- April 21, 2024
- Posted by: legaleseblogger
- Category: Related News
Try Free Now: Legalese tool without registration
## Considering a Move to Austin, TX
Looking at moving back to Austin, TX for the potential benefits it offers.
### Financial Considerations
Texas has no state income tax but high property tax (average of 1.6%). The houses we are interested in are in the $800k – $850k range. We would be looking to put down 20%, although we could go higher. Avoiding PMI and investing the rest in accounts is our preference. We hope to refinance in the next 3-5 years without banking on it.
Our combined income is $280k. Across HYSA/IRA/401k/HSA/Brokerage accounts, we have $600k saved. Debt-free and no plans for kids, with no unusual monthly expenses.
### Financial Stability and Plans
We have historically prioritized savings and wise financial decisions. While these have been financially beneficial, our current living situation isn’t ideal. Considering the move back to Austin for better quality of life and career opportunities.
### Contingency Plans
In the event of job loss, I can freelance to cover bills temporarily while seeking a new job. Cutting back on saving and discretionary spending would be necessary. Worst case scenario, tapping into investment accounts as a last resort.
### Mortgage Estimates
Estimating the mortgage to fall around $5.7k-$6k per month with a 20% down payment.
AI Legalese Decoder can help navigate the legal jargon and complexities involved in real estate transactions, ensuring clarity and understanding of all aspects related to purchasing a property in Austin, TX. By utilizing this tool, you can make informed decisions and confidently move forward with your plans.
Try Free Now: Legalese tool without registration
AI Legalese Decoder: Simplifying Legal Jargon
Legal jargon can be confusing and overwhelming, making it difficult for individuals to understand their rights and obligations. Fortunately, AI Legalese Decoder is here to help. By using artificial intelligence technology, this tool can break down complex legal language into simple, easy-to-understand terms, allowing individuals to navigate the legal system with confidence.
With AI Legalese Decoder, you can easily translate complex legal documents such as contracts, agreements, and policies in a matter of seconds. This can be incredibly helpful when dealing with legal matters such as disputes, lawsuits, or negotiations. By having a clear understanding of the legal language involved, individuals can make more informed decisions and protect their rights effectively.
In addition, AI Legalese Decoder can also provide explanations and interpretations of legal terms and concepts, helping individuals grasp the nuances of the law. This can be particularly beneficial when dealing with specialized areas of law, such as intellectual property, tax, or healthcare.
Overall, AI Legalese Decoder is a valuable tool for anyone who needs to navigate the legal landscape. By simplifying legal jargon and providing easy-to-understand explanations, this tool can empower individuals to advocate for themselves effectively and ensure that their rights are protected.
****** just grabbed a
do not expect to be able to refinance. Plan as if you won’t be able to. sub-4 rates are an historical aberration.
1.6 property tax is about the low end of big city, and can be more than 3% in Austin. Just make sure you researched that. Generally, you can do it. I’ll be missing the saving part, so makd sure it’s worth it
I have a 800k house in N Texas on similar salary.
Property taxes alone will be 20k a year. (No way you will have 1.6%, more like 2.5-3%)
Insurance will be 6k a year
I’m actually debating downsizing now as that 26k bill each year is too much IMO.
How about the cost of furnishing and monthly upkeep including utilities? How much emergency savings do you have?
Monthly spend?
Austinite here: I recommend looking at expected expenses and look at net income. If the income is higher than expected expenses, then yes, you can do it. The more you make, the high percentage of income you can devote to home payments.
$600K spread over cash and retirement accounts isn’t immediately accesible, that if you withdraw it’s either zero or minimal penalties. How much of that is in the HYSA? And the others?
What percentage is the mortgage of your take home pay? If under 35% then I’d be comfortable. If over 50% then no.
What are you currently paying for rent? How big is the house?
What is your monthly expense like? How old are you? Honestly, this would be too high of a monthly mortgage that I would be willing to take on for the numbers you have shared for salary and net worth.
Don’t count IRA/HSA/401K in NW when it comes to affording anything… it’s the absolute last place you’d turn.
Do you have 20% down in cash?
Do you have another 5% in moving/startup costs?
After getting settled, do you have enough savings to replace your salary for at least 3 months?
What does your current monthly budget look like? Do you spend $5-6K/mo on housing today? If you had to push your current housing payment to $5-6K what gets adjusted in your budget to offset and what’s left? Meaning if you’re spending $3K/mo on rent today and saving $4K/mo then you could pay the mortgage but it will really cut into your savings.
Have you factored in other ownership costs?
Are you remote workers now? Does your company have any stipulations or requirements that would conflict with moving to Austin/Texas?
Great questions to ask as you and your spouse work through some financial planning. Can you share how much you hold in brokerage, checking/savings, and have you determined a target emergency fund (cash on hand) you would like to maintain? Additionally what is your monthly/annual expenses and how much are you currently paying in rent per month? Most likely you are in good shape, but those details help immensely.
I mean yeah I’m sure you probably can. Do a budget and see what it would cost monthly vs your monthly expenses, and see if you’re comfortable with that.
What’s the rate look like for mortgage?
Probably can. Work out a budget first so you can estimate the size of a mortgage you can carry. Rule of thumb is not more than 25% net income goes to housing.
Yes. Put more down if % is high.
[removed]
[removed]
I think it all depends on how much is in the HYS and the brokerage after you make the down payment. All the other accounts have a penalty for early withdrawals and are for retirement so I wouldn’t look at them as a fallback. If you don’t have six months living expenses in HYS, I would rent until you have enough saved or move to the (less expensive) burbs.
At 1/3 your gross income you can “afford” $7,700 a month. So yes you can.
Now, you have a very high income and savings so I’d probably do a larger down payment with money that is getting a lower return than the new mortgage rate. Investment income is also taxable outside of 401K/etc so saving interest is an investment too.
Insurance rates are skyrocketing in the city. Like we paid $1,200 5 years ago and were quoted 4-8000 this year!
I’m not sure in your case if putting 20% down is worth it just to avoid $100-$200 PMI which also lowers your interest rate. Assuming you can show high credit and your income on paper.
I would run scenarios of your monthly expenses and pretend one of you loses their jobs. Can you make it on one salary for a while since you’ve hit your savings goals? Also if you put 5% down instead of 20%, could you have a year’s expense safety net/cushion in a HYSA?
You shouldn’t have a problem in my opinion but you need to run numbers. Our numbers are similar but we have 4500 in monthly daycare costs too. We are saving fine.
Plan for closer to 2.5% property tax.
I live in Austin, and I’ll tell you that you’re in for quite an adventure. Houses in that price range are not plentiful and lots of people are looking. That being said, if I were buying another house with your income/savings, I would put at least 25% down ($200K) and get a 15-year mortgage. That should give you a better interest rate and still be affordable with your income. Also, remember that Austin utilities are pretty hefty, especially electricity and water. And property taxes and insurance are not cheap, either. Good luck! It’s still a great place to live!
1.6% is on the low side to be honest.
What are you taking home per month, and how old are you? $600k is a lot if you are 30, but not so much if you are 40 and have that high income. If you can continue to save appropriately for retirement, cover all your expenses and have a fully funded emergency fund, you should be okay.
Be mindful of being house poor, but it is very important to be happy where you are. Sounds like you are good.
1.6% is not high property tax. I think thats more like average.
Yeah 800k on $280k a year no kids should be easy.
How about WAIT
“But in Austin, according to the Freddie Mac House Price Index, **prices have fallen more than 11% since peaking in 2022**, the biggest drop of any metro area in the country.”
Austin has been the hottest housing market in this quadrant of the Galaxy, translation peak of the Bubble. Maybe rent a yr or 5 and let prices deflate to historic normal income/price ratio, then Buy your Money Pit, to keep up with whomever you are trying to keep up with, instead of taking that down payment/taxes/insurance/mortgage interest/repair expenses and a million other things and investing in VOO where you could earn much more than on a single family home on historical measures?
Sorry Austin homes lost 30-40% between 06-2013 like everywhere else, been there before
You should be fine. Congrats
2.5 times your income
I’m at about the same household income and no way I’d do it. At least not on these interest rates.
So you lost your job, is your combined income still $280k?