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Single vs. dual matters because part of the ‘comfortable’ is psychological. I am more comfortable spending $X/month if I know that I can easily generate another $50K/year income stream.
I used 25% because that’s what it takes to get the best rate. Your tax deduction is rather conservative. Assuming $600 in principal payment and $100 insurance (and skipping the MR deductible-or-not discussion) the deduction should be ~25-30%, i.e. ~$500-600/month.
Looking around, most 4S families are either families of retired/active military officers or immigrant engineers working at major SD companies. Usually with limited medical bills (decent insurance) and no student loans (foreign educated, government paid, etc).
I am not saying what you are getting in 4S Ranch is worth the money, just that fiscally-responsible single-income $125K/year family can rather comfortable afford $500K place.[/quote]
Psychological is different for different people. Some might find it more comforting that both parents are working and it’s easier to find a job when you were recently employed vs being out of the work force for so long.
How many people actually put down 25%? I don’t know the statistics, but I would assume it’s not that many. Especially people in the $400-600k range. I compute my tax deduction based on (interest + tax – standard deduction) * 25% tax bracket. You forgot the standard deduction in your calculation.
Even with decent insurance where you don’t have to pay for any of the premium, you still have out of pocket stuff, dental stuff, vision stuff. They add a little or a lot, depend on how much you use/need. How many people don’t have student loans? Why am I hearing all the talk about student loans being a huge problem, yet you don’t think anyone in 4S have student loans? I didn’t even talk about saving for rainy day yet, just retirement. Again, lets assume you’re right and those who live in 4S spend $0 on medical and student loan, how much does a family spend a month? You have $2200 to play with. How much would be a good rainy day saving? To me, comfortable would be saving $1k-2k/month for rainy day, on top of maxing out 401k and IRA. That would leave this theoretical family $200-1200 to spend on everything else. I don’t consider that comfortable.
All of this is talking about a $500k house too, how about a $600k house? If you recall, ocrenter was saying $400-600k and I said it should be more like $300-500k. Ideally, it would be $300-500k w/out HOA&MR.
