spousal disagreement over how much house to buy

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Go Blue 99
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spousal disagreement over how much house to buy

Post by Go Blue 99 » Wed Jan 04, 2017 3:28 pm

Has anyone here disagreed with your spouse over how much money to spend on a house? How did it turn out?

During our current house search, I've placed more importance on location. I like access to highways, major job centers, dining, retail, etc. My wife has placed more importance on new construction, floor plan, and interior finishes.

We've toured a home that hits all of the check marks for both of us. It also has other nice attributes such as being next to a large park and being in a top school district. This is a "wow" house for both of us. The issue is, even after putting 20% down, the PITI + HOA would be a whopping 23% of our monthly gross income. We make just over $200k and have no debt, so there would still be plenty of money left over. But we live in MCOL so this isn't an area where you need to spend 23% of gross.

I've found nearby homes that are 10 yrs old, hit most of our desires, and would only be 18% of monthly gross. Wife says they are pretty nice, but I can tell she wouldn't be overly excited to buy one of those like she would with the new construction house.

The Boglehead in me wants to get the cheaper house (or another home in that price range), which would save us about $800 a month in mortgage payment. I tell my wife that's $800 that could otherwise be spent on vacations, kids' expenses, cars, etc. She understands that but thinks we can still pull off the pricier home.

Another option would be me sacrificing on location, and buying a new construction home in a farther distance. This would add about 15 min to each of our commute times but lower the price.

I appreciate any advice. Is this a situation where "happy wife, happy life" applies?

JGoneRiding
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Re: spousal disagreement over how much house to buy

Post by JGoneRiding » Wed Jan 04, 2017 3:32 pm

I wouldn't sacrifice on location. New construction can have issues and so no guarantee of problem free. Plus in some ways it costs even more because you need new finishings and lots of "new stuff" to go with the brand new house.

No matter what houses settle, at least at 10 yrs you have an idea of where how much.

littlebird
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Re: spousal disagreement over how much house to buy

Post by littlebird » Wed Jan 04, 2017 3:36 pm

This isn't what you asked, but I see the being "next to a large park" as a potential problem rather than an unalloyed positive. Parks attract teen-agers late at night as well as serving as the venue for loud concerts and events, sometimes all day and looong into the night.

fishmonger
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Re: spousal disagreement over how much house to buy

Post by fishmonger » Wed Jan 04, 2017 3:37 pm

Tough call here. My wife and I just went through a similar exercise. We were in an old farmhouse that needed a serious renovation as our kids get older. We ended up shopping for a house instead and spent more than I would have liked (but still less than our old place + the renovation). In our case, my wife truly loves to be home, have family/friends over for dinner, and generally just hang out. She could care less about the car she drives, getting her hair done, does not buy shoes, jewelry, clothes, and other things that some wives can blow thousands on over the years.

I don't know enough about your financial situation to comment on the price/income. But if you went with a less expensive house, in a year would your wife be wanting to renovate/update? Nothing personal, but something to think about. That "cheap" house may not end up being cheap at all...

corysold
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Re: spousal disagreement over how much house to buy

Post by corysold » Wed Jan 04, 2017 3:39 pm

The closer house saves you 20 hours of total commuting time a month for $800. Is it worth $40/hour for you to avoid that and have that time together, assuming the bigger payment doesn't slow your other saving goals?

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sdsailing
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Re: spousal disagreement over how much house to buy

Post by sdsailing » Wed Jan 04, 2017 3:41 pm

Not sure what I like less: new homes or HOAs.

Chadnudj
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Re: spousal disagreement over how much house to buy

Post by Chadnudj » Wed Jan 04, 2017 3:43 pm

23% of gross pay (when you have no other debt and steady jobs) doesn't seem like a red flag to me at all for a place that checks off all of your list....particularly when the other option is just a 5% reduction in that amount and would require you to oversee renovation work/deal with the inconveniences of the factors it did not include. Yes, having a bit more to save for early retirement and/or an extra vacation or so a year would be nice, but you spend the VAST majority of your time in your home as a family -- I wouldn't look at that as a major overpay, particularly if you lock in a good interest rate and watch as inflation (hopefully) keeps your housing costs down and fixed over time.

Go where you (and just as importantly, your spouse) will be happiest.

bloom2708
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Re: spousal disagreement over how much house to buy

Post by bloom2708 » Wed Jan 04, 2017 3:48 pm

How many houses have you looked at? 5, 10, 50?

Humans are easily distracted and tend to fall in love with a house quickly. Perhaps put it on the top of your list and then keep looking. Find a way to stay arms length and delay the decision by looking for something even better.

I like the time savings of the shorter commute. Do all houses have an HOA in the area you are looking? % of gross income, you should be fine. Although $800/month is a pretty big difference.
"We are not here to please, but to provoke thoughtfulness." --Unknown Boglehead

delamer
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Re: spousal disagreement over how much house to buy

Post by delamer » Wed Jan 04, 2017 3:52 pm

Is the 15 minutes each way, or round trip? Sounds minor, but 30 minutes a day for each of you is a much bigger trade-off than 15 minutes. If it is 15 minutes round trip, than consider the farther-out house.

23% is not an outrageous amount for PITI plus HOA. Is the $800 before or after any tax savings?

Take a serious and realistic look at your employment, both in terms of job security and whether you expect your salaries to just keep up with inflation or whether you may receive a salary bump or promotions in the near future. If your job security isn't great and there are no pay increases expected, then think more conservatively. If your job security is high and a promotion is expected, then be less cautious.

bigred77
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Re: spousal disagreement over how much house to buy

Post by bigred77 » Wed Jan 04, 2017 4:04 pm

Good location, new construction, top school district, next to a park, PITI less than 25% of gross income and you have 20% to put down. What's the problem? Buy the house and enjoy it!

Btw... is 23% of gross assuming a 15yr or 30yr mortgage. It wouldn't change my recommendation to buy it either way but if it's assuming a 15yr mortgage than its a no brainer.

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KlingKlang
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Re: spousal disagreement over how much house to buy

Post by KlingKlang » Wed Jan 04, 2017 4:14 pm

I'm unclear on whether your "new construction" dream house is already complete or have you just toured a model home in the development? Be aware that waiting for a developer to build a new house for you is fraught with delays, cost overruns, and not getting what you ordered. What is the actual price for the house, is it negotiable, and if it isn't built yet what guarantees do you have that it will be built on schedule and within budget?

I also agree with littlebird on the "large park" situation. You may want to check if any events are scheduled or just go on a weekend night and park in your car for several hours to gauge the noise and activity level.

alfaspider
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Re: spousal disagreement over how much house to buy

Post by alfaspider » Wed Jan 04, 2017 4:29 pm

YMMV, but at least around here, new construction tends not to be a good investment. Even for high end houses, developers tend to throw 'em up cheap and quick and then just make 'em purdy on the outside without any regard to whether the house is actually well built. Most contractors need to be watched like a hawk to keep them from cutting corners, and nobody is watching when they are building to spec.

On top of that, buyers end up paying a premium for new construction over and above even a fairly new "used" house that they almost certainly won't make up in resale (but will have to pay in additional property taxes).

alfaspider
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Re: spousal disagreement over how much house to buy

Post by alfaspider » Wed Jan 04, 2017 4:31 pm

littlebird wrote:This isn't what you asked, but I see the being "next to a large park" as a potential problem rather than an unalloyed positive. Parks attract teen-agers late at night as well as serving as the venue for loud concerts and events, sometimes all day and looong into the night.
Depends on the type of park and what is meant by "large." I live close to a medium-size park and it does not attract teenagers except for daytime basketball games and is not set up for loud concerts and events other than a neighborhood barbecue. It's an unmitigated positive since we do not have a large yard of our own.

Rodc
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Re: spousal disagreement over how much house to buy

Post by Rodc » Wed Jan 04, 2017 4:41 pm

Has anyone here disagreed with your spouse over how much money to spend on a house? How did it turn out?
Yes. Wife often commented on why can't we live in a big fancy house like her friends. She really did want to buy the million dollar house.

Or house is older but in very good shape and reasonably updated, but not gold plated. It is a little small at 3 bedrooms, 2 baths, 2000 sqft. But we fit ok. FWIW: the location is very good, schools great, 1.5 mile commute for me so I was always able to come home to get sick kids from school, etc.

I bought the house a long time ago when I was single and price was low. House prices here have soared. Buying a house to gain a bedroom and garage, even if less upgraded would have doubled our mortgage at least, and now would mean triple the mortgage. Not to mention increased prop tax and maintenance.

In 2009 it looked like she was going to get her hours cut and duties reduced such that she would lose 60% of her income.

Her friends at work were very upset for her - how awful!

Then she realized I was right all along to keep fixed costs low. She could take a 60% pay cut and while we might save less and take less expensive vacations, she was not going to lose a minute of sleep having to worry. We would be completely fine!

Then I looked like a genius and she was happy with me.

Also, we are now less than two years from being empty nestors and the house size will be just about perfect.

*******************************

On parks, I suppose it depends. I am about a half mile from a National Park (small, not talking about Yellowstone), love it and would be even happier to walk out my backdoor into the park.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

Inframan4712
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Re: spousal disagreement over how much house to buy

Post by Inframan4712 » Wed Jan 04, 2017 4:56 pm

You can afford, it meets your needs and she wants it so why do you need to ask? There is only one answer.

8-)

MackResearch
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Re: spousal disagreement over how much house to buy

Post by MackResearch » Wed Jan 04, 2017 5:03 pm

I just went through the exact same situation with my wife. My opinions mirrored yours and my wife thought along the same lines as your wife.

Rule of thumb:
1. total payment (mortgage, HOA fee, prop taxes and insurance) really should be less than 25% of your after tax income. Ideally we are talking a 15 year fixed mortgage. This rule holds for expensive coastal areas too, so definitely in the Midwest.

A paid off house is such a nice tail wind to life, so I do recommend the 15yr fixed.

Yeah, so we basically had the same conversation. Fortunately (or unfortunately) a lot of the newly constructed homes around us are pretty low quality (door handles, cabinets, carpet) and so that was a turnoff. Also, there's just a conflict of interest to some degree with builders and flippers who want to make the highest return possible (lowest cost materials) and the buyer who wants a solid home. Fortunately my wife saw this after we saw countless homes and opted for an older home which we could sense was built better.

Eventually, you will need to sell whatever house you buy. I think I read that the average family stays in a home for 6 years, but everyone always says they'll be in it for ~20 years (in my experience). Assuming the house is solid, location is everything. The person who buys your home from you in the future is going to care about location, so you should too.

If all housing related (not utilities) expenses are less than 25% of after tax income, then fine, you're just spending more than you need. But, like you said, happy wife happy life.

I personally hate commuting. It's a quality of life issue. I would not move further out of town. This also plays into the location aspect. Let's not forget that a well located home will appreciate faster too.

Lastly, this is obviously a massive purchase. Make sure that you are both putting in the work needed to see tons of homes. It's not fun after long, but it's hugely important. We looked for 18 months before buying, partly due to bidding wars and things like that, but it was hugely helpful to see homes every week for 18 months. Eventually you know your areas of interest better than your agent.

KlangFool
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Re: spousal disagreement over how much house to buy

Post by KlangFool » Wed Jan 04, 2017 5:03 pm

OP,

Did you save enough? If the answer is yes to both spouses, then, you can spend the rest. And, if you could fit the purchase of the house under current expenses, go ahead. Please note that under this model, the whole PITI/Mortgage and so on including down payment are considered as expenses.

IMHO, the issue is not whether the house costs X% of gross income. It is a question of whether you save enough.

KlangFool

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Go Blue 99
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Re: spousal disagreement over how much house to buy

Post by Go Blue 99 » Wed Jan 04, 2017 5:13 pm

delamer wrote:Is the 15 minutes each way, or round trip? Sounds minor, but 30 minutes a day for each of you is a much bigger trade-off than 15 minutes. If it is 15 minutes round trip, than consider the farther-out house.
I just checked google maps traffic. For me, the farther-out house would increase commute from 15 min to 30 min each way. For wife, it would actually be 30 min each way with either house.
bigred77 wrote:Btw... is 23% of gross assuming a 15yr or 30yr mortgage. It wouldn't change my recommendation to buy it either way but if it's assuming a 15yr mortgage than its a no brainer.
It's 30 year, I assumed 4.25% as rates have been increasing lately.
alfaspider wrote:On top of that, buyers end up paying a premium for new construction over and above even a fairly new "used" house that they almost certainly won't make up in resale (but will have to pay in additional property taxes).
My ideal scenario would be to buy a 3-5 yr old house in the prime area we want. However, the vast majority of homes in that area are 20-30 years old. I've only found a couple that are 10 yrs old. Then there are a few small new construction developments. These are typically tiny lots, but the pricey community we are looking at actually has pretty large lots.
littlebird wrote:This isn't what you asked, but I see the being "next to a large park" as a potential problem rather than an unalloyed positive.
I think I overstated the size of the park. It's not large enough to hold public events. But it does have a big playground, nature trails, soccer fields, etc.
Last edited by Go Blue 99 on Wed Jan 04, 2017 5:16 pm, edited 1 time in total.

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Watty
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Re: spousal disagreement over how much house to buy

Post by Watty » Wed Jan 04, 2017 5:42 pm

A couple of factors;

1) I am not sure what the "15 minutes" really is but when people say that they typically mean 15 minutes on a good day. At least around here at least once a week it would be a bad commute day, a couple of times a month a terrible commute day and a couple of times a year it will be the commute from hell. This is important not only for the time you would waste but also if you have jobs where you need to be there at a set time or if you have kids that you need to pick up from day care at a certain time. If the area is growing then ten years from now the commute time could be much worse too.

If you have kids then you will also be 15 minutes farther away when you have a puking kid that needs to be picked from school or when you get a call at work that they are in the emergency room getting stitches or a cast on their arm. It was never anything that turned out to be serious but I have had all those happen.

2) Part of the $800 a month is would be going to pay down the principal on the loan and part would be deductible interest. The actual expense would be less than that.

3) There is a phenomena in new subdivision where the first owners often bond and make friends more than in existing subdivisions because they tend to have kids that are similar ages and also tend to be in the same stage of life. Sociologists have studied this. When I was a kid my family moved into new subdivisions both when I was a baby and again when I was in grade school. My parents made friends in both of those subdivisions that they kept for the rest of their lives.

4) In a down housing market a house in a more desirable location will be much easier to sell.

I would tend to favor your wife on this since it sounds like you can afford it.

delamer
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Re: spousal disagreement over how much house to buy

Post by delamer » Wed Jan 04, 2017 5:49 pm

If the farther-out new house would just add a total of 30 minutes to one of your commutes, that seems like a reasonable compromise of a new house (for your wife) and a lower price (for you).

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Will do good
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Re: spousal disagreement over how much house to buy

Post by Will do good » Wed Jan 04, 2017 5:56 pm

alfaspider wrote:YMMV, but at least around here, new construction tends not to be a good investment. Even for high end houses, developers tend to throw 'em up cheap and quick and then just make 'em purdy on the outside without any regard to whether the house is actually well built. Most contractors need to be watched like a hawk to keep them from cutting corners, and nobody is watching when they are building to spec.

On top of that, buyers end up paying a premium for new construction over and above even a fairly new "used" house that they almost certainly won't make up in resale (but will have to pay in additional property taxes).
+1, our older home with our remodeling is standing up better than some of our friends "new constructed" homes. YMMV.

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Watty
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Re: spousal disagreement over how much house to buy

Post by Watty » Wed Jan 04, 2017 6:00 pm

One other factor. You also have to consider what your commute could be like if you change jobs.

Also the ten year old house was build during the height of the housing bubble when quality was often an issue and the Chinese Drywall might have been used.

https://en.wikipedia.org/wiki/Chinese_drywall

Elysium
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Re: spousal disagreement over how much house to buy

Post by Elysium » Wed Jan 04, 2017 6:20 pm

No. 23% is too much. It seems you want to make her happy (don't we all :oops: ) but that shouldn't come at a cost later. Have I disagreed with my wife on this? you bet I did. She wanted to buy newer and pricier home just like her friends (as Rod said), I said let us buy less than that and leave some room. She wanted a nice kitchen built and some new flooring done as a compromise for the less pricier home, and we did that. I ended up doing a bit more later in the house like replacing appliances and few other items. But my mortgage payment is very manageable. When we bought the house my PITI + HOA payment came at 15% of gross, currently it is 10% or less. It is not something I have to worry about if one of us were to lose our income or take a pay cut. Since you said it is on a 30 year mortgage it is not very appealing. Also, other factor include how much you have saved to retirement accounts. How about kids and college savings? these things add up. I like to keep the house cost low and leave room for other things.

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Toons
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Re: spousal disagreement over how much house to buy

Post by Toons » Wed Jan 04, 2017 7:20 pm

even after putting 20% down, the PITI + HOA would be a whopping 23% of our monthly gross income

Buy less housing. :happy
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NoGambleNoFuture
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Re: spousal disagreement over how much house to buy

Post by NoGambleNoFuture » Wed Jan 04, 2017 7:25 pm

Had to run and calculate what % of gross my mortgage is... 14%.

Happy wife happy life mate. Debt free otherwise? Go for it.

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celia
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Re: spousal disagreement over how much house to buy

Post by celia » Wed Jan 04, 2017 7:46 pm

Go Blue 99 wrote:This is a "wow" house for both of us. The issue is, even after putting 20% down, the PITI + HOA would be a whopping 23% of our monthly gross income. We make just over $200k and have no debt, so there would still be plenty of money left over.
Not only can you afford it but consider that your wife didn't have any "say" in the current house if you bought when you were single. She's probably decorated it so it has a woman's touch and may sell for more than a bachelor hangout. I'm a little surprised you didn't later buy a house where you both had some "say".
The Boglehead in me wants to get the cheaper house (or another home in that price range), which would save us about $800 a month in mortgage payment.
No-one has brought up the HOA you mentioned earlier. If we assume (for discussion purposes) the dues are $700 a month, is it fair to re-phrase this sentence that your mortgage would only be $100 more than the cheaper house plus you will pay HOA dues? If so, the mortgage isn't causing the cost difference, but the HOA dues.

As far as the park, if it is owned by the HOA, it is not an issue. The association will be responsible for what happens there and will maintain it.

Go for it!

retire57
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Re: spousal disagreement over how much house to buy

Post by retire57 » Wed Jan 04, 2017 8:04 pm

The most unhelpful comment you might receive:

If you want to make yourself nauseous, enter that $800/month differential into a compound-interest calculator to ascertain what that amount (invested monthly) would be worth after 30 years.

Oh my. :oops:

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Ged
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Re: spousal disagreement over how much house to buy

Post by Ged » Wed Jan 04, 2017 8:13 pm

Go Blue 99 wrote:I think I overstated the size of the park. It's not large enough to hold public events. But it does have a big playground, nature trails, soccer fields, etc.
One of the most important aspects of choosing a house is the potential for future development changing the character of the area around your house. I would be careful about the area around a park being a magnet for commercial development, growth of traffic and so forth. As you said this is new construction, which could mean changes in the character of the area are in progress.

Another factor is the stability of your joint incomes. Will your wife want to cease working to raise children in the future? Are you in stable positions?

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Re: spousal disagreement over how much house to buy

Post by Rodc » Wed Jan 04, 2017 8:33 pm

Ged wrote:
Go Blue 99 wrote:I think I overstated the size of the park. It's not large enough to hold public events. But it does have a big playground, nature trails, soccer fields, etc.
One of the most important aspects of choosing a house is the potential for future development changing the character of the area around your house. I would be careful about the area around a park being a magnet for commercial development, growth of traffic and so forth. As you said this is new construction, which could mean changes in the character of the area are in progress.

Another factor is the stability of your joint incomes. Will your wife want to cease working to raise children in the future? Are you in stable positions?
This is a very good point. In a location with nearby open areas that can be developed home values can easily be driven down by builders coming in and building acres and acres of housing development, often one rung nicer than the previous development. Then you are stuck if you want to move selling an older less nice house right next to newer nicer houses. Seen it happen to several friends.

Of course there are fully built up areas where builders are rapidly tearing down modest houses to built giant houses, so no one is completely free of changing neighborhoods.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

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Re: spousal disagreement over how much house to buy

Post by Geneyus » Wed Jan 04, 2017 8:42 pm

We had a long list of necessities when we were looking for a house (large master bath, large kitchen, open floor plan, etc). We got a great deal on a house built in the late 1970's, and we spent about $15-20k remodeling it (new tile floors, screened porch addition, new window, took down a wall, paint, etc). My wife was very reluctant to buy the house because it looked like it hadn't been updated since the 1970's, and after the work we put into it, she absolutely loves our house and talks about staying in it until we retire. We bought this old house because it was down the street from the #1 school in the county. If you can get a good deal on a cheaper/older house, it's worth spending extra money over a year or several years to make it nicer. That way, the spending is optional, versus having a high mortgage payment on a house with all the bells and whistles.

Next time you look at houses, remind your wife that floors and paint can easily be changed. Focus on location and the bones/layout. Bathrooms can be expanded. Kitchens can be updated. You'll save a lot of money buying a cheaper house and making it yours than trying to buy into a certain status you may or may not be able to afford 5 or 10 years from now.

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Re: spousal disagreement over how much house to buy

Post by Grt2bOutdoors » Wed Jan 04, 2017 8:57 pm

If you have proper disability, life and health insurance and enough in reserves - buy it.
Normally, I would not say to buy it - but I agree with Celia - the current house you live in is "your" house. The new home where ever it might be, whether it is new or 10 years old will be "you and your wife's home".
Good Luck on what ever you choose.
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Elysium
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Re: spousal disagreement over how much house to buy

Post by Elysium » Wed Jan 04, 2017 9:10 pm

There is some real bad advice going on here, very unlike the Boglehead community, perhaps a home is an emotional topic and people tend to not look at numbers :confused

OP, you stated the combined gross annual income is just over $200K and 23% of monthly gross comes to about $3800 - that is a lot of housing for that kind of annual income. To put that in perspective it is around $45600 annually of a $200k pre-tax income. $200K isn't a lot when you factor in kids, college savings, vacations, cars, retirement savings, taxes, family expenses, gifts, charity, utility bills, insurance, on and on ... You should be staying somewhere close to 15% to 18% gross at the most. Otherwise it is going to be trouble down the road.

Just sayin'

Wanted to add one more thing. Buying too much house is the number one contributing factor for majority of Americans being in financial disaster. You have zero debt now, but with too much housing you will soon be raking in CC debt and looking for balance transfer offers in 5-10 years as costs mount. Either that, or your retirement savings and college savings will diminish greatly.
Last edited by Elysium on Wed Jan 04, 2017 9:18 pm, edited 1 time in total.

brad.clarkston
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Re: spousal disagreement over how much house to buy

Post by brad.clarkston » Wed Jan 04, 2017 9:17 pm

This is an easy answer. The wife is always right.
That's what mine tells me anyway.

EDIT: This isn't about money or brains this is about hearth-&-home. If you can afford it and she wants it is it worth the marriage counseling ?
Just make sure you don't do anything else stupid besides the house for awhile.

O and make you #1 resolution to make more money over the next 10 years ;) That's the other thing my wife says. I have to continually strive to make more income until I die.

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TinkerPDX
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Re: spousal disagreement over how much house to buy

Post by TinkerPDX » Wed Jan 04, 2017 9:24 pm

Chadnudj wrote:23% of gross pay (when you have no other debt and steady jobs) doesn't seem like a red flag to me at all for a place that checks off all of your list....particularly when the other option is just a 5% reduction in that amount and would require you to oversee renovation work/deal with the inconveniences of the factors it did not include. Yes, having a bit more to save for early retirement and/or an extra vacation or so a year would be nice, but you spend the VAST majority of your time in your home as a family -- I wouldn't look at that as a major overpay, particularly if you lock in a good interest rate and watch as inflation (hopefully) keeps your housing costs down and fixed over time.

Go where you (and just as importantly, your spouse) will be happiest.
+1

23% of gross for a "wow" house to you and to spouse? go for it.

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Re: spousal disagreement over how much house to buy

Post by fishandgolf » Wed Jan 04, 2017 9:37 pm

Go with the new house in the preferred location; in a few years you may regret your choice if you go with the lesser expensive option.

My wife and I had a similar dilemma many years ago; in the end, we were fortunate to find the house we wanted in the location we wanted.

I hear ya on the "happy wife, happy life" thing. I follow this rule:

Rule # 1: My wife is always right. Rule #2: When my wife is wrong, see rule #1. :beer

Good luck and best wishes in 2017 and beyond!

freebeer
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Re: spousal disagreement over how much house to buy

Post by freebeer » Wed Jan 04, 2017 9:40 pm

Go Blue 99 wrote:... Is this a situation where "happy wife, happy life" applies?
Yes, and don't go for the longer commute (I am in a 37 year old 2000 square foot house... but then again I am recently divorced so arguably an anti-pattern).

LarryAllen
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Re: spousal disagreement over how much house to buy

Post by LarryAllen » Wed Jan 04, 2017 9:45 pm

23% seems fine to me. I'd buy it. You'll be thankful in 10 years.

momvesting
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Re: spousal disagreement over how much house to buy

Post by momvesting » Wed Jan 04, 2017 10:02 pm

I think you need to look at ALL the numbers. Have you looked up the property taxes and HOAs on one of the "acceptable" cheaper homes? What about homeowners insurance? Sometimes new construction has cheaper insurance if certain safety features are installed. What about utilities? The new construction could be energy efficient and save you money or it could be cheap crap. Different areas can also have different utility providers with different rates. What about car insurance? Based on crime stats, how many miles you drive annually, zip code, etc. your car insurance may fluctuate. I think you need to look at all of these things before deciding. Good luck.

bluejello
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Re: spousal disagreement over how much house to buy

Post by bluejello » Wed Jan 04, 2017 10:09 pm

This doesn't really seem like a disagreement over how much house to buy, it's more about different values. She values new construction and nice finishes, you value location and short commute. Perhaps you could find another solution that makes everyone happy — for example, what if you bought an older home in a great location and then renovated it? That way you would get to choose exactly what the finishes are, customise it to your own tastes, and it would feel new.

I would suggest that first you two come to agreement on how much to spend on a house, then work on finding a house that fits both your needs within that budget. Whether or not 23% of gross is an acceptable amount to spend really depends on how stable your incomes are. What's the chance that either one of you loses your job in the next 5-10 years? If you did lose your job, how quickly would you be able to find another job that pays similarly? Is there any chance one of you might want to quit your job to be a stay-at-home parent or to start a business or for any other reason?

If your incomes are very stable or likely to continue increasing, then 23% of gross is not too much at all (assuming you'd still be able to save a good amount). But if your jobs / industries are not so stable or there's a chance either of you want to stop working anytime soon, then maybe not such a good idea.

staythecourse
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Re: spousal disagreement over how much house to buy

Post by staythecourse » Wed Jan 04, 2017 10:11 pm

I didn't even bother reading the other posts so apologize if I am repeating, but my answer is without a doubt to BUY IT!!

1. There are not many times wife and husband both find everything on their wishlists on such a big purchase.
2. The delta of $800/ month difference in monthlly liabilities is not such a big number that can't be gotten to by cutting out frivalities if one loses a job.
3. The biggest decision maker for me is the top rate school system. That means much better chance at reselling whenever that comes, not having to worry about kids education, and safer/ well to do area usually.
4. Parks are a big bonus
5. No point having a wad of cash in retirement if one can't enjoy life along the way.
6. Always nice to keep the wife happy
7. Read number 6. again. :D

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

Boglegrappler
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Re: spousal disagreement over how much house to buy

Post by Boglegrappler » Wed Jan 04, 2017 10:14 pm

the proper way to assess the importance of incremental additions to commute times is to consider what fraction of your free time you are relinquishing.

As you get older,you realize that all you really have in life is your time.

staythecourse
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Re: spousal disagreement over how much house to buy

Post by staythecourse » Wed Jan 04, 2017 10:18 pm

bluejello wrote: I would suggest that first you two come to agreement on how much to spend on a house, then work on finding a house that fits both your needs within that budget. Whether or not 23% of gross is an acceptable amount to spend really depends on how stable your incomes are. What's the chance that either one of you loses your job in the next 5-10 years? If you did lose your job, how quickly would you be able to find another job that pays similarly? Is there any chance one of you might want to quit your job to be a stay-at-home parent or to start a business or for any other reason?

If your incomes are very stable or likely to continue increasing, then 23% of gross is not too much at all (assuming you'd still be able to save a good amount). But if your jobs / industries are not so stable or there's a chance either of you want to stop working anytime soon, then maybe not such a good idea.
Not sure this is a reasonable argument as the discussion is not: Buy this expensive house vs. renting, but instead is: Buy this expensive house vs. less expensive house. So, in essense the extra monthly liability hit would be $800. Nothing to sneeze at, but not the difference of living on the street vs. having a roof over one's head.

In my humble opinion, this is not a situation %'s matter, but the delta difference between the two options. Besides this is not including the likely higher cost of ownership in an already 10 yr. house with their "guts" vs. a new house.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

sambb
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Re: spousal disagreement over how much house to buy

Post by sambb » Wed Jan 04, 2017 10:20 pm

sounds like a nice home, why not buy it and be happy. you can always sell it later in life and downsize
nice school system = definitely buy
I lived in an "average" school system. never again. never.

staythecourse
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Re: spousal disagreement over how much house to buy

Post by staythecourse » Wed Jan 04, 2017 10:29 pm

Boglegrappler wrote:the proper way to assess the importance of incremental additions to commute times is to consider what fraction of your free time you are relinquishing.

As you get older,you realize that all you really have in life is your time.
Just wanted +1 that. How true is that. Time is one factor that only seems to get more sparse as you get older so anything you can do to add more to it to enjoy family and friends one should do.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

BW1985
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Re: spousal disagreement over how much house to buy

Post by BW1985 » Wed Jan 04, 2017 10:38 pm

Seems pretty high to me. The general 'rule' I've heard is less than 25% take home pay which you'd be well over.

But it's all relative, probably seems high because we chose to buy less house and are at 11% of gross on a 15 yr mortgage.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

Dottie57
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Re: spousal disagreement over how much house to buy

Post by Dottie57 » Wed Jan 04, 2017 10:43 pm

What will happen if the person with the largest salary loses their job? Will you be able to make the house payment and associated costs without touching emergency?

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whodidntante
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Re: spousal disagreement over how much house to buy

Post by whodidntante » Wed Jan 04, 2017 10:47 pm

My house payment is 11.3% of my gross income, and I am sure that I have too much house.

chmcnm
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Re: spousal disagreement over how much house to buy

Post by chmcnm » Wed Jan 04, 2017 11:05 pm

It's been about 20 years but we bought less house than we could have. My wife would put all the money into a house if she could. Still complains every once in a while. But...we've been able to save more, do more, be more flexible career wise, spend more time with the kids and probably with less stress than being "house poor". I don't pay much attention to the complaints because I know it was the right decision. Plus a lot of new construction is junk. You'll be fixing or upgrading within a few years.

Two more things....always consider location as first requirement. There's always demand for good locations if you have to sell. I've seen too many people lose their behind on houses that were good deals but not the best location. Also, don't buy too big of a house. I know too many families that never spend time together because everyone has their "space". Not a great way to build a family or marriage.

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nedsaid
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Re: spousal disagreement over how much house to buy

Post by nedsaid » Wed Jan 04, 2017 11:28 pm

Go Blue 99 wrote: I appreciate any advice. Is this a situation where "happy wife, happy life" applies?
Yep.
A fool and his money are good for business.

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Re: spousal disagreement over how much house to buy

Post by MoonOrb » Thu Jan 05, 2017 12:14 am

If I loved a house AND it made for a shorter commute AND it was across from a park AND my wife loved it too...

...I would buy that house if I could afford it.

You can afford it. Buy the house.

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