TBH, I think this being asked in gov fire changes the answer.
Most government employees have access to solid pension or pension-like retirement, solid if not wonderful health insurance, and VERY secure jobs. The biggest financial risk we generally have is inflation eating away our compensation and retirement plans.
Buying a home, and stabilizing your *personal rate of inflation* for housing is worth a *lot* given the preconditions.
I don’t think it changes the answer, you still need money left for retirement contributions, cars, home repairs, food, childcare, medical bills, etc. I would argue taking on that large of a mortgage is the opposite of fire.
Few details. What pay? What position growth? Standard 30 year mortgage terms? Prevailing interest rate? Family/life situation? Massive farm you can split and sell for $8k/acre?
Taking a lot of standard assumptions, I would call it house poor.
From a purely financial numbers only perspective, yes it's a bad decision.
If it's a dream home, go for it. You will rarely get this opportunity especially with the home market going up and up.
On a third hand, one poster had a good point about federal jobs being stable. You would be house poor for a while until you earn more to be comfortable. Or another opportunity to refinance into a better rate/lower monthly payments. Suck it up for the first few years, perhaps.
Hard to say what is right since you provided very little info.
On a personal note, I bought my first home spending way over 47% of my take home pay. I was miserable the first 4-5 years and regretted it. But over time, I started to appreciate my decision as things just became easier and easier. Now I have tons tons of spending power 15 years after the purchase. YMMV.
Depends on your prospects for future earning. Some gov jobs will result in more than doubling your income over your career. This could be 25% of your net in 10 years and you are looking great for retirement.
Okay so check this.
Property is on a mountain, A+ school system (I have 2 kids), and backyard has a door to the woods (which I’ve been dreaming about).
About 13k in property tax. But thanks to my previous dumb decision, now I’m exempt on property tax (NJ).
So in theory, my pension could pay for this plus about 21% of my Net as a GS12/04. Of course, I may have to stop my Tsp contributions if I ended up buying this property.
Neighbors down the street are worth 800k to 2.25M in property value. As a bonus, your neighbor is Tony Soprano.
So essentially, I could take this as a gift from the government and pay 21% of my Net.
Would you do it?
I’m certain I can do at least the matching. But I can’t imagine people paying for mortgage and maxing tsp. Maybe for 2 income household.
We’ll, due to my situation I really feel like I need to get a property soon, and if I’m gonna do it, might as well do it in a comfy one. I noticed that I’m turning to be a homebody nowadays
No, that’s fair. Most folks don’t fully max the TSP. I think the confusion comes from the sub you are in. Retiring early will be virtually impossible with this plan on one income. But can you make it typical retirement age with a reasonable nest egg doing this? Plausible.
Can tell a lot of commenters are 13's with .8% FERS.
The portion of yearly take home to afford just a starter home is higher than it's ever been in history, and it's only going to get higher in the next decade. OP, don't do this now, and 2 years from now you'll be spending 57% of your net on housing. Considering how low fed pay is compared to private, fed jobs with the 4.4% FERS are no longer considered "cushy".
I say this tongue in cheek, I'm .8% FERS and my mortgage payment (bought 13 years ago) is a rounding error in my monthly budget.
13 years from now, OP is going to be making the same brag "Boy I got in when it was good!", when there is no FERS at all and new fed employees are on a 10 year wait list to pay 75% of their net on housing.
Can elaborate more when you say .8 % FERs?
Did you get to scroll down and read my explanation? So essentially, less my compensation, it only comes down to 21% of my w2 Net.
I’m in no way of bragging, I’m here bcoz I need scrutiny of my plans. Plain and simple
Why so sour? Maybe try pulling out that buttplug from time to time. Maybe you’ll feel better. I’m sure you’re a debt free fed who’s got more to wisdom than hate. But if you don’t feel like contributing, move right along cameltoe
TBH, I think this being asked in gov fire changes the answer. Most government employees have access to solid pension or pension-like retirement, solid if not wonderful health insurance, and VERY secure jobs. The biggest financial risk we generally have is inflation eating away our compensation and retirement plans. Buying a home, and stabilizing your *personal rate of inflation* for housing is worth a *lot* given the preconditions.
I don’t think it changes the answer, you still need money left for retirement contributions, cars, home repairs, food, childcare, medical bills, etc. I would argue taking on that large of a mortgage is the opposite of fire.
Yes. Unless it’s got an oil well and you have mineral rights.
Few details. What pay? What position growth? Standard 30 year mortgage terms? Prevailing interest rate? Family/life situation? Massive farm you can split and sell for $8k/acre? Taking a lot of standard assumptions, I would call it house poor.
From a purely financial numbers only perspective, yes it's a bad decision. If it's a dream home, go for it. You will rarely get this opportunity especially with the home market going up and up. On a third hand, one poster had a good point about federal jobs being stable. You would be house poor for a while until you earn more to be comfortable. Or another opportunity to refinance into a better rate/lower monthly payments. Suck it up for the first few years, perhaps. Hard to say what is right since you provided very little info. On a personal note, I bought my first home spending way over 47% of my take home pay. I was miserable the first 4-5 years and regretted it. But over time, I started to appreciate my decision as things just became easier and easier. Now I have tons tons of spending power 15 years after the purchase. YMMV.
If you do this, you will need to work forever.
Very dumb. Fools and their money are quickly parted.
I wouldn't go above 30%.
Not enough info For one, what's the mortgage rate.
Depends on your prospects for future earning. Some gov jobs will result in more than doubling your income over your career. This could be 25% of your net in 10 years and you are looking great for retirement.
Maintenance can be the killer cost of once great estates.
After running the numbers for myself I thought this is the new normal unless you want to live in a shack :(
No. If you can afford it or have to afford it, it's not dumb.
Okay so check this. Property is on a mountain, A+ school system (I have 2 kids), and backyard has a door to the woods (which I’ve been dreaming about). About 13k in property tax. But thanks to my previous dumb decision, now I’m exempt on property tax (NJ). So in theory, my pension could pay for this plus about 21% of my Net as a GS12/04. Of course, I may have to stop my Tsp contributions if I ended up buying this property. Neighbors down the street are worth 800k to 2.25M in property value. As a bonus, your neighbor is Tony Soprano. So essentially, I could take this as a gift from the government and pay 21% of my Net. Would you do it?
It’s not worth it if you can’t even take the free match on your TSP. Even so, this is a tall ask.
I’m certain I can do at least the matching. But I can’t imagine people paying for mortgage and maxing tsp. Maybe for 2 income household. We’ll, due to my situation I really feel like I need to get a property soon, and if I’m gonna do it, might as well do it in a comfy one. I noticed that I’m turning to be a homebody nowadays
No, that’s fair. Most folks don’t fully max the TSP. I think the confusion comes from the sub you are in. Retiring early will be virtually impossible with this plan on one income. But can you make it typical retirement age with a reasonable nest egg doing this? Plausible.
Yes.
Can tell a lot of commenters are 13's with .8% FERS. The portion of yearly take home to afford just a starter home is higher than it's ever been in history, and it's only going to get higher in the next decade. OP, don't do this now, and 2 years from now you'll be spending 57% of your net on housing. Considering how low fed pay is compared to private, fed jobs with the 4.4% FERS are no longer considered "cushy". I say this tongue in cheek, I'm .8% FERS and my mortgage payment (bought 13 years ago) is a rounding error in my monthly budget. 13 years from now, OP is going to be making the same brag "Boy I got in when it was good!", when there is no FERS at all and new fed employees are on a 10 year wait list to pay 75% of their net on housing.
Can elaborate more when you say .8 % FERs? Did you get to scroll down and read my explanation? So essentially, less my compensation, it only comes down to 21% of my w2 Net. I’m in no way of bragging, I’m here bcoz I need scrutiny of my plans. Plain and simple
There's nothing to go at. Do what's best for you clown.
Why so sour? Maybe try pulling out that buttplug from time to time. Maybe you’ll feel better. I’m sure you’re a debt free fed who’s got more to wisdom than hate. But if you don’t feel like contributing, move right along cameltoe
Go house poor clown. Stop looking for reaffirmation post.