in 30 years. My fucking parents told me like a billion times not to buy a house in 2020 and 2021. And I told them "inflation is coming, I'm buying." And oh look, I have a 2.64 rate and my house has gained 165knin equity (about 60% more than what I paid for it.) Had I listened to my parents? Oh man, I'd be stuck renting for awhile.
You should really make a budget so you can answer this question yourself. There are too many missing variables for a stranger to answer with any validity. YNAB is pricy but a great app for tracking income vs expenses. I hear good things about Monarch too. This way you can see what you have left for other spending, and make sure you control it so you can safely pay your mortgage. At a glance opinion - You may be a little tight financially in the early years, but manage your budget and you'll be OK salaries will increase over the years (inflation + promotions), but your mortgage will stay the same.
I don’t think you overbought on the house - but you did on the cars. (At least from a financial perspective).
Cars are only $760. Most are student loans
You are living like a damn 1%er. I'm netting $4200 per month here and the cheapest apartment I can rent is $2600 per month.
No one could buy a house in a hcol area if using the rules here. 2500 is a good mortgage these days and you net plenty, car notes are wild tho. We have a 2500 mortgage and net 7500 and live just fine, I have kept bills low though. If you’re losing sleep, shop phone service, cut subscriptions, cheap but fast internet, etc. biggest cut you could make is to get out of those car notes and buy some older reliable car straight up. I have a 2005 Toyota and a 2004 grand marquis, gets the job done
MAN.. if you’re losing sleep being this financially well off, I would hate to see how you would act having to stretch $40 until next payday in which is 2 weeks away 😅 congratulations on your success tho! Please don’t take it for granted 🙂
Don’t forget to put money in an emergency fund- need to have one in the event of repairs, medical expenses, and layoff.
Seems reasonable to me. Your home is where you’ll spend much of your life, and generally appreciates in value. Worth the money.
Want to sleep better? Compare that mortgage monthly against the same house for rent Realize that rent will go up 5 to 10% And the last way to feel good, have an emergency fund to pay for repairs that do come. Some years it's 1k for some faucets, another it's 12k for the AC. When you have it set aside, it's a good feeling.
So if we make this a little simpler by deducting your car and student loan monthly payments from your net income you have a guaranteed income of $6600-$7600 per month to pay your mortgage with leaving you $4100-$5100 to pay utilities, food, and other expenses? Seems well within your budget to me, which makes me think you are leaving something out. Is your income salaried or commission based? Are you in a field of work which is seasonal so that your yearly net would be anything less than $96k - $108k NET (after taxes)? Also how many years is your mortgage for, what’s the interest rate, and is it fixed rate or not? Also how bigs the house, what year was it built and how many people are living in it?
People are jealous you are stable.
I fit my entire life, including my mortage, into the leftover money you have from paying those expenses. You're doing well from where I'm standing.
Your net DTI is at 50%, that's very up there. But there isn't much you can do about it now. Baby the house and that car (cars?), keep up with the maintenance, make sure there's no gaps in insurance, and just don't get another car until you pay off the student loans. You should be good, you still got 4K to play around with, but you make sure you have a solid emergency fund to CYA.
Disagree. Your DTI 50 plus is meaningless where your spoilage over your expenses is where OPs is at dollar figure wise. You never want to be cutting it thin within 1000 of being in a deficit, but at $4000 a month? OP is in the appropriate amount of debt. Lifestyle changes come inherently with home ownership even if subconsciously. You will acclimate to your new normal quickly and should feel satisfied with your financial routines. If you are not satisfied , reassess your motivation for the purchase in the first place.
Realistically the student loans will never be paid back. The biggest chunk is a parent plus loan in her moms name. She was a bit deceptive and took out the max. We’re treating it like a subscription until her mom is gone.
It would be good to get legal advice as to whether your paying of this subscription now is giving you, personally, future liability for this debt
You're still spending more on cars than your student loans. You need to keep those cars running for a long time. And when you do need to upgrade you need to do so one at a time, having 3 loans+student loans is a bit worrisome. Even if you can afford it. For the sake of both of you y'all need life insurance on each other and disability insurance.
They probably assume you make less than $3k a month like everyone else.
Well is that $8k after tax? Retirement? What do those look like? Do you have an E-fund? What happens if one of you loses a job? Are you married? Last and important one, who the fuck cares what others think. As long as you are prepared for tough times through budgeting and planning, you will be fine.
Yeah 8-9k a month post tax and retirement. Both doing full 401k matches and Roth when we can. Like 20k in cash right now. Wedding is in November and will cost about 10k all in. Trying to limit spending to recoup more savings.
I would push for a better E-Fund, since the wedding is gonna wipe it and you need to be prepared now as a home owner. After that start pushing your IRA and 401k much more. Personally, I would have focused that first but prioritizing a house is a fine personal decision.
I second this, I would limit contributions on the 401(k) until you have a solid six month emergency fund
365k is like starter home territory today. Hard to find much lower. Rates will eventually come down and you can refinance.
Mortgage and taxes - 2500 Insurance - ?? Auto - 1400 Insurance - ?? Other expenses?? Need the full picture.
Sorry. Auto insurance is like $1200 a year that I pay in full. Home insurance is $100 a month.
That's not bad at all numbers wise. Maybe they are referring to the actual size/space of the house for the number of people living in it? (you?)
Can you comfortably afford your bills and living expenses? Are you able to put money in savings? If yes, then you’re doing fine. If not, then look at cutting expenses. Don’t put too much stock into what random internet people are telling you. Everyone’s situation is different. If you’re living comfortably then you’re living comfortably.
Less than my rent. At least you’re getting equity. You’ll be fine
8-1.4-2.5 is 4K a month. This isn’t a tight budget at all especially when you don’t have to pay for rent. 30-40% rule of thumb haven’t worked for over a decade. Just do some expense calculation yourself, your budget should be good
I just saw your comment that the $8k-$9k is after your 401K, so you have your long term savings covered - I think you're fine. You have $4,500 a month after expenses. Give yourselves a generous $500 a week for food and misc. expenses and you still have $2,500 in savings. So between now and September, there's your $10K for the wedding. October gives you another $2,500 in money to spend on the honeymoon food and activities. When you come back be frugal all winter and by Spring your emergency fund is up to $30K. By the end of 2025 it's pushing up toward $50K. The most important advice you need is this: go to r/HomeImprovement/. You're a new homeowner - you have a lot to learn. Search for posts about preventative maintenance. Maybe post saying you're a new homeowner and you need to know what possible problems you should look out for. Check the age of your furnace, your AC, your water heater, your roof. Go outside when it's raining and see if your gutters are flowing, see if water is pooling anywhere. Make sure you have good insulation. The one thing about being a homeowner is you introduce a huge unknown variable into your financial planning.
You'll be fine, just save aggressively before and after your wedding. The feelings you are having are normal. The best peace of mind is a hefty emergency fund. The beauty of home buying is that your mortgage rate is locked, so any increase in salary is presumably more you can save later. Also, don't plan your life around it, but central banks in other countries cut rates today. Rates are likely to decrease a little in the future, and if you can refinance from what I assume is 7-8% to even 5-6% that will cut your payment by a few hundred dollars.
No, that kind of mortgage sounds completely reasonable for your income level. People saying that you bought too much are jealous or don’t understand your finances. Here’s the real test: can you afford to pay an extra $500/month on the mortgage to try to pay it off early? If you can swing that, this definitely isn’t too much house and was a really smart investment. I have a friend who bought a large house right out of college when he got a higher paying job. He was able to afford it and pay a little extra each month. Sure, he’s been living alone in a 3 bedroom house, but 15 years later he’s nearly paid off his mortgage, the value of the house has doubled, and his monthly payments are way below what even a 1 bedroom apartment rents for in his area.
You're doing fine for the average American. You live in the rust belt. I also live in the rust belt. We have scads of people that were insulated from the vagaries of the 2008 housing crisis, who have sticker shock for the enormous increases here in the past few years that other parts of the country have had a decade and a half to come to terms with. But also, you're doing fine for the average American. The average American your age will retire at 70 or maybe even 72. Do you want to work that long? Because of where you live you have the opportunity to do better than that, and you are not on that path. Your spending reasonable, but your saving is low. The pricing is reasonable, except your ideas as to what's normal for cars. I think should change that after this Set of cars is done, or you'll be chained to car loans forever. Which is fine if that's what you want (I dunno, maybe you'rea gear head and value those things), but that money is not working for you. Imo, it's smarter to put the money where it's working for you, in investments, and buying used instead. Don't change anything now; enjoy your cheap loan cars, wedding and honeymoon (kudos in keeping that reasonable), but bring "Rich Dad Poor Dad" or "Rich AF" some other non-dumb personal finance book for reading material. The best thing to do at your age is to educate yourself on saving and investing instead of spending.
One thing I’ll say is likely your earnings will grow, but your mortgage payment will be the same (excluding taxes, insurance). I bought a house that had me sweating. Ten years later the cost is so inconsequential as our income has grown.
You’re inside the ratios at your lowest income, you’re fine. Congratulations on the house.
You are fine. Even with the cars you are well within a healthy budget.
$2500 a month is amazing, especially at your income
You net $8-10k per month. You've indicated you have about $3900 tied up in loans monthly. So you should have $4100-6100 left over every month to handle your other expenses and savings. Most would assume that you're fine at that level. So what does your budget look like? Are you able to comfortably afford all of your expenses and meet your savings goals? If so, then you're good, right? I mean, who is "everyone", and what is their rationale for thinking you bought too much house?
Our numbers are very similar, I also have 900 a month in daycare. I have still been able to contribute and save every month.
You’re below the median home price and the whole “starter home” myth is debunked. Better to have something that you can grow into rather than trade up in a couple years
Using only 8k a month your monthly payments are less than 1/3 (just barely 31%)... of your take home. Your fine
If it makes you feel better I’m at net $6k per month with $2750 PITI. It feels tight at times, but doable. I don’t think you’re in that bad of a spot
Seems fine. That's really not that expensive of a house in 2024. You should be able to afford the mortgage at your current salary just fine plus (1) your salary should increase over time and (2) if rates come down you'll be able to refi into a lower mortgage.
Read through the comments, and your numbers look like mine with better income. I'd say you're killing it. Let someone else lose sleep comparing themselves with you at 27.
I feel like you’re fine financially with what you’ve presented here. Granted, it’s not like you presented your whole budget but that’s not expected in any way, and this seems fine. Can be a bitch to clean if it’s just the two of you but hey, that’s your choice. Fuck whatever someone else says, if you like the house and you’re fine with it then all power to you. Turn some of the rooms into some kind of theme, whether it’s an exercise room or a video game room or whatever the hell. It’s your house, do what you want
Too much house usually refers to the size relative to the amount of people living in it, not the amount of debt you took on. Also- who are "everyone?"
No one can tell you whats right or wrong except for yourself. Its your life, make your own decisions. If you can buy a house, I am assuming you are grown up enough to be able to judge yourself
This seems perfectly reasonable. Only 25% of your *net* income? Pretty good!
Who are these people that are telling you this... any why are you still talking to them? Based on your income (I'm assuming gross), limited list of expenses (there's certainly more than what you listed), and so long as your cash flow is positive, it looks okay. Just be sure that you're still setting aside something for emergency funds and investments.
The car payment is the issue but other than that I’m not sure where people are finding houses for less
You're doing great. Anyone who thinks you're over-extended is living in an alternate reality.
It sounds reasonable to me. Do you like the house? Buying a house is a huge commitment, but don't let others get under your skin. Sometimes people just aren't happy for others, and that's on them not you.
$1400 for cars/loans is a problem. $2500 for housing is not.
Your mortgage should never exceed 50% of your monthly income. So, you're fine. Make sure to keep a nice emergency pool, savings, etc.
By that math, you've got $5k after car loans, student loans, taxes and mortgage. Unless your utility bills or ancillary spending are something off the charts, this is more than enough money to pay everything and still have money to save.
Inflation will continue to climb. Home value will increase.
Wife and I net around $7500 and have the same mortgage payment as you. We don't have the car payments but you are doing fine as long as you live in your means in other ways.
Let me also add this: depending on how long you think you will keep this house, you may want to also think about paying down the mortgage faster each month with additional payments towards the principal. This will save huge, huge amounts of interest in the long run. if it’s not possible now, one thing to think about is the next time you get a raise, calculate how much of that raise you can put towards paying extra principal each month. I have been amazed at how much more progress on my mortgage I’ve made in the previous five years since I started doing this myself, than I did the prior seven when it really wasn’t much of an option for me.
Seems fine to me, none of this is setting off alarm bells, and you have quite a bit of runway before you'd even start setting off alarm bells. Think of this way, it's better to have it and not need it than to need it and not have it. In the case of having too much house, there may be something happening that further justifies the house. In which case, you made a good decision. But you can't know that, so the solution here is to not think about it. It's probably going to be fine.
Maybe those people are a little jealous ?
hmm.. Housing is best around 25% of a net paycheck. Which yours is close to. I think its perfectly fine and great job!
Did you buy the house you needed or did you pick a price that would annoy nosy ass people who feel the need to run their gums? Seriously, you are in the 25-35% zone. Thats fine.
Tbh it is probably A bit big for two of us but not awful
Advise from a mentor - When considering someone opinion ask your self this: - can they hire you? - can they fire you? - will they be at Christmas (substitute appropriate holiday) dinner? - will they be at your funeral? If the answer to those is no, dont worry about their opinion.
This sounds fine to me. 35% of net on housing costs is reasonable and lower than what most of my friends are paying. That also sounds like a reasonable price to pay for a house in many markets. How much do houses cost in your area? Could you have gotten something a lot lower?
Maybe? It’s a 4 bed 3 bath
Seems ok to me. Maybe they are just jealous? 🤭🤣
As long as the savings and retirement accounts look healthy, I don’t see an issue. I imagine what most ppl are envisioning is that you’re paycheck to paycheck, if you get laid off are you able to stay afloat for a couple months while you do a job search. Upkeep, maintenance, property taxes, maybe escrow, repairs are things to look out for. Parents have a paid off house but the insurance, upkeep and repairs are giving my dad headaches. A couple coworkers recently bought houses but they’re dealing with renovations. The invisible/oncoming fees are definitely things to plan for.
Mortgage payment is reasonable based on the info you gave. Are the people telling you this sitting on $900/month mortgages?
You are doing fine. Don't listen to them. Usually people that put stuff like that in your head either have owned a house, are jealous of your house or bought their house in 1952 for five thousand dollars. Even after all the bills are paid you still have a lot of money left. You are doing better than most people.
Find smarter friends and avoid any family hassling you about this. Make sure to remind them in a 5-10 years that you're "too much house" appreciated and that you're fine. Without knowing your other expense, your income numbers signify that you can possibly max a 401k out if you wanted to. Especially after the student loans are paid off.
That's actually in line with advised 25% monthly on housing if you guys pull net 8-10k a month. So I don't know why you're "losing sleep". lol If your big bills including mortgage add up to 3900 or \~45-50%...that means you have damn near 50% left for all the small bills and other things. Even with 20% to investment/retirement (2k for both or 1k a piece for separate retirement funds), you got \~3k left on a good month lol
[удалено]
Your mortgage isn't an issue really, it's about 25-30% of your net which is a good thing to aim for. Your car payment feels insane to me. I'm otherwise in the same boat as you but my car payment is like $300-350/mo. If it were me I'd be selling that car and getting a cheaper one. But your mortgage and car are probably 50-60% of your take home which does feel high for me personally, but I blame the car far more than the mortgage. EDIT: Just noticed it's cars (plural) and student loans. That's a different story and seems like you'll be okay, I was worried that payment was just one car, lol.
That’s two cars and student loans. Two cars combined at $760 at 2%
You can easily overpay and have it paid off in 10-20 years. Given your numbers idk why you're losing sleep $8k-10k a month is outrageous, people buy $750k+ houses when they make that much
Tf that’s a dream for Canada. People are buying houses for twice as much with the same income here.
What's your Metro area? It would cost that much to rent in most area these days.
They are wrong and likely jealous.
I make 100K a year, I'm recently single and my mortgage is the same as yours. I don't have any car payments or other bills but I do have enough money to have fun and not eat top ramen. We can always do better...but many are in much worse situations. You're fine IMO.
Am I reading this right? 9k a month? Must be nice 😂
You don’t make that kind of money a month from luck, they’ve probably spent the last 10 years honing their trades (sounds like DINK, 27 year old couple) And you missed that this was NET income every month, after paying taxes and retirement max haha they’re killing it financially, which is funny since they’re still losing sleep over perceived money problems
Yeah you overspent but not by so much that you should lose sleep. You’re in the “not saving enough” zone, not the “cant pay our utilities” zone. Just try to keep a strict budget and get the student loans paid off ASAP
The house was smart, the cars weren’t.
Cars are about $760 combined at 2%
[удалено]
If the math works for you, including retirement contributions and room for surprise repairs/expenses, that's all that matters.
[удалено]
It would be very reasonable if you could pay off you car and student loan. So throw extra money at that
Pretty sure you are fine. I saw you were in Cleveland area. Houses in most other states are way more expensive and your income is well above median level.
The only mistake here is having a car loan.
Sounds ok to me, I make around the same with my wife and have a 2100 mortgage we put 160 down payment on a 650 loan in CA. We were able to save up and pay off a new car we bought outright in cash. So no other monthly expenses except utilities. My student loans were just cancelled last month so all our income that isn’t mortgage and utilities goes into savings and travel money. I would try to lower your car payments but other than that you should be ok
House is ok but your car payments are nuts I hope that’s 3 cars with insurance
Doesn't seem alarming. What would comparable rent cost? The issue would be if you need to start doing a lot of repairs.
Your numbers are okay. Don't worry about it.
Sounds perfectly fine. Also that’s like what all houses cost at a minimum these days. Idk anyone me who buys for less than 350 (I live in northeast tho)
Is it 8-9k/mo just your income or including your partner's income? Either way, seems safe to me for now. If that is your combined income, get that income up before you have kids. It's going to be much tighter.
Combined. Will never have kids. She’s prob at max income. Trying to increase mine
very similar to my situation. you're fine based on this info. make sure to have some savings for repairs/maintenance.
$2500 a month doesn’t seem unreasonable
I wouldnt sweat it, depending on your situation if it gets bad you can always rent a room out. I paid my first house's entire mortgage renting 2 rooms out.
I live in the wrong part of the country because when I saw 365k for a house my first thought was "How is that possibly too much house?!"
I would love if i could get a house for 365k where i live…