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Is saving for a huge down payment a valid strategy to responsibly purchase a house you shouldn't have been able to afford?

My spouse and I are in our early 30s and have been big savers since we've gotten together. We have $180k (and growing) earmarked for a house purchase, as well as $450k in retirement accounts and no outstanding debts. We have two kids under 4 and have been passively looking to purchase a house where we can settle for the long term.

However, my wife is now a stay at home mom (and will be for the foreseeable future), leaving us to rely solely on my annual income of $85k. Unfortunately, we've found that the housing options we would be comfortable with in the areas we want are too expensive, when considering our current income, with homes ranging from $450k to $500k.

Currently we're "in-between moves"; we're living with my parents, rent-free, which kind of puts us in a good position to save even more towards a down payment. While we're content here (and they are happy to have us stay here for as long as we want), we're eager to have a place of our own to raise our family and make our own.

Our plan is to keep saving towards the down payment over the next year to reduce our monthly mortgage payment to a comfortable amount (<28% rule?) and ensure that we can purchase a house that meets all of our needs/wants without having to make any significant compromises.

Thoughts? Anything I am missing or not thinking about that makes this a terrible plan? Any other advice is also welcome...

submitted by /u/Ffff-account
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source https://www.reddit.com/r/RealEstate/comments/114oj3q/is_saving_for_a_huge_down_payment_a_valid/
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