I hope all is well. I have posted a number of times in the past about our financial situation, but would be sincerely appreciate of of any feedback or guidance regarding our first home purchase.
My wife and I have two young kids and live in an extremely high cost of living area. Our combined income is about $460K, which does not include annual bonuses. There is a reasonable likelihood it will not go down at all and a decent likelihood it will go up over time as we are both relatively youngish for our career.
Additionally, we have just over 2.9Mish in savings, of which only about $600K is in retirement accounts. The bulk (80%) is invested in equities.
We pay NY state income taxes and our annual expenses outside of real estate will be about 120Kish (aggressive estimate and likely closer to $100K) for next few years and go down to 85Kish (more like $70akish) annually outside of housing once the kids are out of daycare. However, I imagine other expenses will inevitably come up.
Any feedback would be great in terms of how much we can allocate to housing. We are thinking of spending around $2M-2.3M with just 20Kish of annual property taxes.
I just don't want to stretch too much as $2M seems like a lot relative to just sub $500K of gross income. However, having nearly $3M in savings gives me some peace of mind. Any feedback would be greatly appreciated! 🙏
At first, you should count approximate charges in the coming years. As I understand, you have small children? Kindergarten and school consume A LOT (sometimes enough to refuse a property)
I'm not an expert but look for living examples of how to count expenses at https://fitmymoney.com/how-to-buy-a-home/. It helped me to define what rates you can pay.