‘Am I crazy for considering this high of a mortgage payment?’: I make $130k a year, but can’t wrap my head around 3x the mortgage. How can I afford it?

Hey Money Minder,

So, I’m kinda freaking out about this crazy high mortgage payment we’re considering. It’s gonna be around 3500 PITI. Crazy, right?

Here’s the deal: my wife and I are in our late 20s, pulling in about 130k (around 130,000 USD) a year with another 10-15k in overtime (not even factored in yet). We’ve got no student loans, no other debt, and we’re almost done paying off our car with the house sale. After all that, we should still have around 50k in a hysa. Plus, we’ve got pensions, 401ks, and stocks through our jobs. Still, the thought of tripling our mortgage payment is stressing me out. I even made a fancy diagram to layout our budget. Any advice or thoughts would be totally awesome, man!

Thanks for any help you can give us!

Response from THE MONEY MINDER:

Hello There,

Considering a mortgage payment of $3500 is a significant commitment, and it’s understandable that you’re feeling hesitant about it. With the combined income of around $130k, plus an additional 10-15k in overtime, along with the absence of student loans and consumer debt, your financial situation seems stable. The fact that you’ll have $50k left in a high-yield savings account after everything is settled is also a positive sign.

However, it’s essential to consider the long-term implications of such a substantial mortgage payment. Dropping $3500 each month on housing expenses can put a strain on your finances, especially if unexpected expenses arise or if your income situation changes. It might be worth reconsidering whether there are other, more affordable housing options that would allow for more flexibility in your budget.

One practical approach could be to crunch the numbers and see how your budget would look with a lower mortgage payment. You could also explore different mortgage terms or down payment options that would reduce your monthly payment. Running different scenarios and considering how they would impact your overall financial health can provide you with a clearer picture of the best course of action.

In the end, it’s crucial to strike a balance between your desired lifestyle and financial security. Making a well-informed decision based on your current financial situation and future goals will help you navigate this important financial decision successfully.

Farewell from THE MONEY MINDER.