Recently put in an offer on a house starting at 869k with 5% down, and agent said that we should set our bidding cap to 1.1 mil. i personally never have committed to spending so much before, so am pretty stressed how high the cap was compared to the listing price. still better than east side prices, at least.. I checked nerdwallet and whatnot and they all say it should be ok with the whole “27% of ur income” thing, but wonder if others think thats a bit wild. if we maxed out at 1.1 mil, is that a good deal? if not, what would be a good cap to stop at? 3bed 2bath, 2100 sqft west seattle household TC: 374k
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Apple didn’t let me change white hand to yellow :/
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West Seattle to the East Side is a nightmarish and punishing commute… are you sure you wanna sign up for it?
+1 to this - gonna be a b*tch once we are back in office & bridge is still shut down
Yeah, my partner is remote work and I don’t mind driving. I don’t think the office will open before the bridge works again, and our org is permanently hybrid so I don’t always have to drive there
Consider property tax as well. (Don't know % of the property tax in the area)
Good point! Thanks 🙏
fyi - most jumbo lon programs allow 43% for max debt/ become ratio
West Seattle to Redmond? Have fun.
+1 on hell commute. You really want 3 hr in the car each day?
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To put it context, you can probably go over the recommended 27/30% of income on housing because you make a lot of money and the other stuff doesn't cost you. This rule of thumb is for poor people. I think of it as (mortgage interest + property tax + maintenance) vs the cost of renting. This is your housing cost. This is what should be 27/30/33% or whatever. A big chunk of mortgage is going towards your principal. This is forced savings or speculative leveraged investment, depending on how you think of it. It's not really money you are spending.
That’s a neat way of looking at it. Thanks for the info!
Depending on your loan, in the first few years at the least, nearly all of your mortgage payment is going towards interest. This ratio skews more towards principal as you pay off more of the loan, the original thread’s comment about “forced savings” is not quite true. I do agree that with a salary that high in a MCOL location you have more than enough to live and invest in other things