A little about me first:
- I am 33, no kids and not married. Kids are not in the plans.
- I have no debt.
- I max out my 401K and have maxed out my Roth IRA for this year. I will make sure that with whatever home I buy, I will continue to max out my retirement as much as I can.
- I make about $120K a year.
- I have a little over $300K in savings in a money market. Up until this year, I had not really thought about investing it because I am really risk averse. Maybe that is why I am in the predicament I am in. Through reading posts on this forum, I realize that I need to be less risk averse if I am ever going to reach my long term goals. Once I figure out what is going on with the house, I am going to invest the remainder. Part of that $300K is $30K for a new car at some point in the next few years. My current car is 15 years old with almost 200K on it and rust is starting to eat through it.
- I have $30K in a separate high yield savings account. That is my emergency fund.
I want to keep my monthly payment below 50% of my take home (50% is about $2,500 a month). I know conventional wisdom is to keep it at 25%, but I am not sure how feasible that is in this area. If I put down $155K, my monthly payment (including taxes and insurance) will be about $2,150 a month. I know taxes and insurance go up, so I figure I need to put down more to give myself a cushion (that is how I arrived at $155K down). Eventually, my significant other will move in and will contribute to the monthly expenses. Even if that does not happen for whatever reason, I can still afford the mortgage and other living expenses (food, utilities, car repairs, whatever). I do not spend a lot of money. Whatever I do not spend at the end of the month goes directly to savings.
So here is my question. Given how much I have saved, would it be an unwise decision to put $155K down on this house (probably $175K after closing costs)? Should I look down market even if it means fewer of my boxes will be ticked? I guess the crux of the question is should I sacrifice cash to get into a house I really like or should I cast my emotions aside and strictly look at the numbers? I could really use your advice and perspectives. Thanks for reading!