Lexington, Concord, Lincoln, Wayland, Sudbury, Weston? (Boston, Lowell: sale, apartment complex, rental)

[Jacconn]

Don't forget that people (particularly higher income, dual earners) are having kids later in life. The people buying that $1M+ family home in the burbs because they're outgrowing their condo with the arrival of the 2nd kid and will need public schools in the next year are more likely to be mid to late 30s or even early 40s vs. very early 30s. And for these upwardly mobile couples, 5-8 extra years might mean a level or two higher on the corporate rung, school debt fully paid off, etc. Double that gap for dual-income. Young family might be young kids + more middle aged parents.

[sawyer2]

Is the 28/36 rule of olden days gone out the window? I would be nervous at anything over 20%.

[id77]

Originally Posted by bigfatdude

50% in housing costs? Sheeeeeeiiiit, and here we were thinking more than 25% of gross pay is a bad idea. That's not just house-poor, that's house-destitute!

50% is way too high and not common for owners (renters may be another matter). Even a standard jumbo mortgage is going to cap at 43% DTI load for all expenses, not just housing.

I'd guess it's in the 20-30% range for many, some lower, some higher. In our case, P&I, taxes, and HOA adds up to ~20% of gross. 401ks, HSAs, and other investments are still being maxed out.

[robr2]

Originally Posted by yesmaybe

You wouldn't really need to go to the Hartwell way in the AM coming from the South, would you? And in the PM you wouldn't want to take 128 S anyway.

It depends on traffic. Right now, the trip from Waltham is 18-22 minutes going either way in the AM or PM.

Using 2A in the AM, you will encounter traffic going to the other base entrance, the airfield entrance, Minuteman High School, other commercial buildings, and people using Wood to get to Hartwell. Rt. 4 to Hartwell is an alternate for everyone. In the PM, one fights with traffic departing the base on either route.

With their budget, I suggested Lexington itself. Why fight 128, 4/225, 2A on top of delays getting to the area? I know quite a few Lexington residents that work at the base or the Labs.

[yellowstatus]

Originally Posted by sawyer2

Is the 28/36 rule of olden days gone out the window? I would be nervous at anything over 20%.

It's a reasonable start with big caveats like any heuristic. I moved to Boston without a job for example, so certainly didn't make sense to me when buying in Cambridge. Prices were cheap, and I wanted to live close to the city.

[id77]

Originally Posted by Jacconn

Don't forget that people (particularly higher income, dual earners) are having kids later in life. The people buying that $1M+ family home in the burbs because they're outgrowing their condo with the arrival of the 2nd kid and will need public schools in the next year are more likely to be mid to late 30s or even early 40s vs. very early 30s. And for these upwardly mobile couples, 5-8 extra years might mean a level or two higher on the corporate rung, school debt fully paid off, etc. Double that gap for dual-income. Young family might be young kids + more middle aged parents.

Also this. I know people younger than me who are already grandparents while I'm barely the parent of a toddler. I'll be attending my kid's HS graduation in my 60s.

Following a typical 7-8% YoY gain in investments, $100,000 saved by age 30 grows to around $1.5 million by age 70; $100,000 saved by age 40 is about half that. And, people who started saving/investing heavily in the 2000s (late X'ers and early Milennials) are coming out much, much further ahead. Even money sitting in a boring old S&P ETF has tripled since 2011, and that's not even factoring in the compounding dividends. Since 2003, it's almost quintupled.

It's not about the income, it's about the assets.

[yesmaybe]

Originally Posted by id77

50% is way too high and not common for owners (renters may be another matter). Even a standard jumbo mortgage is going to cap at 43% DTI load for all expenses, not just housing.

Oh I don't know about that. Lenders really don't GAF anymore. They can just sell the mortgage. I looked at a random mortgage broker and it sounds like 50% is the real limit in most cases but they made it sound like even that wasn't a hard limit.

[robr2]

Originally Posted by sawyer2

Is the 28/36 rule of olden days gone out the window? I would be nervous at anything over 20%.

It's still a guide but not an absolute.

Originally Posted by id77

50% is way too high and not common for owners (renters may be another matter). Even a standard jumbo mortgage is going to cap at 43% DTI load for all expenses, not just housing.

I'd guess it's in the 20-30% range for many, some lower, some higher. In our case, P&I, taxes, and HOA adds up to ~20% of gross. 401ks, HSAs, and other investments are still being maxed out.

That 20-30% sounds common. Most of these million dollar house buyers aren't putting 5% and payment PMI as well. A million dollar house with 20% down results in a payment of $3600/month. Current tax rate adds $1200/month and let's say $200/month for insurance. $5K a month at the 28% of gross income works out to under $215K annual salary. That's not out of the realm for the Boston area.

[id77]

Originally Posted by yesmaybe

Oh I don't know about that. Lenders really don't GAF anymore. They can just sell the mortgage. I looked at a random mortgage broker and it sounds like 50% is the real limit in most cases but they made it sound like even that wasn't a hard limit.

Except keep in mind jumbos are also non-conforming mortgages, so they're NOT backed by Fannie/Freddie. Banks typically have tighter reigns on who gets the jumbos as a result. 10% down minimum (20% for some banks like Chase), tighter DTI, and reserves are common.

[hken]

Originally Posted by bigfatdude

50% in housing costs? Sheeeeeeiiiit, and here we were thinking more than 25% of gross pay is a bad idea. That's not just house-poor, that's house-destitute!

Sorry I was thinking 50% of net pay...you are right it's materially lower % based on gross which is how mortgage qualifications are set.