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Rxpert83 t1_iydrqy6 wrote

It's not clear if your budget breakdown is your half of the finances or both. You should really be sharing both as it's not a question of if you can afford it, it's a question of can both of you afford it.

IE- Is the $1000 your total mortgage you're budgeting for or only your portion of it?

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nolesrule t1_iydrru6 wrote

What jumps out at me is you probably won't have enough for a house down payment unless you live in an area with inexpensive housing. You should be aiming for 20% plus closing costs.

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Concerned-23 t1_iydrzim wrote

My half. I edited the post. He has budgeted for the mortgage and has 10k saved for downpayment/closing. He also has 5k earmarked for the wedding. He is maxing out his IRA and 401k match.

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smdion t1_iydsb9l wrote

It seems 20% is falling out of fashion for first time home buyers. Even Ramsey is saying 5-10% is OK now.

Source:https://www.ramseysolutions.com/real-estate/how-much-money-do-i-need-to-buy-a-house

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alexm2816 t1_iydsc2w wrote

Are you sure this is an all inclusive budget? I see (even with the mortgage/$900 to savings/$500 to IRA) $4k in expenses vs almost $8k in income.

Any consideration here isn't going to be effective if you don't have all of your expenses in here. Clothing, shopping, entertainment, vacations, gifts, irregular expenses like auto registration/tires, new phones, the occasional event yadda yadda. It all adds up.

Is $1000 a feasible mortgage amount? At prevailing property tax / insurance rates/ mortgage rates that will cover about a $125k mortgage. Not sure if that will buy much where you are but I know here that would not be feasible.

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bulldg4life t1_iydscsx wrote

If I did the math right, you're saving like 11-12% of your salary for retirement ($6000 + 3% to 403b). Does the employer contribute to the pension plan whether you contribute or not? You also don't indicate what your future husband is doing. Are you guys saving enough for retirement?

Also, the second math problem looks like you'll have 20k or so for a house downpayment. Is this downpayment, closing costs, moving, etc? If so, how big of a house do you expect to buy?

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BoxingRaptor t1_iydsf3u wrote

Then it would be tough to give a good answer. With the numbers you gave, you'd be stretching yourself very thin. What happens if you have a several thousand dollar emergency repair on the new house?

Also, why do you need a new car? If I'm reading this right, you're just about to pay off the one you currently have. Why are you jumping into a new monthly car payment right away?

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taraobil t1_iydslco wrote

Why get a new car and keep paying monthly when the current one is about to be paid? I wouldn’t get the new car if the current one is working fine. That 350 extra saved from not getting a new car could be saved.

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nolesrule t1_iydsuxh wrote

Sure, if you want to pay even higher interest (PMI) in an already rising interest rate environment, be my guest.

We bought our first house with 5% down, an 80% conventional and 15% second mortgage when rates were mid 6%+. I don't recommend it.

I also tend to tell people to run away from Dave Ramsey except for his basic get out of debt advice.

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Concerned-23 t1_iydsxat wrote

Employer contributes 15% to pension plan and I don’t have to contribute at all. He maxes out his IRA and 401k to employer match (4%). I plan to bump up my 403b contributions to 5% in 2024/2025

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Concerned-23 t1_iydt0i1 wrote

I mean with 40k collectively in emergency fund/home repair savings can’t that cover most major home repairs?

My current car is 11 years old and needs 3k in repairs. It’s on its second engine and it’s very unreliable

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smdion t1_iydt8un wrote

Yea agreed. Point is even the more conservative "always do 20%" are backing down to 5-10%. 20% is stopping a lot of people from being able to own a house.

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alexm2816 t1_iydtcf6 wrote

Understood. Thanks for clarifying. That also makes the mortgage math ~2x my reference.

Check in on your planned budgets for medical expenses, furnishings, all the items above and then consider if you need to broaden your budget buckets in other categories.

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Scr0bD0b t1_iydtdk1 wrote

Edited for answered questions already.

Are you aiming for 20% down on the house? Have you budgeted home repairs, moving, initial purchases?

Be careful with the timing when it comes to applying for a mortgage. You don't want a brand new debt of a vehicle with no payment history showing up just before. There are minor credit drops from inquiries etc.

From a paperwork standpoint, it's probably easier to get married first, lol. Doing name change forms always seems like a hassle.

If you've budgeted everything out, then should be ok, but just make sure you've set a safety net of unplanned expenses and have an adequate emergency fund to cover everything. (Like, what happens if one of you loses your job for several months.)

Children are expensive when it comes to childcare. Expect daycare to be around the cost of a mortgage if you don't have relatives stepping in.

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Concerned-23 t1_iydtjpf wrote

Hyundai Elantra. It was the worst decision ever I will never buy a Hyundai again. Needs new struts and something else that I can’t remember. Also has an electrical problem that needs fixed. Not to mention the engine could fail again as the engines are faulty but no official recall

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Ndi_Omuntu t1_iydtxj9 wrote

I think people should do the math themselves to estimate their PMI rather than just consider it a non-starter. Mine shook out to an additional $30 a month-hardly the back breaking expense I was expecting given how people talk about it. Yeah it's money just going away, but I was able to get a good first time home buyer program my state has and keep my cash to stay liquid. The cost was worth it for me.

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Concerned-23 t1_iydtyv6 wrote

5% down on the house. Moving will be done via family as it won’t be a far distance, we have all the home essentials already. Car will be purchased after we close (unless my current one dies) so our DTI will be lower. Our credit scores are both 780+.

Yes all expenses (except car) is split 50/50 so they could be effectively doubled if you add in his salary.

Not changing my last name. I think it’s too old fashioned and goes against what I believe in

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nolesrule t1_iydu3wn wrote

I was a homeowner back during the GFC with that house. We were lucky when we moved out that we had enough equity to be able to sell it below what we paid for it when we moved for work.

Smaller down payments are one of the reasons home prices have become unaffordable. It's no longer about saving up to have enough, but the instant gratification of getting the house and worrying about the larger payments that result from it later. That's part of what went wrong in the GFC. When you make a smaller down payment you are taking on more risk, and you have to pay the lender for that risk.

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smdion t1_iyduhgg wrote

Agreed again, partially. You need to make sure your monthly mortgage is still within reality. You can have a smaller down-payment and still a healthy ratio of monthly outflow for the house.

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juanshaftpatel t1_iydulj9 wrote

high chance of failure... guaranteed elevated stress levels with those numbers

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Scr0bD0b t1_iydur3j wrote

Marriage is old fashioned but still doing that, lol. I know this isn't relationship advice sub, but make sure he's ok with that and he doesn't take it the wrong way, like you not liking his name or something. I have a family member that did this. I never understood it, but each couple is certainly allowed to do what they want.

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nolesrule t1_iyduywe wrote

What the bank is willing to lend you and what the reality is of what you can afford given all of your other priorities are 2 very different things and a lot of people lose sight of that.

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Concerned-23 t1_iydv1rc wrote

Fiancé wanted to take my last name lol. We are 100% on the same page with me keeping my maiden name. It helps me stay connected to my heritage and I have a doctoral degree and that’s the last name I got the doctorate with so it’s sentimental in that name. The cherry on top is for my job changing my name is a pain in the ass.

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BoxingRaptor t1_iydvp6q wrote

Struts are something you'll have to replace periodically on every car you'll ever own. That's called a "wear" item. The electrical problem is probably worth just fixing. And I wouldn't rush into a new car for tens of thousands of dollars just because the engine MIGHT fail again.

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[deleted] OP t1_iydvudu wrote

Never ending car payments…. Not a good financial move.

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Concerned-23 t1_iydw5xz wrote

When it does die again I’ll be stuck with no transportation. My car has left me stranded on multiple accounts. I’ve put nearly 10k of work into it and I’ve had it less than 5 years. Every time I take it in (6 months or less) I’m given another 2-3k in repairs. I’ve had mechanics and tow truck drivers tell me it’s a money pit

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Kaethy77 t1_iydx0pq wrote

I didnt read over the budget numbers. With that said, you're needing a reliable car, check. You're getting married, congrats, check. Why do you have to buy a house now? I say postpone that a year or two.

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Concerned-23 t1_iydxkfy wrote

Thanks for the support with the car, I feel I’m being chewed out for that. My current car was a bad rushed decision when my old one died and I was a broke soon to be grad student. I’m trying to avoid a rushed car decision with this one on the fritz which is why I’m looking to get a new one before the current one officially dies.

As for the house, we have a large dog which makes renting very difficult. Most places charge $100+ a month extra in rent for our dog. Our current rental is a small 2 bedroom and we are bursting at the seams. Not only are we bursting at the seams but our landlords don’t fix anything and we just come home and hate where we live due to it. We’re ready to own something that’s ours that we can repair our own and make it ours. We’re spending more and more time and money out of the house because our current rental just doesn’t work for us.

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MikeWPhilly t1_iydy0hz wrote

So I’ll say this. When I got married the fiancée and I combined income of $260k (approx she was doing OT at that time) bought a $448k home and kept my previous property for investment. We settled on that home the same way week we had to pay the wedding - so I’ll tell you first hand it will be stressful as hell. The only reason I did it is because the home purchase was an incredibly good deal and by time we settled it appraised $45k over what we paid. Given your home purchase is less I’d say it’s easily doable in theory BUT there are definitely some odds and ends to address.

  1. You haven’t mentioned how expensive your wedding is. weddings have huge ranges as expensive as $100k. Even with parents helping with some items we ended up paying $32.5k out of pocket. How much is the wedding going to cost you?
  2. The car purchase. If you aren’t buying the car until next year and paying to replace the engine. Why not buy the new car AFTER the home purchase & wedding? If you are fixing it I don’t get the rush and it will make a massive difference on the stress level.
  3. also even in the Midwest $250k won’t go far so just keep in mind you might need roof or hvac repair so ou could be out 30-40k.

Otherwise i see no issue with it. The big thing is you have to be super disciplined in saving up to it. I’d also really push the car off if you are fixing it 6 months more makes no difference.

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Concerned-23 t1_iydye4a wrote

  1. Wedding is going to be 25k or less. It’s a smaller wedding.

  2. Car has lots of problems I am not fixing as I’m done putting money in it constantly. New car will be purchased after we have keys to the home to not impact my DTI.

  3. Where we live we can get a 3-4 bedroom 1.5-2 bedroom home for 250k or less.

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Mekhitar t1_iydyjk7 wrote

My one comment is: rather than thinking $12000 for home down payment, think $12000 for closing costs, which isn't the same thing. When I bought in 2020, we put $13000 for the down payment (5%) and an extra ~ $4500 in closing costs on top of that.

Our 100-person wedding in 2017 cost ~12,000. You can do it for much less, of course, but this was a 'the venue handles everything' middle of the road wedding.

As for the car: depends on the car - take a good look at the loan terms (length & monthly cost). I just put $20,000 down on a car and have a hard time imagining putting down less!

At the time of these purchases, husband + my combined income was ~ $140,000.

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Concerned-23 t1_iydyx1s wrote

We have 12k down and 10k for closing for the home. So 22k total. 10k might be an overshot for closing.

I’m looking at cars costing 28k or less after taxes and fees. Not looking to buy myself a Tesla or anything. Just a reliable vehicle.

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MikeWPhilly t1_iydz34w wrote

$25k would be good if so. Just be ready for surprise expenses at the end. wife and I added a videographer that was expensive but now a days if you asked either one of us we could have skipped photos and just done that ( we watch it every year ).

Smart move on the car. The other benefit then is you should hve some down payment money from the wedding for car so it’s not a bad choice. Have you figured out how expensive the car is you want to buy? That’s the other big piece. Good news is market should be adjusted next year (used cars dropping big time right now).

And the house the comment was more about must have repairs immediately. I invest in real estate and been around it all my life. $250k I don’t doubt you can get 3-4 bedrooms my comment was more the fact that you are likely looking at 1950-1980’s time period for it being built (unless you are looking at town homes?) and so you might have some bigger repairs needed when buying like a roof, new hvac, etc… It’s just something to keep in mind you might have some larger bills on top of the closing costs when buying.

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Concerned-23 t1_iydzsgs wrote

I’m glad you liked your video. We personally are not a huge fan of the videos and like photos more. Our prospective venue is under 10k for all the food/alcohol/venue/reception. So we’re right on budget for that.

Car is going to be 28k or less. Which is how I got the monthly payment with the 5k down.

Most homes being sold where we live have newly repaired HVAC. I browse listings daily and ~70% of the homes have had their HVAC replaced in the past 3-4 years.

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Lolgb2000 t1_iye07py wrote

Lol don’t ask for advice If you are going to disagree with the critiques. 140k combined salary is not enough for all of these things. If one thing goes wrong you’re SOL.

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[deleted] OP t1_iye1du4 wrote

Lol. Poor excuse for a combination of poor financial planning, poor decision making and poor spending habits.

Buy an affordable car and maintain it. If your car becomes unreliable every few years and you use that to justify buying another (and getting another car loan), news flash, it’s not the car that’s the problem.

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Concerned-23 t1_iye1vzg wrote

Last I checked having 30k saved when I graduated from college 6 months ago isn’t poor spending habits.

Current car was bought in a rush at age 20. It was a bad decision but I was in school and needed something to get me through my doctorate. Current car got me through my doctorate but it’s time for a replacement

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