Can we handle a $1.2M house with $325K income and $250K down?

Seeking Advice
1

We recently welcomed our first child and are considering moving to the suburbs for a bigger space. Our annual household income is $325K, and we’ve saved $250K for a down payment. We currently own a downtown Chicago condo with a $1,500 monthly mortgage and an estimated rental value of $4K/month.

We plan to find a home in a good school district and stay for at least 7–10 years. We also aim to continue investing in our retirement, our child’s education, and the stock market without stretching ourselves too thin.

Does this seem financially feasible for us? Any insights would be appreciated!

2

With taxes and insurance, you’re looking at $8K+ monthly. Daycare in your area can run $1,500/month per child, possibly more. Renting out the condo could help offset the costs. You’ll need to budget conservatively to make it work. Property taxes here are especially high—some areas hit $20K–$25K annually.

3

@Vail
Daycare rates vary widely. We pay $2,400/month per child at a ‘budget-friendly’ daycare in the area.

4

Zaire said:
@Vail
Daycare rates vary widely. We pay $2,400/month per child at a ‘budget-friendly’ daycare in the area.

That’s true. I’ve seen those rates too. Ours is a Montessori bilingual school that charges $1,500/month, but options differ greatly.

5

@Vail
Those property taxes are brutal—like paying private school tuition just in taxes.

6

Rory said:
@Vail
Those property taxes are brutal—like paying private school tuition just in taxes.

Luckily, public schools in Oak Park and many Chicago suburbs are excellent, so private schools aren’t necessary for most families.

7

Rory said:
@Vail
Those property taxes are brutal—like paying private school tuition just in taxes.

True, but buyers should check for tax reassessments. Older properties often have lower taxes that spike dramatically after a sale.

8

@Vail
This process is called ‘uncapping’ and happens when a home changes hands. It can significantly increase taxes overnight.

9

@Vail
If you’re budgeting for a baby, remember that expenses can stay high even after the daycare years. Teenagers are expensive too!

10

Cameron said:
@Vail
If you’re budgeting for a baby, remember that expenses can stay high even after the daycare years. Teenagers are expensive too!

Agreed. It’s a long-term commitment, and every family has different thresholds for what they can handle financially.

11

@Vail
My parents have offered to provide childcare for the first couple of years, which is one reason we’re considering this move. Would that change your assessment?

12

Ali said:
@Vail
My parents have offered to provide childcare for the first couple of years, which is one reason we’re considering this move. Would that change your assessment?

That’s a huge help, but I’d be cautious about relying on it long-term. Things can change quickly.

13

Ali said:
@Vail
My parents have offered to provide childcare for the first couple of years, which is one reason we’re considering this move. Would that change your assessment?

Grandparents helping is fantastic but can have its limits. Unexpected trips or health issues could make their availability less consistent.

14

Ali said:
@Vail
My parents have offered to provide childcare for the first couple of years, which is one reason we’re considering this move. Would that change your assessment?

It’s a great opportunity, but make sure to assess potential tax spikes on the new property too.

15

Try living as though you already have the new mortgage for a few months. Track your spending and see if it feels sustainable.

16

Keenan said:
Try living as though you already have the new mortgage for a few months. Track your spending and see if it feels sustainable.

It’s a solid strategy if you can manage it. You’ll also save extra money during the trial period.

17

@Hayden
Exactly, and the worst-case scenario is you’ve saved a bit more towards your goals.

18

Keenan said:
Try living as though you already have the new mortgage for a few months. Track your spending and see if it feels sustainable.

Budgeting is key. Make sure your housing costs don’t exceed 30–35% of your take-home pay while balancing other expenses.

19

Keenan said:
Try living as though you already have the new mortgage for a few months. Track your spending and see if it feels sustainable.

Living by a budget is essential for any major financial decision. I’ve always kept one, and it’s the reason I was able to retire early.

20

@Orion
You’re absolutely right. Budgeting is underrated, and more people should adopt the habit.