Kedar wrote: ↑
Wed Jan 09, 2019 11:29 am
Combined gross income: $300K.
PITI: $3,985 (includes a rough estimate for maintenance). Current rent is $1,500.
Down payment: $240K (we have an emergency fund and about $300K in retirement funds).
I am normally the guy that says that is crazy and you should move to a lower cost of living area but you are fine.
Even with the the closing costs your mortage would be less than $500K and part of each month's mortage payment would go towards paying down the principal which will build up your home equity and net worth over time.
One thing I have not seen mentioned is if the house would be in a good school district or not. You do not want to buy the house now and then need to move again in six years when a kid is ready to start school. Even if you don't plan on having kids your plans might change. Even if you don't have kids eventually selling a home in an area with bad schools can also be a lot harder in a bad housing market so the quality of the schools is still a factor to consider.
All that said you might also want to consider moving to a lower cost of living area if you don't have stronge ties to the area. In probably 80% of the country you would be close to being able able to buy a much better home for cash for what your down payment will be there. If you will have kids then you may also want to consider what it will be like for them to try to afford to live in that area when they grow up. It is a long time away but 30 years from now any kids and grandkids might not be able to afford to live near you if they don't have a real high income and that is important to some people.
Your $300K income is great but a lot of it will go to taxes and your mortage payment so comparing that to a lower cost of living area is like converting money to a foreign currency. In some low cost of living area with a paid off house, or small mortage, you would be able to have the same standard of living with a fraction of your current income or even just one income.
For example here is the type of home you could buy for cash in the suburbs here in Atlanta.
https://www.realtor.com/realestateandho ... 10&view=qv
Prices vary greatly by area here but in most areas $400k would get you a McMansion.
A lot of college towns are affordable and might be a nice to live in.