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Daycare in the Chicagoland area (at least the kind you'd want) starts at around $400 per week per child for babies (it decreases with age). If your wife plans to continue working you will also have to consider things like school vacations and snow days etc over the long term. Of course this also assumes your children will be born healthy and have no complications, our deposit fund has been vastly depleted over the last year by a complicated pregnancy and then neurosurgery and accompanying doctors visits for my son. I never advise anyone to stretch themselves financially before they have their kids. You may think your potential future earnings will cover it but you can't be sure. Things happen and to lose all of your disposable income now when you really don't need it is a big shame.
Go with your head. I've seen too many people say that THIS is their forever home, only to get the bug and move again in three years. Situations change. Wants/needs change. Just be smart with your money and get yourself a modest first home. Don't worry about rates or prices. If you buy it right, it can be a great investment to fund your future home.
I've got folks in their 60's that STILL move every three years. Once you own a home, you'll realize it doesn't have some of the things you really want or need and you'll move. This will happen a few times in your life.
Personally I think you're asking for a disaster if anything in your life goes wrong. Get out of debt which includes your student loans, save up a huge bundle of cash and buy a modest home you can easily afford on 1 salary.
Personally I think you're asking for a disaster if anything in your life goes wrong. Get out of debt which includes your student loans, save up a huge bundle of cash and buy a modest home you can easily afford on 1 salary.
Be conservative and pay yourself 1st.
So are you suggesting to rent while I pay all debts for the next 5 years?
Interesting how I don't think 99% of Americans subscribe to this idea of paying everything off before buying a home.
This may be too conservative for me. Might as well save cash to pay for a house outright without a mortgage.
So are you suggesting to rent while I pay all debts for the next 5 years?
Interesting how I don't think 99% of Americans subscribe to this idea of paying everything off before buying a home.
This may be too conservative for me. Might as well save cash to pay for a house outright without a mortgage.
I believe your %'s are way too high. It may be 99% of your generation but not your parents or grandparents generations.
Loved the part in your OP about buying your dream home because you deserve it. That and high debt is several of the reasons we are in the economic mess we're in today.
Borrower is slave to the lender. Yes, get rid of your debt then buy a home.
So are you suggesting to rent while I pay all debts for the next 5 years?
You're 5 years away from paying off your debts?! Waiting is sounding better and better.
Quote:
Originally Posted by pinipig523
Interesting how I don't think 99% of Americans subscribe to this idea of paying everything off before buying a home.
You're wrong. In most American families I've met that have sizable assets they've worked for, the decision-maker(s) realize they need to avoid or pay-off high- and medium-interest debts as quickly as possible, and try to invest their money such that it (statistically) earns interest over time. Of course, intelligent people can disagree about how much risk to accept and what are the best investments to make at any one point in time.
Personally, I've always bought my cars outright, and over time I've moved up form beaters to luxury cars.
Quote:
This may be too conservative for me. Might as well save cash to pay for a house outright without a mortgage.
That would probably be a poor financial decision, because once you have a certain % of a house's value, owning is cheaper than renting. That's actually when I made the transition to owning my first home.
Ironically, I'm living in a million dollar house, mostly because it saves me money over living in a cheaper house!
I believe your %'s are way too high. It may be 99% of your generation but not your parents or grandparents generations.
Loved the part in your OP about buying your dream home because you deserve it. That and high debt is several of the reasons we are in the economic mess we're in today.
Borrower is slave to the lender. Yes, get rid of your debt then buy a home.
I'm not going to sugar coat it but I do deserve it. I'm not talking about stretching myself and having to work more than 40 hours a week... I'm talking about shrinking all loans into the shortest pay off periods possible. 10 for student loans and 15 for a house.
Even then I'm still saving money at the end of the month. If I did what the majority of Americans do, I'd be looking at 30y mortgage and a 30y student loan payoff and I'd rack in near 10k per month in savings.
I'm not starting late, we are still early in our careers. There's a difference between a 40 something picking up a 800k note and a 30 year old... The income potential is a decade greater.
I'm not going to let this housing crash pass me by and I'm not going to go without taking some calculated risks. Those who succeed take risks and those who strive to be mediocre can play it safe.
Why go to school for 12 years after high school when at any point I could have been injured and had nothing but student debt under my name?
Yes, your plan is financially sound. But there's a difference between being extravagant and being calculating.
If a person who makes 100k is perfectly fine buying a 200k home, why not us with a 500-800k home?
Obviously people have different opinions, but I don't think you need to be debt free to buy a house. When we bought, I still owed on a student loan and had one more year on a car payment. I just think think that because you do have some debt, it might make sense to buy the more modest home now. Clearly, we are in different tax brackets, but to me, a 3,800-square-foot house for what right now is two people sounds perfectly reasonable, even after you add a couple of kids. I know that you have everything mapped out, but things don't often go exactly as you want. As someone said, your wife...or maybe even you... might want to stay home for a few years when you have kids. It seems to me that by buying the larger home, you immediately remove that as an option. Sure you expect to get large raises and make partner, but maybe you won't.
I think you and your wife are in a very lucky position. For a lot people, both people do have to work to be able to afford something larger than a 1,000-square-foot townhouse in a skeevy part of town. You have the option to get something very good (the cheaper house) without breaking the bank. Just my two cents.
Are you really going to use the extra space or will it end being rooms you never go in except to clean? I think sometimes "dream" houses are better off as being just that.
The other thing is while you may be able to afford the mortgage on the larger home, the other costs of owning it will still be in line with what they were when the house was priced higher, and will continue to rise as such. While it may be a $1.5m home for $800k, the cost of owning it is still as high as it was when it was a $1.5m home. A lot of people thinking they need to 'take advantage of the current market state' are blissfully unaware of this fact and it will end up resulting in the crash lasting much longer than it should.
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