high mortgage?

[maedelken]

okay I am freaking out we are about to buy a house. It is a big step up from our townhouse that we live in now it will double our mortgage. So my DH says it is a good move because in a few years he feels we will have less buying power so I trust him. SO our mortgage will be 3,500 a month does anybody else have a mortgage like that and how do you make it work? He also told me that we will grow into our payment. I just feel like I can't breath we are very comfortable now and it just sucks to go back to wondering if you will have enough money to pay the bills. Can anyone make me feel less stressed out. does anyone know anything about rates if I do an 5 yr arm do you think rates will go up or down. The 3500 payment is a 30 yr fixed.

 

[CarolA]

YIKES! To me that seems high, but I know nothing about the market where you are.

That said, just because you CAN qualify doesn't mean you should. If this is going to "strech" you and send you into this panic I would walk! I don't believe in the "growing" into it theory. Does that mean in the meantime you don't do anything but pay the house note? IMHO that's not living.... Plus NONE of us are blessed with the "crystal ball" How do you KNOW you will "grow" into the payment? What if one of you loses your job? What if the "promotions" don't come etc?

I would not agree to a mortgage where I had to worry about paying the "rest of the bills" Sounds too much like living on the edge IMHO.

This house needs to fit in with all the goals, not just the "getting a big house" goal.

 

[formernyer]

It's impossible to assess your ability to repay this debt without also knowing your annual income and all of your other debt/expenses.

 

[ICF]

Wow!! That seems like a lot to me, but I'm a long way from the Maryland housing market.

If you have to worry about paying the "rest of the bills" then the mortgage is too high, IMO.

To some extent, I would agree that you should "grow" into the payment as your salary and such increases......however.....what would happen if you / he lose your job or something like that? Are you going to have savings to live off of until another one comes along w/that time of mortgage each month?

There is a ratio that is often mentioned as to what % of your income should go to your mortgage. I can't remember for sure, but think it is something along the lines of 30-35% at most. Where does that $3500 put the % at for you?

 

[punkin]

okay I am freaking out we are about to buy a house. It is a big step up from our townhouse that we live in now it will double our mortgage. So my DH says it is a good move because in a few years he feels we will have less buying power so I trust him. SO our mortgage will be 3,500 a month does anybody else have a mortgage like that and how do you make it work? He also told me that we will grow into our payment. I just feel like I can't breath we are very comfortable now and it just sucks to go back to wondering if you will have enough money to pay the bills. Can anyone make me feel less stressed out. does anyone know anything about rates if I do an 5 yr arm do you think rates will go up or down. The 3500 payment is a 30 yr fixed.

In Baltimore??? You've got to be kidding. That sounds awfully high. Of course, our mortgage is about that and it's an ARM. I am shaking to see where interest rates are in 4 years when we have to refinance.

What does your husband mean you will have less purchasing power in a couple of years?

 

[maedelken]

We are moving to Catonsville were are you guys located? It is in the Oak Forest area if you are familar. It is a five bedroom 600,000 house. Does that still sound like a high payment for a house around that price. My husband feels like rates and housing prices will go up and we won't be able to get the same kind of house for the price we can get it for now.

 

[srgibbs]

Yikes that seems Huge to me! I would think unless your husband is making close to $200,000 a year I would not consider it. What about all the other expenses you have and things that just come up. Will you be able to take vacations and are you free and clear of all other debt. My husband makes about $100,000 a year and we have a 15 year mortgage with 10 years left to go that runs about 1,400 a month, no other debt as in no car payments or cc debt just house. Children are in private Christian school and we take 2 vacations a year. We do save some money and do 401K and college funds but no way could we come anywhere close to paying that mortgage.

 

[ICF]

We are moving to Catonsville were are you guys located? It is in the Oak Forest area if you are familar. It is a five bedroom 600,000 house. Does that still sound like a high payment for a house around that price. My husband feels like rates and housing prices will go up and we won't be able to get the same kind of house for the price we can get it for now.

The payment amount for a $600K house would only change based on the rate of the mortgage so it doesn't seem "high" for a $600K house. It's just a matter of how much house you can afford based on your income and other expenses.

 

[punkin]

We are moving to Catonsville were are you guys located? It is in the Oak Forest area if you are familar. It is a five bedroom 600,000 house. Does that still sound like a high payment for a house around that price. My husband feels like rates and housing prices will go up and we won't be able to get the same kind of house for the price we can get it for now.

The payment is fine for the price of the house. I'm just surprised at the price of the house. Real estate around here has been slowing down A LOT lately. I would not be in any rush to buy. I am not near Baltimore. I am in Montgomery county, closer to DC (Potomac to be exact). The prices here are generally higher, but I live in an older (1964) 4 bedroom split level with less than .25 acres. I pay for proximity to DC (which you obviously don't need) and a fabulous school district. My house is nothing to write home about, but the location is great.

 

[MissMichelle]

I was just doing a search and it seems there are many houses in that area (Catonsville) that are much less...I read that you are going from a townhome to a 5 bedroom...I would be worried about overextending when it isn't necessary. Check the listings on ziprealty . com and you can see what other homes in the immediate area are selling for and much more info. Such as I just found (and I know nothing of the area so forgive me) a 4 bedroom 2.5 bath on over 23,400 sq ft lot for $395,000. Just an example.

 

[JandJ]

That seems very high to me but a $600k house seems high to me. We got our mortgage based on one of our salaries. So, we could have afforded a house twice as much as what we have if we'd used our total income, but we got one that we could carry on just one of our incomes. We have zero debt except for our mortgage and good thing we were careful with the mortgage as we have each suffered a lay off in the last two years (both in better paying jobs now thank goodness). I guess that would be my biggest worry - if you have enough savings to cover that mortgage and the bills for a few months should the unthinkable happen.

 

[Caitsmama]

Wow!!! I would be out on the streets if i had to pay that!!! Then again, i would never be looking at a 600k house either.. So, i guess if you can afford a 600k house, you can afford a 3500. payment.. It's all relative i guess, right??

 

[cobbler]

Holy crap that is high!! Of course it really depends on where you live. We don't even take home that much every month.

 

[IDoDis]

I would not be comfortable with the idea of "growing into a mortgage." That's how a lot of forclosures happen. I don't know your DH's salary and your outgoing expenses each month either, so it would be hard to say.

From your photo, your kiddos are young. Kids get way more expensive when they get older. Their clothes cost WAY more, it costs more to take them out to eat, they want all of the expensive gadgets out there, you could be looking at 3 sets of braces at 5K-6K each (DS is 8 years old and just got phase 1 of his braces today -- so I am not talking about 10 years down the road). Then there's college and retirement to save for.

Several years ago I thought we'd be sitting pretty with the low cost of our house. Ha ha! Little did I know how much kids cost. DD's figure skating costs $600 a month alone. Even though DH and I are making 40% more now than we did when we bought the house 8 years ago, we have more $$ going out than we did 8 years ago. For example, who would have known we'd be paying triple the amount for gas?

 

[Kay1]

Well, we live in an expensive area and pay nowhere close to that. No one knows what interest rates will do or where house prices will go. But there's a lot of inventory out there which lowers value and a lot of mortgages are due to reset over the next year which may increase inventory even more. Bonds are getting creamed today which will drive up interest rates and that will make expensive houses less affordable.

It's complicated but I think you should listen to your gut and say no to this deal. You could get seriously hurt.

 

[ducklite]

My mortgage payment (PITI) is about the same amount as the OP's proposed payment. 30% of the monthly payment is due to the outrageous property taxes in this area. We could pay our bills on DH's income--barely. But we've got enough savings to pay off the house and have money left over if we needed to, so that allows me to breathe.

As far as how to make it work, IMHO if you don't have the answer to that question, you shouldn't be buying the house. It sounds like you're squeezing yourself too tight. As far as an ARM, who knows where rates will be in five years, but you can pretty well guess it's going to make at least one upward adjustment the first time it can. There are definitely times that ARM's can work to your benefit, but I'm not sure that this is one of those times.

Will either of you be seeing significant raises in the next couple of years? For example is one of you in school or in line for a pretty major promotion? If not I truly think I'd look at houses that would be a bit more affordable for you, especially if you see any upcoming life changes such as an addition to your family.

Anne

 

[punkin]

As far as an ARM, who knows where rates will be in five years, but you can pretty well guess it's going to make at least one upward adjustment the first time it can. There are definitely times that ARM's can work to your benefit, but I'm not sure that this is one of those times.

OP is looking at a 30 year fixed. I'm the one with the ARM (with approximately the same mortgage payment). If you can guess (even semi-accurately) where interest rates will be in 4 years (when mine adjusts) you can get a very lucrative job on Wall Street. I know, I have no idea where they will be in 4 years. I don't even know if I'll still be in my house in 4 years.

 

[m&m's mom]

That seems very high to me and DH and I make into 6 figures.
That also seems like a low payment for that price. How much are you putting down?
Hidden costs are increase in insurance, taxes, and especially heating and cooling costs, and think about decorating the new house. There is a large expense when going from a townhouse to a home w/ a yard etc.
I am with the opinion to go w/ your gut.

 

[lovemygoofy]

Are you and your husband working to pay for this house? If it ever need be, could one salary pay for all your household needs including the mortgage? Does the mortgage payment include the property taxes and house insurance? Are you planning to be in that house for a while? Have you looked at the schools to plan ahead for your children? What about your utilities? Are they going to increase quite a bit from the town house you are in now? Do you have enough savings to fall back on should an emergency happen in your family?

To me it sounds like you are stressing about more than just the mortgage because you know you have other things going on. I could be reading more into but I would look at everything financially to make sure I was ready for such a large leap.

 

[punkin]

Are you and your husband working to pay for this house? If it ever need be, could one salary pay for all your household needs including the mortgage? Does the mortgage payment include the property taxes and house insurance? Are you planning to be in that house for a while? Have you looked at the schools to plan ahead for your children? What about your utilities? Are they going to increase quite a bit from the town house you are in now? Do you have enough savings to fall back on should an emergency happen in your family?

To me it sounds like you are stressing about more than just the mortgage because you know you have other things going on. I could be reading more into but I would look at everything financially to make sure I was ready for such a large leap.

I would like to comment on the schools. If Catonsville is in Baltimore County (which I think it is) the schools are...pretty bad (not as bad a Baltimore City, but that is really bottom of the heap)