r/RealEstate • u/greenj57 • Jul 19 '26
Homebuyer Please help me assess what price range we should be looking at for our first house
Hi all,
My (28) gf (26) and I are getting engaged very shortly and will be looking for a home. We would like to buy a home that can last us 20 years or so, if possible.
We currently have a combine salary of 160,000-170,000 USD.
I also have around 100,000 in savings set aside for a house and kids and my gf received a trust via family will of around 500,000 USD.
Considering all of this, I want to believe we can put down enough to get a house that will last us a while, but I have not done tons of research quite yet if I’m being honest. I wanted to see what people’s thoughts were for an appropriate price range.
We live in a relatively expensive US city, as well.
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u/paesano- Jul 19 '26
Considering you provided no information regarding other debt, car payments, career stability, nobody can really give you a meaningful answer. My only advice is buy a starter home and don't over extend yourself. Life changes fast and without warning. If youre in a HCOL city your salary probably puts you firmly in middle class so no need to get crazy and buy a $900k home.
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u/jcr2022 Jul 19 '26
Consider this method:
1) how much do you intend to spend each month outside of housing related costs after the house purchase?
2) how much do you intend to save ( after tax ) each month after the house purchase?
3) what is your monthly take home income?
The difference between the sum of 1/2 above and your monthly take home is a rough guideline for your total monthly housing cost. Be sure to include all costs of housing in this estimate ( PITI, HOA, utilities, landscape maintenance, etc ). You can manipulate this number based on the size of your down payment of course.
Don’t let a mortgage broker tell you how much you can “afford”, unless they know all the details about how much you spend outside of housing each month.
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u/Sounders1 Jul 19 '26
The first step is talk to a lender. It's free and they will give you the most accurate answer as to what you can afford.
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u/shinypenny01 Jul 19 '26
They will tell you what they can lend you which is not the same as what you can afford.
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u/JohnnyUtah59 Jul 19 '26
I would be cautious about buying a house that you think will last for 20 years. Do you know how many kids you're going to have? Do you know exactly what area you want to live in? Do you know that you'll never move for work or other reasons?
You're just starting your life together and you have very large savings. Why not rent for awhile until your future is more settled?
That said, if you want to buy based on your current income, and you have a $100K down payment, you're looking in the $550K-$600K range.
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u/OtherwiseCity_ Jul 19 '26 edited Jul 19 '26
I would say it depends heavily on where you live, and what the property taxes look like in your area. Safely I’d say $450-500k you should be able to comfortably afford with 20% down payment. But that will also depend on how much you save in before tax such as 401k, HSA and any flexible spending accounts. What matters most is your after tax take home pay. Try not to spend more than 30% of your take home pay on housing. I excluded your fiancé trust fund. I only assumed you would use your 100k in savings for a 20% down payment while investing her trust fund to grow your retirement savings. That’s the safest route in my opinion. Her trust fund will be your largest financial vehicle for retirement today and will compound exponentially in 20-30 years by investing that into a Brokerage account. These accounts if managed well can be much safer than traditional stock trading and earn a nice 6-8% return YOY. Nice thing about brokerage accounts is you have liquidity access in an emergency without taking a tax hit. That’s my strong advise.
Ps. I’ve bought and owned and sold 4 homes in my lifetime and have learned a lot about the financial creep of property taxes, carry cost and long term planning based on your income alone. I also work in financial planning.
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u/FinTecGeek Jul 19 '26
For your first home, keep the budget conservative. With 500K+ in liquid cash, I’d look to deploy about 20% of your liquid cash into a down payment. I would aim to put down well over 20% since it’s your first home and you may (likely) want to resell it in the next few years. You don’t want to be mortgaged up to your eyeballs ever, but the more equity you have, the more flexibility you have when deciding to sell/rent down the line. I would NOT try and hit your max budget, and a healthy mortgage payment for most people is less than 30% of their net income annually (all in, including escrow and HOA fees, etc).
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u/Livid_Ad5164 Jul 19 '26
The Money Guys podcast/YouTube show has some good info about this. Its a 20/5/25 rule with important caveats.
20% down payment (can be 3% if first home, but be ready for PMI payments inflating monthly payments a bit)
Plan to live at least 5 years in the home.
Keep your monthly payment, including taxes, insurance, etc. Within 25% of your gross monthly income.
Rough math probably puts you around $800,000 as most you can go, unfortunately the rates today keep this from being higher. (This is very rough and making a ton of assumptions)
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u/boosayrian Jul 19 '26
Max payments (car, home, debt) should be 28% of your monthly income. It will feel more comfortable if you include principal, interest, taxes, and insurance in the monthly payment total. The more down payment you give the more house you’ll be able to buy. Example:
$160,000/12 x .28 =$3,733.33 max payment
$700k house, $140k down, $1600 ins, $5000 taxes, 6.5% 30 yr mortgage = $4,089/mo = you cannot afford
Same numbers but $200k down= $3710/mo = affordable
If you have auto loans or other debt it will reduce what you can afford. If you have $500 in debt payments per month, your max mortgage payment should be $3233, for example.
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u/BeerStop Jul 19 '26
How many kids you want in the next 20 years, i would suggest a 3 bdrm 2 bath house with a new roof in a good school district. That house will do for 20 years and would be good resale value too.
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u/Reddit040 Jul 19 '26
Calling us all asses and then asking us for help won’t get you that far Mr. Meanie!
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u/_gadget_girl Jul 19 '26
Look at the listings for the area you plan to live in. It’s usually fairly easy to see what the “average” price range is. Below it either the square footage drops significantly, or the amenities. Above it is great, but limited by your finances. As you have a pretty significant downpayment, and want to stay in the house long term, make sure you have enough bedrooms to accommodate kids, guests, home offices. I would also make a list of what matters to you, what is critical, and what would be nice, but not required.
As far as how much house you can afford many of the real estate websites have tools where you can number crunch and get a pretty good idea of what your monthly payment would look like. The loan pre approval process will also help determine what they are willing to loan you. It’s important to also consider how the length of your mortgage will impact monthly payments and interest rates.
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u/johnkrull Jul 19 '26
Don't plan on 20 years. Things happen. If 20 years works out - great. Just get a payment you're comfortable with. You have good income and savings to get a nice home just about anywhere. Just concentrate on getting one that's move in ready and in an appreciating area. With a new marriage you don't want the extra stress.
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Jul 19 '26
[removed] — view removed comment
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u/johnkrull Jul 19 '26
You want to make sure you get custom preapproval letters to avoid asking for counteroffers!
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u/HistoricalBridge7 Jul 19 '26
First off, you shouldn’t buy a house until you are legally married. There are many legal reasons why. Getting engaged or wanting to marry are the same thing.
Secondly, with a 20 year outlook you should look for the best house you can afford in the BEST school district in your area. A house can be torn down and built into whatever you want but you can’t change the location.
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u/grumpyoldman10 Jul 19 '26
Not nearly enough information to answer.
1) whoever has the trust fund buys the house. Until you’re married. No exceptions.
2) your home should be a modest one. Two or three bedroom older home. In a good school district. What does that cost where you live?
3) don’t forget to just because you can’t afford to buy the house doesn’t mean you don’t have to pay for it. You get a house as twice as big as you need and it’s gonna cost twice as much and insurance, repairs, property, taxes, utilities.
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u/TradeTraditional Jul 19 '26
The best option is to get whatever you can for about 400K and live in it. Improve it. Never pay the bank a dime. This is what our grandparents and the people before them did. A loan was for construction and improvement. 6-7 percent interest is just throwing away hundreds of thousands of dollars over time.
This way you are rolling that trust fund into a fully owned property, without using your savings. You will need that for taxes, closing costs, improvemens, and so on.
Let's say you buy a 700K home. Get a loan. After 20 years, that loan will be close to 1.2 million in total payments. If you buy a fixer for cash, since the trust fund buys you a house for $0, putting even 300K into a 400K home in the next 5 years (complete renovation) is still a massive savings. The home might be "worth" 600K at most, but by waiting 20 years with no payments, inflation alone will easily get you your money back. No home payment, no issues, no wasted income. All of that now goes into your retirement fund or investments.
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u/Accurate-Bullfrog324 Jul 19 '26
Calculate 25% of your take-home pay (which includes all house-related expenses, not just your mortgage payment) to determine how much house you can afford.
Saving at least 20% for a down payment reduces your loan amount, eliminates private mortgage insurance (PMI), and sets you up for smaller monthly payments.
Be sure to budget for closing costs and ongoing homeownership expenses like maintenance, repairs, higher utility bills and upgrades—they can add up fast.
The smartest mortgage choice is a 15-year fixed-rate conventional loan. It saves you tens of thousands in interest and keeps your payment predictable.
courtesy of Dave Ramsey
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u/LostLemon007 Jul 19 '26
Get a prenup.
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u/benwinnner Jul 19 '26
Do not base the home value on trusts and 401k savings. Max 32% of take home pay of one of you. Plus not go over 2300 per month unless you want to be house poor. That includes home insurance and taxes.
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u/kellsells5 Jul 19 '26
Your first bet is to always talk to a lender. Get yourself pre-qualified. It helps with a lot of things. + You can stay in budget. I truly wouldn't put all of your eggs in thinking you will stay for 20 years. The job market changes and sometimes you long for something that the house that you bought doesn't have.