Is this foolish?

[light]

We have found a house that we love! 2 acres backing up to 150acre preserve with trails, just gorgeous. Price is $550,000. We could put down $300,000. So mortgage would be $250,000. This comes to around $1350 a month for 30 yr loan. Bad part is taxes will be $1000 a month - wow! Is this too much to handle if we are bringing in $125,000/yr. No debt and retirement maxed. It wouldn't leave much for extra savings, but I think it would be worth it. Other family members think we can't afford it. Is this to risky an investment for us?

 

[Texas Proud]

If it fits your needs and you can afford it... and you want to spend that kind of money.. they yes, get it.

Not every decision is purely financial, some have emotion in them also..

 

[crazy connie]

My question is how secure is the income and do you have a good cash stash if something goes sour? While it sounds to be a desireable property you want to realize what the sale cycle time could be if you have to sell. What is your age, how long do you plan to stay? If you want it, can afford it now and in the future then go for it. The taxes are a consideration not only now but in the future.

 

[shiny]

Does the property seem like somewhere that you want to be FOREVER? That would make a big difference since you wouldn't have to worry about the ups and downs of the market.

Gosh, those taxes are high - over 2%!

 

[tryan]

$2350/month is only 23% of your gross income. Banks will do this all day long. Especially with a large deposit. You'll be better off than many/most.

Of course buying a home is a quality of life issue only you can answer.

 

[Texas Proud]

Does the property seem like somewhere that you want to be FOREVER? That would make a big difference since you wouldn't have to worry about the ups and downs of the market.

Gosh, those taxes are high - over 2%!

Mine is over 3%... but cheap housing..

 

[light]

Yeh, the taxes are outrageous in my opinion. We're in our mid 30's. We've had our same jobs for 10yrs, so I would hope they're secure, but I suppose you never know. All this talk of recession etc. makes us double guess ourselves. We have around $30,000 sitting in the bank, which we could use if something did go horribly wrong. But how long would that last if the economy crashed and we lost our jobs and couldn't sell the house, or is that doom and gloom ideology very unlikely. There is a lot of emotion involved. We feel like this is the house to grow old in. Thanks for the feed back.

 

[bssc]

If it is a desireable house for you, I would go for it. After all the taxes and interest are deductable. You must be in New York or there abouts, our taxes in AZ are .5%.

The ratios are good, as tryan noted. If you are worried, get a HELOC to get access to the $300,000 for crises.

 

[bbbamI]

Why do your family members think that you can not afford it? Have they given you reasons?

My other thought is whether or not children will be added to the family. Would there still be a dual income? Have you ever owned a house and acreage before?

I'm not trying to dampen your spirits, just some things to consider.

 

[spideyrdpd]

Sounds like an expensive house to own
Big houses are more expensive to heat, furnish etc
and land has landscaping costs.
As long as your aware and thats what you want.
Then go for it
Probaly be worth a fortune in 30 yrs

 

[laurence]

You are in much better shape than most people when buying a house. My income and age is about the same and my mortgage is a little more than that for a cracker box house on a postage stamp lot in the 'burbs of San Diego. If this is your dream house and you think you could live there forever there, jump on it! Especially if you are still maxing the IRA/401k. Early retirement is great, but you shouldn't deprive yourself to get there. Heck pushing out retirement a couple years to live your dreams vs. just "not working" shouldn't be a sin, even on this board!

 

[Sam]

Just a data point for consideration: 550/125 is 4.4

 

[Fireup2020]

2 acres, $550K...obviously not in NJ! Sounds like NJ taxes! If you guys love it, feel it, and can comfortably afford it - DO IT!

Best of luck to you!

What state are you in BTW?

 

[jazz4cash]

Definitely not foolish. As others have pointed out, its priced like a brgain and taxed like a luxury...so what gives? Unless it needs extensive work or something, it sounds terrific and you should go for it.

 

[light]

Thanks guys. What a overwhelming positive response. I'm totally surprised , I was expecting a more conservative, be careful, don't over extend yourselves sort of thing. I think it's a rare opportunity, that if we waited might not come around again. The house was built in 1995 and is a 2700 sf one story home. It was built by a builder for himself. The land has big beautiful trees and is pretty natural - not much needed landscaping wise. Mowing of coarse. We are going to go for it! We've can afford it and it is a life style choice. The kids, youngest starts Kindergarden in Aug, will love it. How much fun for them!! Thank you!

 

[saluki9]

Be sure to post some pictures

 

[laurence]

Thanks guys. What a overwhelming positive response. I'm totally surprised , I was expecting a more conservative, be careful, don't over extend yourselves sort of thing. I think it's a rare opportunity, that if we waited might not come around again. The house was built in 1995 and is a 2700 sf one story home. It was built by a builder for himself. The land has big beautiful trees and is pretty natural - not much needed landscaping wise. Mowing of coarse. We are going to go for it! We've can afford it and it is a life style choice. The kids, youngest starts Kindergarden in Aug, will love it. How much fun for them!! Thank you!

There is a reason you work and save. Congrats, post pictures like saluki said!

 

[shiny]

It does sound really lovely and tranquil! Congrats on making the decision, that is probably the hardest part.

 

[light]

Once the deal is done and we're in I'll definitly post pictures. We just walked one of the trails (3m) from the other side of the preserve . Have a fun week-end. Tomorrow's St. Patrick's Day.

 

[wstu32]

$1k per month taxes just doesnt do it for me. sorry, can give you my thumbs up!

 

[bright eyed]

Are the high house taxes offsetting another lower tax for your state? That is a consideration - and is usually the case.

Who's going to clean the 2700 sq feet? I had a big house, now I try to live in the smallest one possible because then you don't "fill it up" with crap and you have less to clean and heat/air cond if that applies.

But the trails etc. do sound great you can credit $30/month less in gym fees since you're getting that w/ the place!

Hope your kids like to mow and rake!

Congrats - hope to be in your position one day too!

 

[Caroline]

I'm looking at everything in terms of opportunity costs these days. Yes, I could have a big house, but then I couldn't travel as much as I'd like or to places like Africa, Nepal, etc. Yes, I could have a big house, but I'll have to work 5 more years than I would otherwise to pay for it. What if I get sick during that time and never enjoy a healthy, youthful period of retirement?

In addition to looking at what you gain -- what are you giving up?