Originally Posted by
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I'm old enough that I saw 9/11, age 65, financial crisis, post recession oil boom, and covid. If there is anything history teaches us, it's that it will repeat itself.
My personal opinion is anything above $3k monthly PITI and >15 years is asinine. You're locking yourself into a careers worth of high payments. Note: this assumes you're the breadwinner, and your wife isn't an ER doc.
Just IMO but it's far better to life frugally in this career and, when the time comes, purchase what you want wish cash than it is to purchase on a monthly payment. That goes for anything - home, vacation condo, vehicles, boat, airplane, other toys, etc. Keep in mind, nicer things cost more to insure, maintain, and come with higher property taxes as well.
The happiest people I've known in this job owned everything they had outright without payment. I can promise you, your kids dgaf if you have a million dollar home in a wealthy zip code.
You lump a home which is an appreciating asset into the same bucket as toys and depreciating assets. Thats a big mistake. Home ownership at the upper end of what I could afford is what set me up for a great retirement. Real Estate be it the house you live in or investment property should be a part of your long term financial strategy. A mortgage leverages a lot of potential profit before you even consider the fact you have to pay to live somewhere be it rent or a monthly payment. All in I have not paid a dime to live in great houses the last 30 years. Appreciation has exceeded my payments. It set me up in retirement to be free of all house payments and own a nice vacation home to go with my primary residence. Equity also aided getting my kids through college during the bankruptcy.
When you look at a monthly payment look at the difference between the payment and renting. Keep in mind most payments go down over time via refinancing while rent only goes up. Now add in potential equity growth. 4% is about the average over time. That 4% in a house compounds like a savings account. On a 1 million dollar home your getting 40,000 a year to start compounding to higher amounts over time. There is no need to live in a shack. Put your family in a descent home.