My partner and I are in the process of buying a $580,000 house with a $100,000 down payment. We’re financing $480,000 at 6.75%, and our anticipated monthly mortgage and property tax payment is around $4,000. After taxes and deductions, our take-home pay is about $7,800 per month.
Currently, we’re a single-income household because my partner was laid off in December and is actively job hunting. Once they secure a job, our household income will increase significantly. We’re purchasing in a high-cost-of-living (HCOL) area to be in a great school district, which we prioritize for our child.
Here are some key details:
We’ll have approximately $25,000 in savings post-down payment.
We own about $150,000 in stocks, though this fluctuates.
We previously owned a home in Austin, TX, with a 2.7% interest rate, so this jump in housing costs feels significant.
Is moving forward with this purchase a risky decision, given our current situation? Should we back out, even if it means losing the earnest money? Any insights would be greatly appreciated!
Considering your stock equity, savings, and the prospect of a second income, this seems manageable, though risky. If you can’t handle the tight finances, you might consider selling some stocks to increase the down payment, reducing your loan amount and monthly payments. A 6.75% interest rate makes paying down the mortgage a solid move.
We’re in a similar situation—$140K income, $3,700 mortgage, and about $150K in stock equity. It’s tight, but doable. Best wishes for your partner’s job search! Consider how far you’re willing to stretch if their job ends up being far from your new home.
You’ll be okay if your partner secures a job soon, but the current payment is too high for one income long-term. Ensure you’ve considered potential property tax and insurance increases.
Have you factored in all expenses, like HOA, utilities, and retirement contributions? Also, consider whether you’re planning for a second child, as that will add to your financial strain. If it feels too tight now, it might be worth walking away.
A $4,000 monthly housing payment is 50% of your take-home pay. What happens if taxes or insurance go up? This feels risky unless you’re confident about the second income.
Banks often approve higher loans than people can realistically afford. Don’t let pre-approval convince you this is a good idea. Run your own numbers and prioritize what you value most—security or the home.
If your partner secures a job and interest rates drop so you can refinance, you’ll likely be fine. But don’t bank on rates dropping soon; it’s better to plan for the current terms.
Consider using your stock equity to make a larger down payment. It’s a guaranteed way to reduce your monthly payment, which will ease your financial strain.
If you’re already feeling tight before you close, it’s unlikely to get easier. Taxes, insurance, and unexpected repairs will only add to the pressure. Consider whether a home in a slightly less expensive district might still meet your needs.