Can i afford a $650k house

Nope. He and his wife combined. I calculated 14 years at 9%. Why are you arguing with math and with the OP?

ponyup wrote:

YOU are a bragging little B*T%H. You didn't kow you could afford this? Please.

Yeah, exactly. nice troll job.

You are getting a lot of annoying advice from people who don't understand the Boston housing market.

1 - You absolutely can afford a house in that price range. You could even go a bit higher and put a bit more down if you found the perfect place. That said, on your income and a 30 year fixed this is probably about the right price point for you.

2 - Depending on where you look it may be hard to find a lot in that range that doesn't need a TON of work. Depending on your parameters and your work locations you could be in for a horrible commute which does matter in this place.

3 - Yes. The market has probably peaked and will flatten out but I don't see any major declines on the horizon. There is just so much money here with the academic institutions, pharma, tech, healthcare that there will always be demand.

Good luck on your hunt.

If you have to ask, you either A.) Can't Afford it ... Or B.) Just here looking to brag about the wealth you've accumulated.

Sliding Scale wrote:

Financial wiz wrote:

Dude, if you can afford this what drugs you spending your money on? I have a house of similar value with a salary of 110k and my wife stays at home with the kids. We live within our means, cook at home, stream Hulu rather than have cable, etc. and still have enough to put money into 401k and have about 1k left monthly after bills.

Yes, you can do it but you aint getting that boat.

Agreed, I am surprised at how many say go for it. It seems like $400-450k would be a more appropriate price range for you to look at given your current income. Just because you can get the loan does not mean that you should.

650K seems more than appropriate for them. $200K in home equity means they wouldn't have to touch mutual funds although they could. I don't know property tax rates in that part of the country, I'll assume 1% since I'm too lazy to google it, but their monthly payment to an escrow account would be less than $3k a month if they put the $200K into the new house. Considering they make over $200K a year and have no bad debt that seems very reasonable.

YOU COULD TOTALLY DO IT BRO.

This has been my approach in life (the spreadsheet projections) and my projections turned out to be surprisingly prophetic.

Hmmmmmmm wrote:

Both of us are 35

Me: $100k +25% bonus + some other long term incentives that aren’t consistent but could be between $10k and $30k annually

Wife: $85k

No CC debt - pay off monthly

$200k in current home equity

$12k car loan - 2 years remaining

No other debt

800+ credit score

$750k in 401k combined

$120k in mutual funds/stock

$25k in cash

Any other questions I’ll answer.

Can I do it?

New house has annual property taxes of $7,500

This is in a Boston suburb inside of 128.

You could afford a house at close to double this price - but you already knew that.

Advice - pay off the car asap, increase the budget and buy in the city, ESPECIALLY if you work downtown. Don't listen to the degenerates here - no one ever willingly chooses the suburbs, NO ONE.

If this is serious, a lot of people can afford that house; however, you have to make sure your wife is a great person and that she doesn't spend all your money like crazy on useless things. She might even divorce-rape you in a couple of years.

I understand this is a big decision, so I would advise you not to over-spend and to not listen to materialists or bankers.

Shouldn't it be "Can WE afford..."

You and your wife are a team. Act like it.

If u have to ask then u cant

Grenio wrote:

Build a spreadsheet with monthly costs for the next 10 years. Make sure you include everything:

Once I started doing this, I realized my life cost more than I thought. My guess is that if you do this, you will see that you can afford that house, and it's probably a good idea, but there might not be a big monthly cushion or long-term cushion.

Good advice. We've decided to go a different route and will move within a year. We're not sold on the area in general and feeling like you're constantly strapped because of your house is pretty draining. I honestly don't understand how so many people choose to stay in CT, it's crazy expensive. For example, compared to the OP's possible $7.5K taxes on a $650K house, we pay $10K on a $450K house. Add car, income, and sales taxes on to that (and now they're talking about tolling all major highways), and it's rough. Oh well, you live you learn. I consider us lucky in that we will very likely have the option to leave. We could likely make it work long term (with additional income form my wife and raises/promotions), but we're don't think it's worth it.

I actually think the Boston housing market still has room to grow. The city is still adding jobs (many of them high-paying). In my field (pharma/bio-tech) Boston/Cambridge is SUPER hot right now.

Hmmmmmmm wrote:

Both of us are 35

Me: $100k +25% bonus + some other long term incentives that aren’t consistent but could be between $10k and $30k annually

Wife: $85k

No CC debt - pay off monthly

$200k in current home equity

$12k car loan - 2 years remaining

No other debt

800+ credit score

$750k in 401k combined

$120k in mutual funds/stock

$25k in cash

Any other questions I’ll answer.

Can I do it?

New house has annual property taxes of $7,500

This is in a Boston suburb inside of 128.

you can afford a $1.25 mil house.

you're very frugal with the 401K. nice work.

my wife and i make the same as you but have a $1.1 mil house with $12k prop taxes and 'only' have $250k in retirement. I feel good about it. Our house value goes up 100-200k every few years though, so it's like a retirement account in a way.

you're very financially cautious....so I'd say you can easily buy that house. Probably 2 of them...

bs on 401k wrote:

Calling BS on 401K. Nobody with those salaries could have that much in 401K at that age.

You are wrong.

The Dow has averaged 11.214% return the last 10 years, so not including even 3 years of their contributions, they could have EASILY reached what they have in their 401ks even if right on the average during that time.

18% of both of their current incomes is $33,300. The can each put in 18% of their incomes, AND they can STILL accept any company match during that time that would take them above the individual allowable. If they DIDN'T have $750,000 in their combined 401ks now with those salaries, that would be a bad thing.

Very doable, and if they did better than the Dow, they could have done even better (of course we don't know what percentage they were putting in early on). This is an average to potentially a little better than average 401k return during that time.

One of the most important questions has not been answered. What are the spending habits of you and your wife? Are you the frugal type? Or, do you spend money like an idiot? i.e. $20 lunches...fancy clothes...wife's hair salon....bar spending..expensive trips...etc..

Mr. Inspector wrote:

One of the most important questions has not been answered. What are the spending habits of you and your wife? Are you the frugal type? Or, do you spend money like an idiot? i.e. $20 lunches...fancy clothes...wife's hair salon....bar spending..expensive trips...etc..

Normally those are good questions, but they have $750,000 in their 401Ks, $200 in home equity, no credit card debt, $120,000 in non-retirement mutual funds, and $25,000 in cash. With their incomes (which are good but not crazy), they could not be in this situation if they spent wildly.

Now, they COULD change their behavior and begin to do that, but there is evidence that up to this point they do NOT do that.

You could easily afford it, but if you are as financially astute as you claim to be, why would you? Real estate is a terrible investment compared to what you claim to have been making in the market to have your 401K at that point even though you do not make that much (unless you inherited money or got a bunch of help from your parents to pay for college and maybe even grad school based on your income level) and I am assuming you made less earlier in your career. Most people do not contribute 18% early on because they are paying off loans and I am pretty sure your income hasn't been at that level since you graduated. If you are being honest, props to you, to have that much saved at your age with your limited income is an accomplishment.

Still waiting to hear what crap town it is

He isn't looking to buy his primary residence for investment purposes. He wants to purchase a nice house where he and his family will spend the majority of their time. Why would you underspend? I guess you would never go on a vacation or go out to dinner because there is no return at all on those expenditures.