Is that health insurance through an employer? Or are you paying the full cost OOP yourself? My husband provides our family health insurance, as well as the bulk of our income. Losing his job means we have to provide insurance ourselves, the full cost. Which would be a significant expense that we don't currently have.

I think the point they are making is that the bonus was taxed - so they didn't receive $20k, but the after tax amount. However, HR doesn't care, they want the pre-tax amount, and you correct the taxes to show you didn't actually receive that income. Refunding the taxes paid on your behalf.

To give you an idea of monthly payments - we borrowed $165,000 at 3.75%. Taxes and insurance are rolled into our payment through escrow. We pay about $2600 in taxes and $600 in insurance each year. Our monthly payment is $1,239. That's more than half of your monthly take home. And that's just PAYMENT, that doesn't include any maintenance. Then you need to consider utilities - water/sewer, electricity, however you may need to heat the house (electricity, propane, gas, fuel oil, whatever). Internet. Cell phone. Car insurance, gas, groceries. I don't see how you can afford a $200k house on the day-to-day even with a $25k down payment.