Post
Personal Finance
7mo
Reasonable % of TC going towards mortgage
Greetings!
I’m in the process of looking for our first home, in the Bay Area.
Planning on putting a 500k down payment and looking at my options for the price I’m willing to go with.
For under 1M the options in the city are either old flats or newly built condos with crazy HOA.
I’m wondering if I should go the extra mile and push closer towards 2M to get a house?😅😅
The 2M option is looking at a 12k/mo mortgage, which is almost all of my take home base salary (around 15k) and although I get significant RSUs I don’t feel secure about the more variable part of compensation. Like, I can control the bonus part by delivering good enough work, but the RSU part I can’t really control.
How do you plan around this?
What happens with mortgage if you lose your job, or you need a career break or something?
I feel good working hard today but I don’t think I’ll do the same for 30 years 😀
TC ~ 500k, HHTC ~ 600k
Grew up poor so totally inexperienced in housing personal finance.
Comments
Popularity
an assistant manager
7mo
I wouldn’t go more than 25-50% or you’ll be stressing due to being house poor and unable to covered other costs as they come up (broken appliances, car issues) or even just enjoying life.
Would also make sure you have 1-2 years worth of mortgage in savings just in case the layoff gloom hits ya
soanpari
author
7mo
works at
[an assistant manager](username) Thanks!
Would you advise 25-50% of net base pay or of total?
Definitely factoring the layoff risk
Although I like to think that I’d get back on my feet easily, you never know 🤞
I’m not a big spender in so am happy with a relatively frugal lifestyle. Increased spending will be inevitable when we have kids though. Planning on budgeting around 40k/yea per kid (I don’t like thinking $ when planning having kids but feels like I have to) so that will eat up about 150k of TC when time comes.
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a data analyst
7mo
bhai jis din mere pass itne paise hoge tab sochuga😂🥹
brightstrawberry
7mo
works at
Yes this could definitely happen. Also I or my partner could want to change career or try new risky things.
What did your friends end up doing, did they sell the house?
sabkaabaap
7mo
student at
IIT Madras
[plentycheeku](username) When you make high tc , mostly in downturns, you risk high stress and many times trade health and time for money. Smart ones are ok to make lower tc , move horizontally or even plan for breaks and alternate careers after a stint of 2-3 years .
hrterminator
7mo
currently not working
Do you have a healthy emergency fund to cover unexpected expenses ?
greatking
7mo
A Team Lead
Plan for one or both of you losing high paying jobs. Plenty of my friend's TCs went from 450+ to <200 in last 2 years and they went from house poor to f poor and stressed. It may not happen to you but do include this in your math
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