Submitted by [deleted] t3_z8ro9w in personalfinance
[deleted]
Comments
Slight_Possible_4186 t1_iycwgcr wrote
Pretty confident. it would be with her current company most likely, but it's a niche field and very in demand
Concerned-23 t1_iycwntz wrote
Anyway to get an offer from her current company that she’ll be staying on? Tell them you’re trying to buy a home. Niche field tells me if current company doesn’t keep her then you’d likely have to move. Lexington is a decent size but it’s not Chicago
Slight_Possible_4186 t1_iycx12r wrote
Well it's the whole degree in her field that allows her to make the jump. the degree is more like a training program (think Dr. residency), where she gets trainings hours etc. She needs to have graduated and have that credential before, I believe this is the industry standard.
Concerned-23 t1_iycxcwt wrote
Ahhh okay makes more sense. Something similar to going from RN to CNP
Edit: but obviously more niche.
If I were you I’d buy
Slight_Possible_4186 t1_iyd0uzr wrote
Any budget idea/recommendation?
Concerned-23 t1_iyd1em9 wrote
I mean with your new salary, I don’t see why you can’t afford a $2500 a month mortgage (full PITI). Possibly more but you didn’t break out a full budget to share what you spend on groceries, gas, car insurance etc.
Slight_Possible_4186 t1_iyd22j1 wrote
We are frugal for the most part. Limit going out for meals 2-3x a week.
No cell phone bill (its on a family business plan)
Average $150-200 weekly groceries
40/month total for gym membership
Gas: $65 week (will go down due to my lack of commute)
Car insurance for both of us is $144/month ($1728 annually)
LatePlant1887 t1_iydarny wrote
Consider childcare costs in your budget if you want to use both incomes when looking at a mortgage you can afford. In our MCOL, it’s about $1300 a month for a toddler and more for a baby.
sephiroth3650 t1_iyd0wfv wrote
Without really digging into your full budget, all anybody can really say are that general recommendations are that you try to stay at or below 3x your gross annual income with a house purchase. Lately, with the housing boom, I've seen people argue that you can go up to 5x your salary in high cost of living areas. But I still think that compresses the budget a ton. So in your case, without knowing more, I'd say that you should shoot for homes under $500k at most, if you're committed to buying something. That mortgage payment, with $25k down, would generate a monthly payment in the ballpark of $4200. With a $175k combined annual salary, your monthly net income would likely be in the ballpark of $10k. That seems affordable, especially knowing your wife will likely increase her income in the next couple of years.
Walken_Shoebaru t1_iydfe5w wrote
The multiplier is a function of the interest rate. If it dropped to 5x that had to be with sub 3% rates. You're realistically looking at 3-4x right now.
sephiroth3650 t1_iydildg wrote
Totally agree. The underlying interest rate is a main factor. A $400k mortgage at 3% comes out VERY differently than one at 8%. Those rules of thumb are just generalizations, and as I said, I don't agree with people pushing that shit to 5x. I would say AT MOST you go 3x.
Walken_Shoebaru t1_iydjwzh wrote
Definitely. This month the median home could not be purchased by the median household income. Idk how often that happens, but it's the situation we're in.
Liquidretro t1_iyd365j wrote
Personally, I would probably wait till she's done with the master's program so you make sure she can get a job in the area you want to live in and you will have her income to put onto the mortgage as well. That will make it a lot easier to qualify for homes that you want to live in longer most likely. Until then invest in retirement and build that downpayment as it sounds like you are a bit short to start buying soon. Waiting might also give the housing market time to stabilize a bit and mortgage rates to decrease. Who knows.
satellite779 t1_iydo4ct wrote
You don't say how much would a house cost in the area you want to buy, but it doesn't seem you currently have much buffer for buying. You have around $100k between investments and savings. That will all probably go for the down payment and then you have $0 savings. You also have $30k in debts + a car loan.
What happens if you buy a house and then get laid off from your new job (this can happen in a recession where new hires and/or highly paid employees go first). Will you be able to pay the mortgage and expenses for a year with no income?
ladnar016 t1_iyds3ey wrote
On the rent for now train of thought. You can understand what kids mean theoretically, but I'd wait until you know you're going to have kids to buy. On top of your wife's job stability, I'm sure your needs now versus when/if you have kids will change. It'd be a waste of money (realtor/title/mortgage/moving/furniture etc.) to move now, only to have twins and discover you need to move again in 3 years. On top of all that the housing market is starting to drop, so you'll probably get a better deal in a couple years when you guys are pregnant. Enjoy being childless and not having to take care of a house while you're in your twenties!
Main-Inflation4945 t1_iyekqf8 wrote
Wait and see if you actually like your job after the honeymoon phase and for your wife to finish her degree. You'll want more than two bedrooms if you're having kids.
Concerned-23 t1_iycwboh wrote
What’s her masters in? How confident are you she’ll get a job she wants with the masters where you currently live? Many people have to live after finishing grad school for their job. It would be a terrible situation to buy a house then you have to move for her work in 18 months.