So, my wife and I are at a crossroads. She’s a successful law associate, and I’m wrapping up my medical residency in a very high cost of living city where our families are based. She’s the kind of person who likes to plant herself firmly in one spot and stay put, so the idea of starting small and trading up to a bigger house as our family grows doesn’t sit well with her. Our current rental, which is around 850-900 square feet, is costing us a hefty $3500 a month, and frankly, I’m over it.
We’ve been eyeing some larger houses in the 2800-3000 square foot range that can accommodate our future brood of 2-3 kids. The catch? These dream homes are in an area that ticks all the boxes for us – walkable to downtown, with charming architecture, and top-notch schools. But when I crunch the numbers, I break out in a cold sweat. My current income is a modest $88k, but it’s set to skyrocket to $400-500k in a couple of years. Still, I’m not a fan of banking on future earnings to make big financial decisions.
Right now, our combined gross income is $380k. We’ve got some decent savings under our belt – $580k earmarked for a house, $600k in retirement funds, and a $30k emergency stash. On the flip side, we’re carrying a hefty $420k in medical school loans, which we’re planning to tackle through the Public Service Loan Forgiveness program.
The house my wife has her heart set on rings in at a cool $1.8 million. After scraping together a $700k down payment, we’d be left with a $1.1 million mortgage and a monthly payment of around $8k. That’s a whopping 38% of our current post-tax income. Her argument, and it’s a strong one, is that delaying this move could mean even steeper housing prices down the line, not to mention missing out on the perfect neighborhood where homes rarely hit the market.
So here we are, weighing the pros and cons of taking the plunge into our dream home despite the eye-watering costs. It’s a lot to wrap our heads around, but hey, isn’t that what adulting is all about?