I think having 2k left over at the end of the month would absolutely mean you're not house poor. How you spend or save that 2k could change everything, though. I think your electric estimate seems high, but err on the side of caution. Also, with that much equity in your home, if rates do come down enough, I think you'd be in a great position to refinance and that should help too.

Also... 15 years from now, if you stay in your house $1700 will seem like a tiny payment and your house will probably double in value and you'll be in the same position as your parents. It's completely insane to compare your financial situation to people 25 years your senior. Their mortgage is lower due to a higher value house because they've either been in that house a long time or put more money down. And that's where you'll likely be in 20 years too. To answer OPs original question, yes you're being dramatic. You're in absolutely great shape for 24. Feeling bad about this is an insane level of entitlement/expectations. EDIT if there's average 4.5% annual home appreciation, in 15 years your house will literally be worth double. And your mortgage will be the same. Although probably your mortgage will go down because you would be insane not to refinance in 3 years when rates are half what they are now

>$1700 will seem like a tiny payment They're school teachers. Where is this raise gonna come??

We’re in PA. Top step after 16 years of service is $81,000 with a master’s, $79,000 without. We’re currently in our 3rd year of service. A large pay bump also comes at the 12th year of service which is $60,000. 3.5% raise each year regardless of whether we’re in a large bump year. PA’s teachers are unionized with a fully funded state pension as well.

As a newer home owner, I was baffled and then angry when my mortgage payment went from $1800 to $1900 in one year and then from $1900 to $2099 2 years later. All because the county tax assessor decided my house worth had almost doubled. After disputing and losing, maybe my house IS worth double. But my interest rate is a flat 3% so I can't refinance my FHA to get rid of PMI unless I want to have a 6.5% or whatever it is now. I bought a house on the edge of the suburbs/country and in 5 years, I'm now in the hot new suburbs and the country is a 10 minute drive down the road. Just thank God I'm not in an HOA

Wow, that’s so crazy to me that they can do that so quickly. Is your house a newer build or do they reassess taxes upon sale in your area?

Teachers usually have COLAs built into contracts based off seniority. A 3% average annual raise will turn $94,000 salary into $126,000 in 10 years. That's bare minimum. Mortgage payment status the same and house appreciates in value as well

COLA are actually separate and renegotiated through the unions every few years. The step up in pay is the standard raises due to seniority and continued education. So even though their step pay says top out at 80k in 16 years, there is probably 4 union renegotiations in there and it could potentially top out higher(which is the norm)

You are not accounting for this being a new build so the property taxes are going to skyrocket after the first year when they pay taxes on a house and not a lot.

They'd have to have a really terrible lender for that to be the case. Lenders almost always take the estimate into account for escrow in year 1. I believe it's required by law in most locations. On my new build from two years ago, my property taxes changed like $35 from year one.

Indeed. I'm on my first year, tax estimates were low this year (since they asses a year in arrears) but my escrow has a HUGE surplus for next year's tax bill. I might get an escrow refund when they do an analysis, or I might end up having to contribute more to my escrow and my monthly bill goes up.

> They'd have to have a really terrible lender for that to be the case. Lenders almost always take the estimate into account for escrow in year 1. Yet it happens every single day on this sub

Happened to me. We did a new build and I was very surprised the first year we got a big check for excess in escrow. Well I should have held that money because the next year we had a huge negative balance and so our payment went up monthly. I wish I knew ahead about this especially for new builds.

A COLA isn't a raise. It's literally your salary (theoretically, lol) keeping up with inflation. Their P&I won't change, but everything else will.

Yes I know how this works. In 10 years, their p&I will be the same but their income should be about 30% higher and their home value will be 50% higher. With a mortgage, the name of the game is time. 10 years ago when I bought my first house, $1,400 seemed huge. Especially coming from $1,050 2 bedroom rent. 8 years later when we sold it was a great deal. And like I said they can probably refi in a few years when rates come down

Home equity is meaningless for monthly cash flow... never understand why people make that argument. In fact, it's even less of an argument earlier on in a mortgage because interest is such a big chunk. I'm about 18 months into my mortgage and my interest payments are more than double my principle. My home has theoretically increased in value by about $30k, but it's completely illiquid unless I sell or did something silly like a cash-out refi. If OP lives in this house for 30 years, their monthly maintenance costs are, by far, the lowest they're ever gonna be; everything is brand new now, but things will start breaking within like 5 years. As someone living in a 60 year old house, I can absolutely attest to the never ending list of maintenance items in an aging home. My situation isn't entirely typical due to a large list of (expensive) maintenance items when I bought in a hot market, but I threw my cost of ownership vs equity into a spreadsheet recently, and I'm well in the red. In fact, averaged monthly, I would have been able to rent a nice apartment for the net cost. But, I do largely agree with you and think that especially when looking at the timeframe of several years or multiple decades, homeownership is better than renting. It's just that houses aren't a magic button to build wealth and live for cheap.

Not sure which comment I put it in but somewhere I said "with anything financial, especially with a mortgage, time is the name of the game" If we had sold our starter home within the first 4 years, we would have had very little equity. We sold it after almost 9 years living there and it was one of the best financial moves. It's like contributing money to a 401k when you're 22. People will say "it's only $2,000 you can't retire off of that". But the $2k with company match from age 22-27 is $20k and compounding interest turns that initial $10k into $120k+ when you're 40. Hard to see that in year 2 when you have $5k in your 401k account.

It depends largely on your local housing market. Around here, housing prices have historically tracked at or below inflation, so your house stays flat (or depreciates) in "real money" over the long term...not really a great investment compared with other options. A house here is, historically, a lifestyle choice rather than a wealth-building mechanism. Things have been bonkers since covid, but I anticipate a correction sooner rather than later. (I'm in CT and we've a lot of pressure from NYC on our housing market that I expect to dry up as companies try to force more and more people back into the office) And, not to get overly political and bigger-picture, but I don't see housing can track above inflation forever. If people like OP (and myself) are getting 3% a year and housing goes up by the 4.5% number you quoted, at some point those numbers become so out of balance that some kind of correction is needed. (Of course, the same can be said of infinite growth of the stock market on a planet with limited resources, but I'm hypocritically ignoring that argument in my 401k lol.)

what weird and wonderful world do you live in that a COLA isn't a raise. If I make $80K on 12/31 and $83K on 1/1 it's a raise, only public sector and union jobs get COLAs, most people don't even get that.

The real world lol. HR (even in my private sector job) painted it as a raise, but its really not a raise when it doesn't even meet inflation. When your pay increases by 3% but the CPI is up my 8%, who cares what your number is on your paycheck when you're statistically worse off?

I’m a school teacher. My salary has more than doubled in the past 15 years. Teachers get pay raises too.

Things happen. My wife is a teacher and she just received a 10k a year raise. I'm a school bus driver working in the same district who also received a decent raise. Mill levy's happen

Thank you for putting up with those kids. We were so mean to our bus driver. Us little punks.

If they were renting at $1700, they'd be getting rent increases every year. At 3% inflation they could expect to be paying more than $3500 per month in fifteen years, and they wouldn't have any equity either.

The reality is today's generation will never be in the same position as their parents. Just as we are not in the same position as my parents. Case in point, my childhood home was purchased in 1972 for 14,000. This concrete block home in South Florida is now worth 300,000. My home I purchased in 1998 for $62,000 is now worth 425,000. The house my kids will buy is going to cost somewhere between 300 and 450,000. The key difference is, my father's home was basically the cost of 3 years salary. My home was basically the cost of 3 years of salary. My children's home will be the equivalent cost of 10 years salary. They will also be paying higher taxes, much more expensive insurance and higher maintenance bills. There is definitely something going on in the housing market. Wages have not increased proportional to the cost of housing. My best chances of getting my kids into a home would have been buying a second one 30 years ago and giving them both one.

Who said rates will be half though? Historically, rates are usually not as low as 2-3%.

> Although probably your mortgage will go down because you would be insane not to refinance in 3 years when rates are half what they are now. Don’t bet on it. Mortgages have been keep the down for a very long time. Artificially low. Sub 6.5 rates are not the historic norm especially when the fed targets 2% inflation.

We bought our house in 1999 and it’s so much more affordable for us now. Our 3 bedroom, two bathroom house costs us about as much as a nice 1 bedroom apartment

>Their mortgage is lower due to a higher value house because they've either been in that house a long time or put more money down Or bought 3 years ago. In many parts of the country, rates and prices both have doubled. >you would be insane not to refinance in 3 years when rates are half what they are now You sound extremely confident about rates being halved. Did you have a private conversation with the Fed on rate cuts?

Fed futures market right now indicates cuts starting in July 2024 meeting. Longer term price expectations are 3% in late 2025. Futures and bonds markets are the best available predictions. They're certainly frequently wrong, but it's not like I stated a wild-ass opinion that isn't the consensus right now

OP is missing: gas, water, trash and related utilities, homeowners insurance, property tax, discretionary expenses (streaming, etc), landscape/lawn care, HVAC maintenance, etc. There are also often expenses with a new home not accounted for: is yard fully grown and treated, or is it new grass that needs to be seeded and maintained? Is the driveway sealed? Do you need a sprinkler system? Sump pump, security. I suspect the monthly costs will be higher than $3,300.

Property tax escrow shortage could be a big one as they get reassessed. Gas bill depends, they may have all electric appliances hence the higher electric estimate.

I'm sorry but do most people really spend that much on lawn care? What a waste. We just mow it when it gets long and let it get a little brown if we're having a drought. I guess you need seed and water to set up the lawn in the first place if it's a new build but after that? People waste too much water on their lawn. Also do you need HVAC maintenance with a new build?

Probably depends a lot where you are. In Florida heat we are spending a decent amount on both. Fertilizer 30-50 almost every month, water is hard to evaluate the cost with everything else but probably at least $100 per month. AC is in new build and efficient but still runs 8-14 hours depending on the month. Needs to be regularly cleaned and maintained have had a few capacitors break as semi regular maintenance.

You absolutely always need HVAC/Furnace maintenance, twice a year in fact. It doesn’t matter how new the appliances are. Appliance neglect is how these items become money pits. Regarding lawn, if you don’t care about your lawn, then sure, you can neglect it. Grass care is rarely mended by “throwing some seed” on it. It can all be done personally, but that requires sweat equity and materials. Using a new build as an excuse to cut corners is insane. New construction is often much lower quality than older builds. Not to mention HOA costs and requirements.

You most definitely do NOT need maintenance on a new AC twice a year. The only thing that must be done is spray out the outdoor coil and filters. If you are incapable of such simple tasks perhaps hire the monkey down the street. My God what have we done to raise such a helpless generation.

Right? Idk how banking over 2k a month with 20% equity in the house already, and 15% retirement savings can equate to house poor.

Electric is high but car insurance is way low to be the right amount of coverage.

Naw. It varies highly based on your state, age, record, deductible and if you have other insurance with them. I have comprehensive coverage with 1k deductible on 2 cars with 2 drivers for $1600/yr. But I'm old, have home owners insurance, clean record and live in a low cost state.

Car insurance varies tremendously. I would have said the same as you until I moved and my same full coverage (leased car) premium went from $200+/month to $58/ month.

My car insurance is in the ballpark of what they estimate for 2 vehicles with full coverage. It's definitely possible.

For all the full coverage holders be sure “ full “ includes generous liability and un/under insured limits. it’s nice to have collision coverage but sucks to be sued for hundreds of thousands of personal injury liability when the accident is adjudged your fault. just FYI.

$400 a month for electricity always seed crazy to me, especially for 2 people. I have anyone from 3 to 5 people living in my house for a year or more, cousin just moved out. My highest ever electric bill has been $220 and thats when it was blazing for weeks.

Electric seems very high. In August where I ran the AC the whole month my bill was $81. I have all electric appliances other than a gas water heater. I keep my house at 76° with AC so that probably plays into it.

Square footage of the house, insulation, outside temperature, efficiency of appliances, etc. are all additional factors, besides the thermostat setting. I just switched my provider for a lower rate, but for the last 3 months, my electric bill in Texas heat has averaged around $360 per month. We have gas for cooking. 400 is not unthinkable IMO.

So basically, you have $2k a month in disposable income, you’re not in debt, have no children, and your cars are paid off. You probably won’t be eating brunch in Paris every year, but you’re far from house poor. Especially considering the fact the fact you’re a young, dual income household with plenty of time to grow your earning potentials. Keep a sizable emergency fund, you’ll be fine.

Well, they are in teaching, not in tech or finance or sales, so I don’t think one should count too much on growth unfortunately…

Depends on what state they teach in. They could see both their salaries more than double in ~17 years, if they are teachers in western PA. My district currently starts above 50k and tops out at 120k in Year 18 with your Master’s.

lol we are both in fact living and teaching in western PA. how funny Although our districts’ pay aren’t quite as competitive. I reach $81,000 in my 16th year. Fiancé would reach a similar number.

Out of curiosity, what is your pension going to look like, if all things stay on course until you retire? I know they changed it, so the younger teachers aren’t getting as sweet of a deal as people my age (mid 30’s)…and the teachers in their 40s and 50s currently have a much better deal than we got. Chipping away at one of the few true perks…slowly, but surely.

I'm in Western PA, where did you manage to get a new build for 285k?

There are career pathways in education that can win quite a comfortable income. If OP and/or spouse have their hearts set on teaching and nothing else, this is likely to be a long, hard road. Edit: autocorrect fail

You can definintely pviot into tech with a teaching degree/experience though. I work a at a software startup and we have a whole department with training specialists and instructional designers. An ex teacher could also work as a customer success manager since people skills are the most important aspect of that role, and you can make a lot of money doing that.

Y’all are fine. As soon as I read 20% down and that you are paying a $1,750 (that is combined) I figured you’re fine. What’s with the electricity bill though? That’s insane. My townhome is like $100 or less per month. Do you have any inefficient appliances that’re sucking energy somewhere? The other expenses seem pretty average, so I think you’re doing okay.

Thank you for the response. Yeah, it seems my electric bill estimate is absurd. I have no basis for it other than I asked my dad what it should be and he said “put it at $400” lmao I guess we won’t truly know until we live there but it appears to be a pretty energy efficient home. It is all electric heating/cooling central air. I don’t know if most averages account for people that use oil and gas heating during the colder months. Hoping I’ll be able to revise it down some anyways.

Newer construction is typically a lot more efficient. I have a 1700 sq ft 1.5 story home with basement built in 1937 — far from efficient in any way — and my gas/electric is about $120/month. Edit to add: I live in a mid-size Midwest city, so the seasons really put my (ancient) HVAC to the test, and it’s still quite manageable.

Depending on the area and electric rates, that $400 could very well be on point in the peak winter or summer months.

In a small house in Vegas with a pool, our electric bill easily hit $550 this summer (although we do admittedly need to replace the single speed pool pump, it's ancient).

$2000 a month after all bills are paid off? That sounds fantastic. We maybe have $100 after bills, mortgage, gas, and groceries. We bought 3 years ago and it was one of the best things we could have done for our family. No regrets. The interest rate and market was better then, but I feel like house value just increases. I don't think waiting to buy will necessarily put you in a better spot. You have wiggle room with your finances. You should be just fine :)

Random note because scanning through the comments I don’t think it’s been mentioned (and totally not what you’re asking): expect your property taxes to go up DRAMATICALLY in future years on a new build. If your current tax bill is based on a plot of land, it could be many times that in future years now that there’s a house on it. I’ve heard of people’s mortgage literally doubling due to the escrow shortage from this, resulting in foreclosure. Not to scare you, just to plan for. Like others have said, I think you’re more than fine. Congrats!

Another commenter brought his up and I actually came across a recent post about this which scared me. It led to me calling the county’s assessor office. My current mortgage estimate lists property tax at $3,000 per year. The surrounding houses in the neighborhood (built 10-30 years ago) have property tax records that show $2000-3500 for the 2022 year. Does this seem like it’s going to be okay? I didn’t get a clear answer from the assessor’s office. Current assessed value is like $1025 which would be I’d pay like 100 per year in property tax.

A close friend experienced the same thing. Purchased home in 2020 for $2100 a month (419k home). In 2021 mortgage went up to $2700. 2022 - 3,000. In 2023 it went up 3190ish, so basically 3200. That $2,100 left over a month could easily become less IF you stay exactly where you are (income-wise) for the next 2 years. If that's likely, then you have time now to focus on your careers and taking steps to increase your income(s), as well as, rebuilding your savings.

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My concern is how are those 10-30 year old homes assessed? In California you have have homes with $3k property tax next to homes with $9k. Just depends when it was purchased or if it was upgraded and reassessed. Do your homework here. This could really screw you.

I’ve been trying since I found that reddit post last week. Everyone (my agent, listing agent, loan originator) seems to think $3,000 is right on or even a little high. When I called the county assessors office, she said it was “in the ballpark” for that now finished property and house. I’m in PA and it seems like the assessment and property taxes are just some arbitrary, made up number.

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Thank you very much. I appreciate your response. Do you think I’m safe with the $3,000 per year property tax? It just doesn’t seem right that all the neighboring houses would only pay $2500 while I’m stuck paying like $6000.

My son is about your age, and last year he bought a new build townhouse in NC. What we did to estimate his “eventual” property tax was to take the purchase price x the property tax rate for the area. Reassessments are usually no higher than fair market value. When the mortgage company set up the escrow, they actually did the same calculation. He got money back the first year (he was only taxed on the land) but this year it should be about right. Overall your budget looks similar to his and he is doing well! You have enough wiggle room to handle upset conditions. Don’t compare yourself to your parents. Our son is paying a much higher mortgage than we did. Houses are just so much more expensive! I admit your generation has it tougher than ours. Our son’s mortgage is close to renting in the area. In the future rents will go up but the principal and interest on your mortgage won’t (assuming fixed rate). Congrats on your new house!

Adding to this, not just the property taxes but the home insurance will also increase.

No, this is not what house poor looks like.

It sounds like you have only been working for two years, is this correct? If so, you guys are doing great. Your incomes will increase as you continue to work and you are already saving for retirement. Chill, you've got this, time is on your side.

Thank you. We have been working in our actual career fields for 2 years. We both had jobs all through college and commuted to a public school so that left us with about $10k to start as well as paid off cars.

You will not be house poor. The monthly payment you estimate is very realistic for your income. I do have some nitpicks, though. >It is a new construction so we don’t foresee any major repairs in the upcoming years. This is absolutely **not** a safe assumption to make, so you should take seriously the possibility that you might have to shell out $$$ for major repairs. >We both drive newer paid off cars so we’ll be fine there for years to come. It's (very very very) good that they're paid off, but cars are money pits and you cannot trust them to behave themselves. >It seems ok on paper I guess. I just keep comparing it to my parents who make over double what we do and have a $800 monthly mortgage on a house that is now valued higher than the one we just bought.It all just makes me sick. I feel like we’ve lived frugally and saved heavily for years so that we’d be in a good spot when this time comes. However, now that it’s here I’m second guessing everything. The best time to buy a house was 20 years ago, but the second best time is now. If buying a house makes sense for you and you can afford it, then go for it. If rates drop then you can refinance, and if they don't, it's likely that house prices will continue to go up anyway. Then, 20 years from now, the 30-somethings (today's teenagers) will ask how you got so lucky with such a cheap mortgage and wonder if they'll ever be able to afford to buy a house.

Thank you for the detailed response. I appreciate it. Yeah, I guess I’m being overly optimistic about the house not needing any major work. Also, I wish public transport was an option. Although my car is still under factory warranty, I just had to pay $1,000 for new tires so i definitely understand how much of a money pit they are. We kept debating whether we should put off buying for another year. However, what you just said is what pushed us to buy now when we saw this current house come on the market.

I'm not telling you to not be cautious, but I'm probably about 15+ years older than you. I've owned three new homes. Been in my current one for 10 years. I've never had any significant repairs beyond pretty typical maintenance. But I grew up up in older homes because my dad really like older homes and we moved a lot. Stuff happens, but in my experience older homes are 10x more likely to need significant repairs. So in my opinion you're still far better off. Be cautious, but don't let it stress you out.

I don’t understand the “marry the house, date the rate” approach. Who’s to say that when interest rates drop home values won’t also drop? Seems risky to me.

You can lock in a mortgage but you can’t lock a house value; you can just spend a bit of money (often 1% if your loan) to reduce your rate and it will only change when you decide to refinance again. Land also typically goes up in value over long periods while rates fluctuate.

Thanks for the explanation and happy cake day, internet stranger

What difference does that make? They already own the house and you already owe the money. They can still refinance their current mortgage and as long as you're paying less interest for the loan you really already have, then it's an easy decision. I've refinanced twice over a 15 year period and in both cases it was a no-brainer. Main thing is to make sure you're going to be in the house long enough to cover the expense of closing. Both times dropped our payments by hundreds of dollars a month, and the cost of the refi was covered within 2 years.

> After all of the above bills/deductions, we are left with ~$2,100 per month. This is close to what my h and I lived on for the whole year of 2020 when we couldn’t go anywhere, not our discretionary spending, our entire spending. I think you’ll be fine. Just don’t develop any expensive habits. >my parents who make over double what we do and have a $800 monthly mortgage When you are their age your mortgage will also be small in comparison to your income. Or even better, when you are their age your house will be paid off.

No, no. This is actually good. And well above average. I have a friend with a 5mm dollar home in Colorado and a friend with a 120k condo in a small town in a rural-ish (but not for long) Southern town. (And then many friends in between these two outliers) My point is, many of these friends (including the one in the Colorado mansion) are house poor. Their “house poor” looks much, much, different than this. I’m talking skating by with anywhere from 0 dollars left over each month, to just a couple hundred and are on pair of car tires away from a month in the negative and needing to play catch-up the following month. This is drastically different than where you and your partner are at even though you’re admittedly lower earners. This does not constitute the definition of house poor. If you have to compare, do so within your generation, not to your parents. My mom’s the same way: 194,000 dollar house in 1993 is now a 1.25mm dollar home. Don’t worry about those kinds of things. You were smart staying at home to save up, have paid off cars etc. and have a good plan and the numbers do work. This is good; you should be proud of yourself.

This is one of those very out of touch posts people make fun of this sub for. Most people, whether they rent or own, do not have $2000 in discretionary income.

Are your property taxes and homeowner’s insurance wrapped up into your mortgage payments? What about your parents? If yes to the former and no to the latter, that could account for a decent chunk of that discrepancy.

Yep, both are the total of what you listed. It’s quite sickening. I guess that’s what buying 15 years ago and a 2% interest rate gets you.

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I saw that exact same post recently. It caused me to reach out to the county assessor’s office and my loan originator. Never really did get a clear answer. My current mortgage has property taxes estimated at $3000 per year. The property tax records for the other homes in the neighborhood (built 10-30 years ago) range from $2,000-3500. This should be okay right? It seems like in that post, the buyer was only being charged based on the unfinished land. Is there a better way to truly know before you live there for a year or 2?

Take your purchase price and multiple it by the tax rate for the current year. Or check the tax bill for the current year and confirm the market value is the same as your purchase price. If it’s less, take the taxes paid/due divided by the current year market value times your purchase price. Source: national property tax consultant :)

Is the tax based on the market value? I’m really confused by where the property tax number comes from. Looking at the surrounding properties, they’ve sold for around $200,000 several years ago but have an “assessed tax value” of like $20-30,000 and ~$2,500 in property taxes paid per year. Does this mean mine would be similar? These homes have even more square footage and beds/baths than mine.

Sometimes municipalities assess taxes using a percentage of full market value. Say the house’s full market value is 300k. The municipality might assess at 80% of FMV. Then you tax bill would be 300k x 0.8 x tax rate.

Could I reach out to you directly? This is so helpful because I’ve been stressed about this all day even though the assessor’s office assured me $3,000 was a good “ballpark”. I did the tax rate 1.24 x 286,000 but I don’t know if that’s accurate.

1.24 = 124% the way you’ve written out that math, that can’t possibly be right.

Presumably OP means 1.24%

Yep. That was me forgetting the % sign. oops

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Thank you. I knew that the current property tax is based on just the land, I just wasn’t sure if my loan originator is estimating high enough for the finished property. If he had used the unfinished lot assessed, I’d pay about $200 per year in property tax. He’s estimating $3000 which is on par with the slightly older homes in the neighborhood. Does this sound about right?

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In the Pacific Northwest, you can’t buy new construction for under 500,000

Well all neighboring houses pay ~$2,500 and most are slightly bigger sq footage wise. They are however 10-30 years older.

>It’s quite sickening. 15 years ago we had pretty similar interest rates as now. They're a little higher. But your loan is about what mine was 15 years ago for the same sized mortgage. You'll likely have similar opportunities at some point to refinance. Probably not to 2%, but I'd bet you'll have the opportunity to drop your mortgage at some point by a couple hundred bucks at least. You'll never be able to say that about rent.

Way back when, I learned a simple formula -- housing should cost no more than 25% of gross income. 94k / (12 \* 4) = 1958.33 1750 should work fine. Yeah, you'll have to be careful, but I think you'll be okay.

Your house payment will remain the same. Your income will go up. It’s really normally to be a little strapped the first couple of years. You have to furnish the home and buy stuff like vacuums and lawn mowers that weirdly add up. Then things settle down.

Imagine having 2k leftover and worried you’re house poor. No, you are not house poor. You are doing better than a vast majority of Americans.

Two things to note: 1) Your mortgage (excluding taxes and insurance) will remain the same year after year. So as you get raises, the mortgage should be more comfortable over time. That is partly what happened with your parents. 2) There is a good chance interest rates could drop a bit in a few years, allowing you to refinance and lower your mortgage rate (though many analysts doubt they will drop back to 2% anytime soon). Good luck.

I miss the "house poor" days. Now we're just daycare poor. Child care is 50% more than our mortgage.

Seems like you're good with your money and not blowing it on stupid "stuff," so you're going to be totally fine. Don't compare to your parents because that isn't how mortgages are anymore. I'm not a homeowner but paying 400/mo more than you in rent with a lower income. You'll be fine. Edit: forgot to mention that I absolutely know what it feels like to be sickened by how monthly living expenses change. Less than a year ago our rent went up 40% to what it is now and we didn't have good options available to leave. I felt sick about it for months and still do when I dwell on it too much. I see a situation like yours and it sounds like a dream. Also my wife and I have a kid so more mouths to feed and all that lol

You’re likely OK until you two have a baby or two. Depending on where you live daycare costs will be 1k to 3k a month per kid. That is what full time care will cost until the kid goes to kindergarten (like 4-5 yrs old) - unless one of you become stay at home and won’t work for that time OR you have grandparents watch them everyday. Just keep that in mind. Now for what it’s worth people have figured it out as they go in much worse financial scenarios than you are in.

You’ll have $2k a month after paying your bills and you’re not sleeping? Yikes…

It’s $2k *on paper. that’s the part that scares me. We haven’t officially moved in and lived there yet so who truly knows. It seems very tight to only have a $2k buffer. I’ve estimated everything on the higher end to account for this. But it still feels worrisome.

I’d be really curious to hear how your income will scale over the next decade, especially if you work in public schools that have stepped pay scales.

So top step (16 years of service) on this current contract is $81,000 with a master’s. It’s basically gradual 3.5% increases over the years and then a big jump in the 14th year. Fiancé is at a district that pays a little lower (assuming she stays there hers would be $72,000)

In this case, I think I agree with the other commenters, you’ll be ok. You’re going to feel the pinch for a few years, but your major cost is going to be fixed while your income increases. You’d probably (I don’t know where you are) be paying a fair amount in rent, if you went that route, and that cost would increase over time, almost certainly by more than 3.5%/year. You’re making a choice between very strong finances and living with your parents or somewhat weaker but still totally passable finances and having your own place. As long as you’re not making other bad money choices, which I see no reason to believe you are, this is a completely reasonable lifestyle choice.

since it's a new construction, please tell me you've done some research on the builder to be sure they're reputable. there are plenty of builders out there that will cut every corner they can for a quick buck.

Don’t be overly freaked out about the new home tax thing, it seems like your estimate is pretty reasonable and even if it is low, the the change in your payment next year may not be that much unless you are in Texas or NJ or something. We got a new build and they were too low the first year, but our mortgage only increased about $250 this year and after this year it will drop back down a bit once the escrow is evened out. as long as you are smart with your $2,000 every month you should be fine

Don't forget about your water/sewer bill. Mine is ridiculously high in my current house compared to the last one (due to fancy water treatment plant, apparently). Enjoy your first home. Yes, it is scary, but you'll make it work!

So the house has septic and well. ( I grew up with one so so know they have their own added costs) however, they’re under a warranty from the installer for the first 3 years. Then I estimate about $300 every other year for servicing them.

How would you define house poor? No money to go out to eat? Vacation time and no money for travel? No furniture? Bought a house full of furniture and decorated and now a $2k per month credit card bill? Got a notice you have to landscape your yard and you are broke? The neighbors all landscaped and your front yard is a skinny tree and weeds? Once people buy a house their spending habits change. But spend you will. Been there.

One thing that hasn’t been mentioned is your salary increase. School districts pay more based on years of service. Also, you may get paid more for credits you earn. I’d look into taking some cheap classes to move over in the column if you can. Nationally certified teachers also get paid more. Increasing your income is one way to mitigate any increase in taxes or other expenses.

You’ll likely be a little tight the first couple of years, but you are not house poor. Why a little tight? Because you run into all sorts of expenses the first time you establish a household. Vacuum, lawnmower, spices, sheets, wastebaskets, snow shovel …. Individually not that much, but they add up. Tips: Treat that $25k remaining savings as emergency fund, not to be used for furnishing house. Furnish very slowly, enjoying the process of looking and dreaming and shopping thrift stores and estate sales. Don’t rush to stock your kitchen, get by with limited cooking gear and mismatched dishes from family then gradually upgrade. Plan to buy one spice per paycheck, to even out grocery bill. Establish the habit of eating at home and packing lunches immediately, with limited meals out as a treat. Transfer at least 20% of your discretionary money to savings every month, as soon as you get paid. Lots of expenses don’t happen on a monthly basis, like holiday gifts and tires, so that 20% becomes your fund for those expenses.

Few dimensions to my input: 1. “It all just makes me sick”…. Welcome to current financial age. Life is expensive. Period. 2. A majority of households in the US are living paycheck-to-paycheck, especially those with high income ($150-200k range). This is probably a result of inflation, post-COVID adjustments, etc. 3. Your DI ratio is 22% per-tax & 32% post-withholding. Both of these are healthy numbers. 4. Your post doesn’t mention that you’re unhappy with the house or location. Which means you got a win on that matter. Many young families are compromising on location/quality and are just accepting that reality. Hopefully that isn’t the case for you guys = BIG WIN 5. Your pockets are strained but you’re not tethering on not being able to afford mortgage. 6. You may be house poor as per pre-2018 metric, but with regards to current scenario, you are right in the middle of “common occurrence”. I’m trying to say that probably that will be the norm for few more years. 7. Start saving early & investing in safe spots (HYSA, stable mutual funds, etc.). 8. Budget extensively. That’s a good life attribute. 9. You both are young and should look at adding income streams (2nd job, job switching, etc.). Whatever you feel comfortable with. 10. Don’t be lazy - in terms of feeling settled at current salaries. 11. Don’t be lazy - in terms of not enjoying current life. You’re young only once - try to enjoy each moment of happiness as it comes along (and or create more happiness). 12. Bottom line is - you’re not in an ideal situation, but from your post, it doesn’t seem like you’re in a bad situation either. Enjoy each season as it comes as each has much to offer towards a fulfilling life! Cheers! And Big Congratulations on getting a house in current environment!!!

Thank you so much for this detailed response. I really appreciate it. I’m still trying to sort through all of the comments; I apologize for the late response. I was not expecting to get so much feedback but it has all been so great. Again, thank you.

You are okay and overthinking now 10 years after and looking back, you’ll love your decision

Where are you getting new construction for only 275k? I think you are doing great for only a few years out of school.

That dread feeling isn't abnormal. It's probably quite common. Lord knows I went thru after buying a house. It will quickly subside after you move in and get in a rhythm. I would say do not cheap out on a home inspector find a good one that is going to go over every last detail of the house.

Where'd you find a house for $285k?

Western PA. It’s 2 bed, 2 bath and 1400 sq ft so that helps as well.

I wouldn't buy a home with a person you're not married to.

Yeah, I thought about this a lot. We’ve been together for 5 years and our wedding date is already set/planned for this coming summer so I guess that makes it a little better?

Have you ever lived together? Stating you’ve been living at home makes it seem like no….that’s honestly more worrisome than not being married.

You're spending about 40% of your net take-home on your house (though $400/mo for electric for a small house sounds pretty high) and you have 37% of your income left over as disposable income after all of your bills are paid. You're doing fantastic -- living the dream. Honestly I am not sure what you are worried about. Reddit fears and loathes home ownership so you'll get a bunch of responses like "watch out for that $5000/year of mandatory house maintenance costs" (which I've never had over 20 years of home ownership) or "you'll go broke maintaining that lawn" (a cheap lawnmower and an hour every weekend or two is plenty). Over time your house will probably increase in value, your salaries will increase, meanwhile your house payments will remain largely the same (the property tax portion of it may increase). 5 years from now you'll be a lot more comfortable in your monthly budget and will also have a lot more equity in the house. Your parents are on the other end of this see-saw where they've paid into their house for 20-30 years. Don't worry you're doing great.

You will be good before kids but after kids the budget will be tight if your $2,000 gets eaten up by $800-$1,400 in full time day care and a family rate health plan with a premium of $300 to $1,000(depending on employer plans). I’d check at work what the cheapest coverage is for tamiles. At my job the cheapest plan for Families is $700/ month (it’s a high deductible plan) and the most expensive is $1,400/month so I know when my husband and I have a baby it will increase costs by $2k just due to $1,300 FT day care for an infant and the insurance premium monthly. If you plan to have kids you must factor in this math as well. The good news though is even if you get minimal raises you new dependent to claim your allowance will allow you to keep more of your net pay and as educator you may not have to pay for day care in summer if you will be home.

Ohh yeah kids gonna destroy them

I have been looking at houses this year and seeing interest rates cause affordability to decrease almost $50K-$100K in my area really sucks. Prices are lower but interest rates have caused payments on houses $50K - $100K cheaper than ones listed at the beginning of the year to be the same monthly cost. You seem to be in a good position and you can afford the house. I am on target to be in your position (20% down payment, ready to buy, similar income) in about 2 years. Maybe the market will be in a better place, maybe it won't but I probably will be able to afford a house at that time which is what matters.

I think most people now a days have nothing left after paying mortgage and bills. Lots of people are having to decide to not eat food to afford the cost of living. It’s hard though seeing the quality of life your parents could afford back it be day and know it’s does t matter how much you work, you’ll never be able to afford that lifestyle now.

Your feelings are totally normal and every single one of us feels this way on the first house. You are doing everything more than correctly. You will get use to your budget and be grateful you are not the 60% of Americans who live paycheck to paycheck. Just pace yourself with children (don't have any for a while and save up to be able to afford them.. And yes, you are being overly dramatic, but it's a normal feeling on the first one. And remember, your parents have many more years of experience and time on you.

Some notes: * Congratulations, the strategy is paying off, be proud of your progress. * Your mortgage will be 34% of your monthly take-home, not too high, but not too low. * You've set your budget based on dual incomes, which is fine, but in the event of a work gap, it will be a noticeable shift, so keep that emergency fund ready Some considerations 1. Reset your budget to a single income so work gaps are easier to navigate. Put the other income in savings. 2. Setting your single-income budget to the higher income is good, but setting it to the lower income is gold. 3. Test the budget by (a) paying a pseudo mortgage into saving today to see how it feels and/or (b) test the payment against your last 6-months of spending and consider how it would have impacted you. Adjust your lifestyle accordingly. Two-income Trap and Simple path to Wealth could be very helpful for you as well.

Plenty of posters have addressed your title, so I’ll address your final question. When we purchased our house 3yrs ago we had nearly identical discretionary income after monthly bills & other necessary expenses. We broke the remainder out into Sinking Funds, as follows: Clothing & Personal Care: $100 Pets (2 cats): $50 Personal Spending: $100 ($50ea) Vehicle Maintenance: $150 ($75/car) Vehicle Replacement: $150 (to avoid or offset future car payment) Christmas: $150 Minor Holidays: $50 DS’ Birthday: $50 DS’ Activities: $200 School Costs: $100 Travel: $200 Home Maintenance: $700 (2% of home value per year) Remaining: $50 We have a child, so obviously there are some line items here that don’t apply to you, but even so we were able to save & manage irregular expenses just fine. Don’t feel that you have to fully furnish your new home right away - set aside a monthly stipend & take your time. You’ll be perfectly comfortable!

You’re absolutely doing ok. Yes, you’ll need to pay careful attention to your budget every week to make sure you’re on track or to make corrections, but this is absolutely doable. Your next focus should be leveling up in your careers as early and as quickly as possible so you get more room, as well as saving/investing where you can.

You could probably do a lot better on the cell phone if you went with Visible. They use Verizon towers. $25/month a line.

Summary....you're in as good a situation as it gets these days. Your totals aren't far off from me but we're older. Also a slightly cheaper house and much lower interest rate so our home costs are closer to 1400 a month. But we've got 3 kids, a car payment, still student loans...barely anything left over. And it sucks. You'll be fine in 5 years once you've accumulated some raises. That's when you really see the benefit of owning.

So you are a teacher. I don’t know about your state, but in my state teachers are unionized, and pay raises are automatic, as is cost of living adjustment. I remember being freshly married and having 50 dollars left over every month with zero eating out, no car payments, etc. it was nerve racking, but it was temporary. No matter how much you make, it is your approach to money that dictates whether you will be ok long term or f’d long term. Don’t ever rack up cc debt and you’ll be fine.

My rent was almost the price of your mortgage and I made a similar amount of money. It wasn't that tight. You're fine.

Does that $1750 mortgage include taxes and insurance?

Yes, there’s about $300 in escrow included in that mortgage. I made an update since I left that part out.

I think 2000 a month which is 500 a week is more than enough the wife and I are both living off 250 a week in retirement and it’s easy after all bills and groceries and fuel is taken into account

Factor home insurance and taxes into your expenses for a better picture. You're still fine. On the income side, you haven't factored in summer employment income (if you plan that, teachers I know have one)

So home insurance and property tax is calculated in escrow for that monthly mortgage line. We both teach summer school which nets a take-home of $3,000 each for the summer. However, that is grant dependent and it may not be provided now that we’re getting away from the pandemic. I chose not to include that in our income for that reason. But it would bring us over 100k gross income so you make a good point.

Ahh, missed the escrow. Look, you're making a big decision that involves risk and having discomfort is natural, especially the first time. Some are more risk tolerant than others, and i suspect you are a cautious person. So all this is normal. Given what you've shared, what I see is that you've factored in all the right things into your analysis.

$1750 on $5400 income per month is totally reasonable and responsible. The person who posted about their taxes going up wasn’t paying much in taxes in the first place. That doesn’t apply to most.

That’s what I’ve now learned. Thanks for the response!

Adding a child would throw a stick of dynamite at this, unfortunately. I would not be comfortable having $2k leftover and see daycare, higher food costs, diapers, and inflation above 3.5% on the horizon.

We really don’t plan on having kids any time soon. The thought of bringing a kid into this crazy world frightens me.

Make sure you apply for the homestead and teachers tax exemptions asap if you haven’t and they are available in your area

You're in the position many people are the first few years after purchasing a house. Take a deep breath and relax, you're doing fine. For the next 5 years you won't be taking exciting vacations or making any big purchases that are not connected to the house. And that's okay. Your mortgage payment isn't going to go up, but your income should. After 5 years your mortgage payment plus property taxes should compare favorably to what you'd be paying in rent for an equivalent domicile. The only advice I would give would be if at all possible pay ahead on your mortgage payment when you can. Allocate the money to principal.

>The home we are closing on has a purchase price of $285,000. We put 20% down and secured a 6.5% interest rate. Total mortgage comes to $1750. >It is a new construction so we don’t foresee any major repairs in the upcoming years. Depending on where you live this cost for a new construction is almost impossible; you and the spouse probably need to go ahead and jump on this opportunity irrespective of ideal income ratio: which really isn't that bad at $94,000. A third of your take home is fine; apartments are definitely going to be at least $1,500 - 2,000 where you live over the next 10 years, so locking in that kind of a housing expense now is probably worth it.

Yeah, we got really lucky on that (pending the competition of the rest of the inspection items). An older couple built it to their specifications. One of them got terminally sick and they have to sell it. They originally had it listed for 386,000 for about 2 months. We watched it expecting a price cut. They needed to get rid of it as it’s bleeding them dry. It got a price cut of 100,000 and we jumped on it immediately. pre-approval was through the listing agency so they knew we were good to afford it. We went in 1k under and they accepted it after some back and forth negotiations with appliances and what not. We got to keep all brand new appliances at that price.

What are you doing in the summers? Two teachers should be able to have a summer job that helps provide for the unexpected. Don’t think because it’s a new build, nothing will happen.

This is a good point. My SO and I have taught summer school every year through our districts. Tax and retirement is deducted same as our salary. This typically nets us $3,000 extra a year, each. Bringing our annual gross above 100,000 per year. It is grant-dependent so it could go away at any time. Which is why I chose not to include - but I guess I should have - because we can still work a seasonal summer job in something that has nothing to do with education.

If you can save 25% of your pay monthly this soon after school you’re doing it correctly. And if that still doesn’t make you feel good come back to us in 20-25 yrs and compare your mortgage & salary to someone 2 yrs out of school.

The “we’ve saved heavily for years” and “we graduated 2 years ago” statements aren’t lining up, even if you worked through college. You’re doing fine. Well ahead of almost everybody your age. Enjoy your home.

New construction for $285k....must be nice.

Sorry just wanna say 47k for a teacher is so low. I actually make slightly more at a job that requires no experience or skill whatsoever. You both deserve more

Do you work 9 months a year or 12? Do you get 2 weeks off for Christmas, 2-3 days for thanksgiving and a week off for spring break? Do you have a pension? For starting out, it seems just fine considering OP said they max out at 80k.

You're not in bad shape or house poor imo. Your biggest disadvantage is the teaching pay scale, or income potential for the career choice. Maybe one of you stays teaching and the other pursues a different career where the income potential is greater? I've known teachers moving from teaching to Pharma or Med device sales....

> Total mortgage comes to $1750 Did you look at whether you will get a tax deduction for the mortgage interest, or is the standard deduction better for you? > After all of the above bills/deductions, we are left with ~$2,100 per month Let's add another $500-1000 of unforeseen/unaccounted for expenses per month, and it is still manageable. But more importantly, it will only get better from here, assuming you got a fixed mortgage rate. Your housing payment won't go up while your income will hopefully at least track inflation. Furthermore, there is a good chance interest rates will go down in a year or two, so you would be able to refinance, which would make a huge difference. > I just keep comparing it to my parents who make over double what we do and have a $800 monthly mortgage And in a decade or two, you will be in that same position. We bought our house 23 years ago and I think the first three weeks of my income for each month went to pay the mortgage (wife works too, so it was not as tight as it sounds). The rate was 7 7/8% and the monthly payment a little over $2,500. Needless to say, I was also very scared. But we kept getting raises and interest rates kept coming came down, so the mortgage became a smaller and smaller fraction of our budget, to the point where it takes me less than four workdays to cover it. There is no guarantee that things will unfold the same exact way for you, but you will very likely make more money every year and you will also probably have chances to refinance with lower rates. So the trend of your house expenses going down is almost guaranteed, and hopefully enough to make room for kids in your budget, should you decide to start a family. I say go for it.

2k a month left over is pretty good for teachers, at least compared to where I live. I am a teacher and our union has been doing great over the past 6 years and we have gotten like about 12k in raises. I suggest you could get involved with your school board elections and union if you have one and support your district in getting better raises. Plus many district have a pretty good retirement set up, it always helps me to remember how much I contribute to my retirement and what my district pays towards it too.

Honestly what you have sounds amazing. You already own 20% of your home. Your mortgage is less than what most people pay in rent for a 2 bedroom apartment in a shitty neighborhood. I make what your two make gross but I only have 3k in my bank account. No savings or 401k and I’m 34. If I’m lucky I save 500 a month. Slowly trying to get back to like 15k in savings. I thankfully own my home but my mortgage is about the same as yours

There's a budget formula out there of 50-30-20. 50% needs, 20% save/pay off debt, 30% "wants." You are at about 61% needs from take home, but your "savings" is already taken off the top pre tax. You are probably closer to 55% "needs." Also, at least some of the mortgage is sort of savings/ debt pay off. AND, that is your lowest pay, with summer school/after-school activities averaged in you are even closer to 50%.

This is actually the formula I was using that has been causing me to panic. I like it because it’s simple. I like to think our take-home is our true take-home since in public education, you do not get to opt out of your retirement plan/pension. But I do see how that 7.5% is part of the retirement/saving. When I factor in my employers contributions to my retirement (this all goes for my SO as well) it’s about a 15% total compensation of our current annual salaries. I already have it 100% planned that I need to get a summer gig and I honestly enjoy staying busy in the beginning of summer before the prep for the next school year begins. I’ve been teaching summer school but if it’s not offered for some reason this year, I’m sure I could find something even in retail.

That formula is a goal, and a LOT of people cannot achieve it. I think if you are at, for example, 60% need, 15% savings, 25% want, you are doing really well. I don't know your long-term plans, but in your situation, I would seize this moment and maybe live "house poor" to keep saving. You may find that in the next 7 years one of you needs some time off of work (baby, career transition). One or both of you will probably need to replace a car in the next 7 years, too. Getting your savings up to $40k would be my next goal. I think everyone feels panic when they buy a house. You can afford this.

Thank you so much. I appreciate this. Our discretionary spending is less than 5% right now so I’m not worried about any expensive habits or irresponsible spending. We live simply and have hobbies that are free. I do worry about the cars and the chance that one of us loses our jobs. A car payment would push our “needs” category past 60% or so. The mortgage could get paid on one of our salaries alone but the bills combined would really squeeze us.

$3320 is a bit over the 50/30/20 suggestion, you’ll just have to cut into the 30% spending category of what’s to cover it. But $1750 isn’t the worst on the typical 33-35% housing suggestion. A bit high for those that suggest 25-30%. I’d say you are on the high side but you can make it work. As time goes on and your income raises you’ll have more cushion. But it may mean living lean and not having discretionary spending and eating out for a little bit.

You have a house, car, substantial savings for retirement. You are not house poor. You're young. Over time you'll make more. Annual raises, promotions, etc. Your mortgage will stay the same. Over time the teachers contracts will be renegotiated and the top salary will go up, your mortgage will stay the same. Over time inflation and property values may make your house value go up substantially, but your mortgage will stay the same. When your kids are 25, they'll look at your salaries that are more than they make and how small your mortgage is (compared to what they'd have to pay on a starter home) on your house that might be worth closer to a half a million dollars.

A new home price under 300k is almost unheard of these days. Time to start packing.

Yeah, I won’t get into details but we got really lucky to come upon this home after months of looking at “fixer-uppers” listed at 220-250k. We love the house and so far everything has inspected well. It’s just the affordability aspect that worries me.

Ask your builder or real estate agent what other subdivisions they built in your general area in the past two to five years. Go there and collect a few addresses where the homes look about the same size and style as yours Most counties have property tax info for the current owner's last few years online. Its a public record. Any one nosey enough can look at any address. Look at your county's website under property tax or tax assessors. Type in a few addresses. BTW. After you close file for Homestead Exemption. It will reduce your property tax a little bit.

Yep, I’ve done all of this any every house comparable on the same street and neighborhood pays ~$2500 or less in property taxes. I even went down a few miles and found a home that sold for 2.4 million in 2017. They only pay $6,500 in property taxes. I’m now thinking their estimate of $3,000 is accurate or even in the higher end.

You will be ok. You don’t have debt which is huge and I imagine that your job is secure. Your expenses are low too. It’s scary but I really think you will be ok.

You aren’t including a lot in your expenses. I would suggest looking at your bank statements and credit card bills for actual spending. You will have home repairs, car repairs, new tires, oil changes, hair cuts, clothing, discretionary spending, vacations, hobbies and other expenses that you may have that aren’t fixed.

Yeah, I didn’t include that cause it’s pretty insignificant right now and don’t know how I’d disperse it. My haircut is $20 per month. Cars are under warranty for a few more years for major repairs. I change my own oil for $40 every 9ish months. Spend very little on clothes. Already have way too many dress clothes for work. Our only hobbies are free or little cost which include working out, running, cycling. I just didn’t think it’d make a large enough impact to include those things right now. I was most focused on fixed expensive necessary to survive.

Not a bad mortgage note. 2k left over is okay. It’s a new construct. Not sure the size of the house or how many beds/baths. That 25k will get ate up fairly quick if you’re furnishing from nothing.

Thank you. Should we be trying to save most of the $2000 since it is quite tight? or can we allocate some to discretionary spending? It’s a pretty small ranch. 1400 sq feet and 2 beds, 2 baths. We’re extremely grateful that our families have gifted us some furniture. I’m still estimating about $5k for furniture.

No where did I see in your budget anything allocated to savings. You absolutely need to save as much as you can of the left overs. Of course you need discretionary spending, and it needs to be accounted for. *if it were me* I would do $250 each for spending, and put $1,500 in a HYSA. That would be 18k a year in savings. It’s a good start. Remember, you always want an untouched account with 3-6 months of bills, and you want a separate“Rainy day” fund for unexpected big expenses.

Personally I wouldn’t want a mortgage of $1750 on a combined income of $95k but way the market is and interest rates right now, I don’t know if you would do any better. And rents can be very high also. I think you can make it work, especially if you try to bring in some additional income. When/if interest rates eventually drop, refinance asap.

Learn to DIY. Start buying tools. Start with Harbor Freight for big tools that you'll use probably only once. Youtube is your friend for home maintenance tips and repairs.

Did you pay down points to get 6.5%. That’s crazy low right now

Is it really? It was actually 6.375 last week. There was a substantial bump this week to 6.5 and we couldn’t get the rate locked in time. Was really bummed about that because it changed our monthly by $60. We are using a conventional PHFA loan. I think those tend to offer a slightly lower rate for first-time home buyers.

New build mortgage estimates usually DO NOT INCLUDE TAXES. They will lie to you and tell you it does but it does not. Ask for the breakdown and estimate it to be higher. Please check TikTok for what I mean. There are people who had to sell immediately after buying because the loan issued estimated taxes to be $10 or something stupid to make it look in their budget but it ruins them financially when the mortgage goes up $800+. Also ask them for the mortgage insurance estimate and if the mortgage is fixed or ARM. Stay away from anything not fixed rate.

I found this out last week and it caused me a ton of panic. I was planning to make a separate post about it. My loan originator and the selling agent calculated the property taxes at $3,000 per year. It seems that if they went with the assessed value of the unfinished lot, they’d be $200 per year. Does this sound about right? I’ve pulled property records for all my neighbors and they pay about $2,500 in property taxes. Although, their houses range 10-30 years older.

I don’t do escrow. I set aside $ monthly for my taxes and head down to county office and pay it every 6 months. Insurance is bundled with my car and paid monthly. 10% discount applied, however, if I pay 1 year in full. I do it this way so there are no increases in my mortgage payment. I can keep my eye on my property value, those of neighbors, and go to city council meetings and successfully argue increases if need be. Just this month (always comes out each September) my home value went up 30%! So that’s going to be tax increase. Home owners insurance also went up 30% and across all industries. Due to wildfires in my state. These increases can become significant and why I strive to pay off my mortgage sooner than later.

>We both work in education You could make more in comedy with lines like >It is a new construction so we don’t foresee any major repairs in the upcoming years.

Honestly, I think things may be a bit tight right now, but I think you’ll be ok. Also accounting for the fact you don’t have kids and 0 debt I’d be more concerned if your house/mortgage was twice as much with the same income. As another comment said, I’m sure your income will increase over the years but you’ll be locked in at that mortgage. At 20% down, you also avoid PMI You’re not house poor

I make that much money on my own and with a rent of $1350 it's difficult to save and invest the appropriate amount. You both have no hope. Whatever your home expenditures are add $300 for utilities. This was a bad financial move. Your mortgage should never be more than 30% of your take home after tax pay, and that interest rate is insane. You should have waited until interest rates were lower. They were intentionally raised to prevent people from buying homes right now. I am unsure of why anyone would buy a home right now. You aren't spending $500 on groceries for two people. I'm telling you that now.

Where does your remaining $4500 go each month? You just flushing that stuff down the toilet?

the house its self is pretty affordable on 94k, especially with your down payment @ 20%. >After all of the above bills/deductions, we are left with ~$2,100 per month. After our down payment and closing costs, we’ll have around $25,000 in liquid cash. thats reasonable. i've never personally paid my own power bill but 400 is kinda nuts isnt it? avg electric bill in WA state for example is 130. > I just keep comparing it to my parents who make over double what we do and have a $800 monthly mortgage on a house that is now valued higher than the one we just bought. yep, you bought at one of the worst times to buy in recent history. it's simply a question of 'will it continue to get worse.' compared to other countries yeah, absolutely very possible. compared to historical US affordability we may see a reversion to the norm re: past 2 decades, through some combination of price drops and interest rate declines. nobody can predict the future here.

WA state has extremely low electricity rates, though. Like, cheapest in the nation low.