Hi folks, will try to lay this out cleanly.
I’m in the home buying process right now. Current prices in my area for a 3/2 range from:
- 450k and under – not great
- 450k-600k – decent
- 600k and over – ideal
The two counties I’m looking in have some of the highest property taxes in the nation, and subsequently is “factored in” to the price for a lot of buyers; however, I’m at 100PT and am exempt from property taxes up to 800k in my state.
Between my current job and disability/med retirement, I’ll be pulling in between 130k-140k this year post-taxes. Currently preapproved for 550k because that’s the number I put down, not the number my lender said. I am single so this is my only household income.
Looking at estimated mortgage payments on a 550k house, I’d be paying about 3k/month for mortgage and insurance, and about 4k/month if property taxes were involved.
My question is, with a net of pulling in about 12k/ month, am I dumb for thinking I push up to 600-650-700k on a house if it’s much more what I’m looking for, long term? 700k would cost me about 3800/month for mortgage and insurance (essentially my disability comp). If rates go down in the future, I’d refinance for a lower one when I could.
I live frugally, have a healthy emergency fund, and no real debt. FTHB and VA loan / state grants so I can take advantage of some of that too.
Thanks
[Veteran] Can someone sanity check me on buying a house?
byu/milpepipeline inMilitaryFinance
Posted by milpepipeline
3 Comments
There are a lot of factors, to consider. The big one I look at is how much will you be able to save and invest after your expenses. You said you live frugally, but didn’t put a number on it. How much do you spend annually? How much will it increase?
Also are you putting anything down?
How much liquidity are you sitting on? Figure 10-15 closing and another 10 initially fixing stuff that needs to be fixed, I would be wary if you weren’t sitting on 60k. Other than that it makes sense to me
Will your quality of life improve if you own a home? By how much, would you estimate? What’s the price tag on that quality of life improvement? Would you be willing to make sacrifices in one area (cut out the daily Starbucks, eat out less in favor of cooking at home, have parties at your house instead of going out to the bars, etc) in order to better afford home ownership?