re: Am I buying too much house?

Im buying in Shreveport.

I'd rather do the 15 year option, but I don't think I would fee comfortable doing it on this amount of money.

Thanks for all the feedback.

I was in an almost identical situation 2 years ago. It's not a bad decision if you have a stable job and your hopeful wife plans on keeping her job in the short-term. Just prepare yourself for the fact that you will be house poor. Also, don't discount how fricking expensive it can be to furnish and decorate a house. The down payment is the first whammy, but furnishing a house is death by a thousand cuts. Our savings account is just now starting to recover.

Yea, Ive thought about all the expenses on furnishing it. I won't need to do any upgrades, repainting etc. but I'll have to buy lots of other furnishing crap.

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Mine went:

20% down payment
New HVAC system and ductwork
New roof
Wedding
Repainted interior
Mostly new furniture, art and other shite

The first three all done within a couple weeks, that was a rough month for my bank account.

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Hello twin.

Ya, the first year of home ownership sure is fun. I knew going into it since its why we got the house at the price we did, but writing checks for an HVAC isn't the most rewarding feeling like a cosmetic overhaul.

Still waiting to put in my yard.

SO. MUCH. GRAVEL.

A few thoughts:

Wait until you're married to buy the house.

If you aren't going to wait, then have her sign the title and apply for the mortgage as well. This is a true sign of respect and love for your future wife if you ask me. This means no decision can be made on the home-refinance, sale, etc-without her approval and signoff. Will feather her emotional nest if you ask me.

Even if her credit is poor or income is not there yet, have her sign the title. It'll give her some peace of mind. You're welcome

Figure out your takehome pay. Never use your salary. Figure out your take home after your paycheck hits the checking account. Add up the take home over the entire month.

Use that number and then multiply by .25 to .35 MAX. Some may goose that number higher but you never want your house note to be more than that amount if you'd like to be comfortable. More than likely, you will very quickly accumulate additional expenses whether its child care, daycare (in the future), automobile, etc. Ancillary bills like car insurance (for her) and HOI for you need to be factored in as well.

It's also a good idea to look at life insurance costs while you're going through this. With this type of income and this type of house, buy some to protect the future Missus.

But if your house note fits within the parameters of a quarter to a little more than a third of your monthly take home pay, you're good to geaux IMO.

If not, you may be biting off a little more than you can chew. It's always always always better to buy less house than too much. Owner Occupied Residential Real Estate is almost always an appreciating asset. One you can expect-in a decent neighborhood-to appreciate 3-5%/year in a healthy economy.

Buying a little less house now will allow you the flexibility later to move up into something else if you did underestimate your needs in this instance. It'll also free up more of your take home pay for whatever else you want to spend it on.

Finally, never take the 15 year amortization. Take the 30 year mortgage, and then have your broker run a 15 year amortization schedule. If you like the idea of paying off early, use one or two options:

Pay using the 15 year schedule your broker prints out for you (and maintain the flexibility in case of of a potential economic hardship to drop back down to a much lower 30 year note)

Take your monthly note (PITI-Principal, Interest, Taxes and Insurance) and divide it by 12. Take that number and add it to your monthly note each month, and indicate specifically to your mortgage servicer that this extra be applied directly to principal only. Obviously you'll end up making 13 payments per year. This has typically knocked 10-13 years off most terms when I ran amortization schedules on these amounts back in the day.

Good Luck!

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Personally, I think 2,500 is way more house than 2 people need

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i guess you wouldnt like our 3200 sq ft house for two people and a cat. No chance of kids.

The one caveat is to be in the hood we wanted to be in, we had to get a house this big. or a condo and we didn't want a condo.

we knew it was too big when we bought it. But we fell in love with it, and it had all the features we wanted in a house plus the right location. We looked at 20-30 houses, and this was the only one we "wanted" there were a few that we could have been happy in. After we saw the pics, we knew this is the house we would buy.

we have multiple empty closets.

Both the wife and I do work from home, so at least all of the bedrooms get used.

Thanks again guys. It's fitting better into the budget, the more numbers I crunch. I'm actually pacing to make almost 140k. My net check is thrown off because I've been making up for some lost time to retirement accounts.

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If you aren't going to wait, then have her sign the title and apply for the mortgage as well. This is a true sign of respect and love for your future wife if you ask me. This means no decision can be made on the home-refinance, sale, etc-without her approval and signoff. Will feather her emotional nest if you ask me.

Even if her credit is poor or income is not there yet, have her sign the title. It'll give her some peace of mind. You're welcome

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I don't agree with this one bit. If you're putting up the whole down payment by yourself and yall aren't married, then it should only be your house.

I just dealt with a family member and their 15+ year live-in SO breaking up. The family member had probably contributed 95% of the equity in the house but the SO was on the title for 30%. The SO wanted 30% of the equity out.

Just not worth it to put up your money and entitle her to a large portion, IMO.