Can I afford 1.2m home
As title says. I want to know how many of you are in a similar situation as me. Single earner, TC 330k, 36 years old, family of 4, have 2 kids who goes to public school. Have 250k savings for down payment. 150k in stock. Rented for 8 years. Want to have our first home. Edit: we’re targeting a townhouse in east bay tri-valley area.
Yes of course, long as your TC is majority cash based (base + bonus). Where are you looking though? 1.2M wont get much in the bay sadly. Btw where are you keeping your 250k in savings for the down payment? In a similar situation wondering if i should put it in a cid or something.
put it in usdc. cd locks it up for too long and rate isn't any better than savings interest rate at any ebank like ally
We’re looking for a townhouse in the east bay tri-valley area. I am currently keeping my down payment in the online savings account with Marcus.
home ownership comes with a bunch of its own problems... have a reason other than $ you want the home financially in the the bay area 9 times out of 10 you're better off renting and investing the difference in vti.
Care to explain your 9 out of 10 times theory?
Historically stock returns are better than housing, but you have more leverage with a house than you do with your cash. If you have 200k to invest and you average 8% return yearly over 10 years vs if you downpay 20% on a 1m home and the house averages 4% return over 10 years, guess which one gets you more money? Plus, mortgage interest and property taxes help reduce tax burden up to a dollar amount.
Probably looking at 1.6m if 1.2m is the listing price. Searching for 900k listing seems a bit safer as a single earner in my view
True but where to buy with 900k in the bay area for a family of 4?
East bay or further down south from the valley
If indeed you can find 1.2 to 1.3 mill houses, You are good. I have similar stats, but children go to daycare and wife works. So same finances. You can make it work. Drive a little far.
330k for Bay Area is mediocre…tbh
It could be mediocre for some, but we’re so blessed to have a job that pays this much.
In what way is 330k mediocre? Median SWE pay is 215k in the bay. https://www.levels.fyi/Salaries/Software-Engineer/San-Francisco-Bay-Area/ This is for SWEs, what about essential workers?People have lost their minds lol.
Putting down a little more will lower your monthly payments. You can find in east San Jose but has crime. South San Jose is a good bet if you are willing to sacrifice commute time.
It’s really hard to find house in 1.2M in try-valley.
What is your average monthly expenses?
It would be around 4k not including unexpected expenses.
If ur expenses is at $50k/year with a $330 TC I’d say go for it. Some of these might be my personal preference but for me 1) Having a house of my own gives a very good sense of stability, 2) real state has been and is always an excellent longterm investment, 3) having a responsibility to pay you mortgage installments will help you avoid some nonsense expenses and build wealth over time.
You will get a pretty good townhouse for that money in the livermore/dublin area
That’s what we believe so fingers crossed.
I would consider moving out of Bay Area. To be honest your savings and TC is difficult to handle a mortgage and provide for your family. ——- update: Folks, let’s be honest it’s very difficult to support a family of 4+ people and pay a ~1m mortgage to live in the Bay Area. A 1.2m house is also quite small for a family of four unless you live in further out East Bay or tri-valley. Look elsewhere as there are many great cities in America that have tech jobs, weather and diversity.
We really want to stay in the bay area due to weather, diversity and job opportunities.
Nope. Run the numbers. I have similar financials and we are comfortable. 330K is not very less, some people do weird convoluted flexes.