My wife and I are in a bit of a pickle. We’d like to buy a 3bed condo in lakeview/Lincoln park Chicago, but the places we’re looking at are ~700k with $350-550 HOAs per month. We’re in a good financial position, as our gross base take home is ~230k per year, last year with bonuses total gross was ~270k. We have ~200k in retirement accounts and ~150k in cash/liquid assets. Our net base take home per month is ~12k post retirement deductions. With a 7-10% (50k-70k) down payment and an interest rate of around 6%, mortgage/interest would be 4K per month and total monthly payment after property taxes, hoa, PMI and everything would be 5500-5800. We don’t want to empty our liquid assets/stocks or put ourselves at risk with the mortgage which is why we’re thinking of doing a lower down payment.
We currently have zero debt, no cars (and don’t plan to get any) and not planning on having children. We’re hoping to stay in this condo for at least 10 years ideally or potentially even longer, as my wife and I can’t stand suburban living. The only way I can see us upgrading in the city in the future would be gaining enough equity/income to get a SFH. We do expect continued income growth over time so the painful payment may be more bearable in the future.
With that being said, we’re wondering if it would be crazy to spend ~50% of our current take home on a home given our situation? We wouldn’t be comfortable emptying our liquid assets/stocks or putting ourselves at risk with the mortgage. We’d like to stay in the city long term and this could be a great opportunity to do so, but we want to make sure it’s a financially sound decision. Is this a somewhat reasonable decision?