Don’t touch the 401(k) money. You’d face taxes and a 10% penalty unless you’re borrowing it, which isn’t clear from your post. Instead, consider putting $150K down. Based on your salary, anything above $550K might make you house poor, and finding something decent at that price in SoCal might be tough.
In SoCal, a standalone house might not be realistic with your salary. Besides the mortgage, there are property taxes, repairs, and other monthly expenses to consider. Townhomes might be a better option unless you’re okay living far from central areas.
Freddie said:
Based on your $120K gross salary and $200K down payment, you might afford a $700K house max. But even then, it’s tight at current interest rates.
I’ve looked at houses around $700K online, and it’s slim pickings. Plus, I wouldn’t be able to contribute 15-20% to my 401(k) anymore because the monthly mortgage would be so high. Even if I put $250–$300K down, the payment barely changes.
The market is softening, and prices will likely drop further next year. You’re better off waiting another year or two. Max out your overtime and savings while you wait.
Ash said:
The market is softening, and prices will likely drop further next year. You’re better off waiting another year or two. Max out your overtime and savings while you wait.
Having lived in SoCal, I’d be shocked if the market truly softens here.