I’m pretty conservative with money and I think your combined salary is too low to afford a house at $400k with an interest rate a 7%. Your mortgage shouldn’t be more than 2 (ideally) to 3 (HCOL) times your annual salary.
You’re not saving enough for retirement now and if you have kids you will have expenses for childcare, supplies, 529, etc. Also, you have to budget for necessary home repairs. I spent over $30k on necessary repairs my first year of home ownership.
You need more money saved to buy a house. Even if you only put 5% down, you’ll need money for closing costs and money for repairs/emergency fund. Having only 10% of the purchase price to cover that is not enough. I’d save for longer and hope the housing market continues to head down before buying.
VorlonConsu t1_iy8y4rx wrote
Reply to Buying a house next year, what’s a reasonable budget for mortgage payment? by ProspectiveHomeBuye
I’m pretty conservative with money and I think your combined salary is too low to afford a house at $400k with an interest rate a 7%. Your mortgage shouldn’t be more than 2 (ideally) to 3 (HCOL) times your annual salary.
You’re not saving enough for retirement now and if you have kids you will have expenses for childcare, supplies, 529, etc. Also, you have to budget for necessary home repairs. I spent over $30k on necessary repairs my first year of home ownership.
You need more money saved to buy a house. Even if you only put 5% down, you’ll need money for closing costs and money for repairs/emergency fund. Having only 10% of the purchase price to cover that is not enough. I’d save for longer and hope the housing market continues to head down before buying.
I’d agree with this analysis I just saw today:
https://finance.yahoo.com/amphtml/news/much-money-earn-annually-comfortably-181013084.html