Hi Money Minder,
I’m a first-time homebuyer (38) trying to figure out my budget for a $400k home in Oregon. My partner and I are moving from Colorado.
Here’s where we’re at financially: our joint gross income is $175k, we don’t have kids and aren’t planning on any. We have $30k left in student loans, but they’ll be covered by PSLF in 3 years. Currently, we have $95k in cash savings and are trying to figure out how much more we need before we can comfortably buy a $400k home.
Our goal is to have $125k in cash savings in a HYSA, broken down like this:
- $80,000 for a down payment (20%)
- $10,000 for closing costs/prepaid expenses
- $20,000 for cash reserves/emergency fund
- $10,000 for furnishings
- $5,000 for moving expenses (we don’t have a lot of large items to move, currently in a small 1 BDRM)
Do these numbers seem reasonable to you? Am I missing anything or is there something I’m over- or underestimating?
Monthly expenses are estimated at $2300 for PITI, and I estimate about $3k per month including internet, utilities, etc, not including food and entertainment. We’re trying to avoid an HOA if possible, but we understand how that might affect our budget (likely need a larger down payment to offset the cost).
Just to add, our retirement savings are in good shape. I contribute approximately $30k annually to my 403b, we max out 2x ROTH IRAs, and I’m fully vested in my organization’s pension plan. Our retirement savings are over double our joint income if that helps.
Thanks for any advice or guidance!
Best,
Homebuying Newbie
Response from THE MONEY MINDER:
Hello There,
Congratulations on your decision to become a first-time homebuyer! It sounds like you have a solid plan in place for purchasing a 400k home in Oregon. Your current financial situation seems well-organized with a joint gross income of 175k, minimal debt, and robust retirement savings.
Based on your goals for saving 125k in a High-Yield Savings Account (HYSA), your breakdown looks reasonable. Setting aside 80,000 for a down payment, 10,000 for closing costs/prepaid expenses, 20,000 for cash reserves/emergency fund, 10,000 for furnishings, and 5,000 for moving expenses is a prudent approach.
Regarding monthly expenses, estimating 3k/month for PITI, internet, utilities, etc., excluding food and entertainment, is a practical estimate. If possible, avoiding HOA fees can optimize your budget.
Given your robust retirement savings and the detail you’ve provided, it seems you have a clear understanding of your financial goals and responsibilities. It might be beneficial to consult with a financial advisor to ensure you’re on track and consider any additional factors unique to your situation.
All the best from THE MONEY MINDER.
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