Living in a very high cost of living area (VHCOL), all houses are expensive. I’m looking at a $1.3M mortgage with a $10k/month payment.
We have 3 kids, and I’m expecting to get enough equity from vesting RSUs in 2 years to pay off the house.
On a scale of 1 to 10, how crazy is this plan?
This hinges on the RSUs. If they vest as expected, it’s a calculated risk. Without them, this feels too tight, especially after taxes and other expenses. Run a detailed budget to see if this makes sense.
It’s risky, especially with 3 kids. You’d be living on about $5k/month for everything else, assuming a high effective tax rate. Do a detailed budget before committing.
A 40% debt-to-income ratio is technically acceptable for many lenders, but you’ll need to be very disciplined. Make sure you’re comfortable with the payment and have a strong emergency fund.
This seems like a bad idea. Post-tax, you’ll have little wiggle room for emergencies, child-related costs, or saving for retirement. Factor in maintenance and taxes increasing over time.
Do you have 6 months of living expenses in an emergency fund? If not, this is way too risky, especially with kids to support.
It’s not ideal, especially if you’re not planning to stay in the house long-term. If the RSUs fall through, you’re in trouble.