How Much House?

[Susie]

Rather than just picking a number, I'd probably look at what aspect of your house you are outgrowing, and figure out what it would cost to fix the problem?

e.g., our last house had 1.5 bathroom, and that was the biggest pain point.  1/2 bath on the first floor, 1 full bath upstairs for all 4 bedrooms to share.  So we looked at what it would cost to do a primary suite addition (in 2020-21 that was $$$$$ and not worth it), and what it would cost to move to a house that solved that problem (and others).  Then we could more concretely answer for ourselves whether the impact on our lifestyle was worth it.  That was a much easier discussion and decision than an abstract "how much are we comfortable spending?"

We ended up moving, and it was a good decision.  We got extraordinarily lucky with interest rates though, and the housing inventory challenge is behind us, which makes it easier to feel that way.

[ny96]

Aug 3, 2023 12:08:11 GMT -5 Susie said:

Rather than just picking a number, I'd probably look at what aspect of your house you are outgrowing, and figure out what it would cost to fix the problem?

e.g., our last house had 1.5 bathroom, and that was the biggest pain point.  1/2 bath on the first floor, 1 full bath upstairs for all 4 bedrooms to share.  So we looked at what it would cost to do a primary suite addition (in 2020-21 that was $$$$$ and not worth it), and what it would cost to move to a house that solved that problem (and others).  Then we could more concretely answer for ourselves whether the impact on our lifestyle was worth it.  That was a much easier discussion and decision than an abstract "how much are we comfortable spending?"

We ended up moving, and it was a good decision.  We got extraordinarily lucky with interest rates though, and the housing inventory challenge is behind us, which makes it easier to feel that way.

We spent several years thinking of remodeling our current house and went as far as writing up plans and refinancing our mortgage to take money out. We were really excited about it, but then estimates started coming back and we learned that it would be about 900k to remodel (we were thinking 500k to 600k) so we dropped the idea.

[ny96]

Aug 3, 2023 12:08:11 GMT -5 Susie said:

Rather than just picking a number, I'd probably look at what aspect of your house you are outgrowing, and figure out what it would cost to fix the problem?

e.g., our last house had 1.5 bathroom, and that was the biggest pain point.  1/2 bath on the first floor, 1 full bath upstairs for all 4 bedrooms to share.  So we looked at what it would cost to do a primary suite addition (in 2020-21 that was $$$$$ and not worth it), and what it would cost to move to a house that solved that problem (and others).  Then we could more concretely answer for ourselves whether the impact on our lifestyle was worth it.  That was a much easier discussion and decision than an abstract "how much are we comfortable spending?"

We ended up moving, and it was a good decision.  We got extraordinarily lucky with interest rates though, and the housing inventory challenge is behind us, which makes it easier to feel that way.

The house in the other thread has exactly what we are looking for which is at least 3 bedrooms, an ADU or extra space for an office, a yard, and a pool if we’re lucky. H thinks we could afford that house, I’m not quite sure.

[k3am]

We live in a VHCOL. We knew for our old house, that renovating would not solve our problems. (Tiny house, tiny lot, didn't love the neighborhood, etc).

I keep a pretty detailed financial/budgeting spreadsheet, and when we were deciding to move, created a new Capital One account and we spent a few months making the additional house payments into that account - so I paid the delta into a another account and pretended we were making the revised all in PITI payment to see how it felt living off that. It honestly took my 6-7 months before I felt comfortable with the idea.

It was more than all the financial guidance say you should spend as a % of take home pay, but it was an easy experiment to determine whether that percentage would work for us and we could continue our current lifestyle, fund retirement/savings goals, etc. Our current mortgage is about the size of yours, we have a 40% LTV on the conservative estimate of our house value, but roughly 50% of our take home pay gets dumped into PITI.

[Beagle]

The biggest problem in our last house was the size and having 1.5 bathrooms. It also didn't have a garage, which was important to H. We looked into additions, but there were some things that just weren't possible (garage).

I was only going to move if we found something that had everything on our list, and we did. We weren't aggressively looking, but our Realtor is our friend and sent us the listing.

We were really lucky that we sold our first house for a large profit and secured a private lender, so the interest rate was lower (relatively speaking). That being said, moving is the worst and I'm never doing it again, and if I do I'm just packing a suitcase and leaving everything else behind.