I am planning on taking out a 10:1 ARM at 3.2%. The split was 3.2 vs 4.8 for a fixed 30. House is 425K purchase price. I plan on putting 130K down for loan amount of 295. Monthly payment PITI comes to around 1900. To hedge against the adjustment at year 11 and take advantage of teaser rate, I plan on paying as a 20 year loan for PITI of 2370.
Combined take home pay after taxes and maxing out all 401K and roth 9500$. Biggest expense outside of mortgage would be full time daycare totaling 3200$/month. This cost will reduce to 2K/month in about 2 years.
If one of us loses our job in upcoming recession, would obviously take out the 3200/month if can't get employment quickly, leaving 4600-4700$ in monthly income.
My last mortgage was 1400 monthly, so I feel a like a doof spending this much on housing, but I do think it will be a nice place to live and enjoy.
Would other risk averse people take on this kind of payment? Is this living beyond my means?