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We're looking at homes in the Westchester/Rockland area and are considering houses in the $700K range with taxes about $12K. I make about $170K and am planning on putting down 20% ($140K). I anticipate a monthly mortgage payment of about $4500. I'm concerned about whether or not I'll be getting in over my head financially. I know that, for now, I'll be foregoing the 401K and the college savings, but my wife will be going back to work (teacher) in a couple years when the kids are in school so we'll be much better off at that time.
Since this site is anonymous, I was wondering if any of you would be willing to share what you pay for your mortgages and what your salary is. I thought that this would give me a good idea of what kind of house I can afford. I hope I'm not over-stepping my bounds with this question, but considering the nature of this board I thought it might be a good conversation starter on the sublect.
I think that it depends on your standard of living. Some people are comfortable living frugally, cutting coupons, turning the heat down, forgoing vacations. Others are not. It also depends on what your other expenses are and if you have $$ in savings or in investments to hold you over in case something happens. Then, there are unexpected expenses such as car maintenance, summer camp, weddings etc! These are all things that come up
I think it will be very hard in the beginning but will get better once your wife starts working again. I don't think you don't make enough $$, I would be hesitant to have such a high mortgage ($530K) on 1 income. Would you consider purchasing a starter home/condo at a lower price point and renovating/adding/moving when your wife starts working again?
you make good money and you can't figure out how much house you can afford??
From your post you sound like you KNOW that it would be a bad idea to do what you're probably feeling pressure to do. After all it's the american dream right??
sounds like you want someone to tell you that you should buy as much house as possible and that it's ok to stretch every month to make the pymt
there is ample evidence that that approach doesn't work or at least may not be the best thing to do
If I were in your situation I would first see what local rents go for then I would see what I can buy for 3-3.5x your annual salary. If there isn't any property in the area that meets that requirement (~600k there should be!) then rent for a couple of years and let the housing market get closer to fundamentals.
it's on it's way, no rush, I would rent for a while and save a little more, how can that be a bad idea??
To be honest , the housing payment sounds high for the income... We try to stay at about 30% of after tax household monthly income.. The other thing you have to factor in is other payments that seem to be much higher in westchester..
I am researching westchester and based on what my friends who live there tell me, its quite expensive.. e.g., 200/qtr for commuter parking ( versus 50 in chicago), 1000 for 1 kid in weekly swim class for 6 months , monthly train pass to city about 200-300 depending on where you live....
Seems like all the day to day expenses are also 50% higher in NY.....
Would suggest trying for lower payment or saving for another year while renting...
We recently moved from Scarsdale to upstate NY, and when I think back on our 6 1/2 years in Westchester, I can't believe we weren't bankrupt by the time we moved.
Not only is everything more expensive in Westchester, the costs just keep going up and up. You will have to factor that into your planning. Every year we'd get a message from our mortgage company, telling us that we had an escrow shortage (due to the rising taxes.) We'd have to pay out $1,000-$2,000 up front and then still have a higher monthly mortgage payment as well.
We were not as well off as you--I was only working on a very part-time basis, and my husband made about $125,000 a year. At the time we bought our house, I was working full time and made almost as much as he did. Two years after we moved in, my job was eliminated in a restructuring and we decided to see if we could manage on one income with some minimal help from my part-time work. Well, we couldn't really do it. We had to dip into savings (fortunately, I had gotten a fairly substantial severance payment) every time something came up like orthodontia, summer camp, etc. We refinanced twice and our monthly mortgage payment was still almost half of what my husband earned every month (e.g., almost one full paycheck.) Our taxes started out at about $7000 a year and were up to almost $12,000 a year by the time we left. DH's monthly commuter ticket was over $200. You get the picture...
So I guess I would just say to factor in all of these things that could happen (job loss, illness, etc.) and things that most probably will happen (ever-rising taxes and other expenses.) Make sure you can still save something every month so you have a cushion in case you need it.
You might want to consider buying your home in a less-expensive area of Westchester, like Peekskill, while your kids are still small. I think the lower grade schools there are acceptable. You could move to a better district once your kids are older and you have more income coming in. Just one thought.
My husband and I make around $175k combined now, and our mortgage payment is around $2800. Taxes are $700/mo, for a total of $3500. Are you including taxes in that $4500 monthly payment?
I agree with the other posters about the mortgage to the income ratio being a bit high for you. Why do you need to spend $700K? How about looking for something cheaper in a good school district, say $500K and has the space requirements you need but just needs to be cosmetically updated. Such deals exist if you look. You could spend $50-$75K and make it the way you want and be better off financially. There is a show on HGTV with this kind of idea in mind called Hidden Potential. Just a thought, good luck
I agree with the other posters about the mortgage to the income ratio being a bit high for you. Why do you need to spend $700K? How about looking for something cheaper in a good school district, say $500K and has the space requirements you need but just needs to be cosmetically updated. Such deals exist if you look. You could spend $50-$75K and make it the way you want and be better off financially. There is a show on HGTV with this kind of idea in mind called Hidden Potential. Just a thought, good luck
Good school district in Westchester. $500k spells 2 things. Tiny or Handyman special. $600k can squeak out something decent. If your overall housing costs are 1/3 or less of your gross, you should be fine.
go to 5 mortgage brokers see what they will give you and then average it out and then take 20% off that and you will be fine......you might even be able to go out to dinner once a month...........
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affordability question...
