What percentage of your pre-tax income goes towards your mortgage?

[Exterous]

The common recommendation is around 28% although we've ended up staying in our house for longer than I thought we would so ours is down to ~12%

 

[sdifox]

What happened to under 10%?

 

[purbeast0]

right now with my wife not working and staying home with the kid, 20% of my pretax goes towards mortage + taxes. just under 16% if we're talking mortgage only.

my wife goes back to work in october though so that's going to make us feel like we have a lot more breathing room and get back to our "normal" life style. when that happens, it'll be 12.5% towards mortgate + taxes, just over 10% for mortgage.

 

[Exterous]

What happened to under 10%?

Thats the card board box option duh

 

[thedarkwolf]

Bought well within my means when I wasn't making shit so now that I'm making a little shit my mortgage is only 13% of my income.

 

[vi edit]

15% with full escrow, although I wish it were less than that.

 

[jaha2000]

8% or so with full escrow.

 

[cbrunny]

28% seems completely-off-the-charts-insane to me. No wonder the middle class is struggling.

We are sitting at barely over 10%. I think that's too high LOL

 

[Thump553]

I've been a homeowner since the late 70s and I doubt it has ever been less than 30%. In fact for part of the first year is was nearly 50% (my wife quit work after having a baby, her income was counted in the mortgage app). Never missed a mortgage payment or even been late. But am also very frugal in other fields-never had any student debt (paid own way through school), rarely had any car loans and credit cards PIF every month.

IMO 28% is way too conservative for someone reasonably competent at budgeting.

 

[xeemzor]

0%. Renting and happy for it.

 

[rcpratt]

For me and my fiance's incomes combined, about 11%. But we're paying more than our mortgage on student loans currently, so that number will go up once the loans are gone and we can upgrade.

 

[KentState]

Quick math says 8%. Something about paying more than $1500/month for a house makes me feel uncomfortable.

 

[Homerboy]

~25%

That being said, I have about 18 more months on my mortgage!!!!

 

[cbrsurfr]

Currently 38% taking into account rental income, but that's over 3 homes. Once I sell my flip that will go back down. No other debt and max out my 401K.

 

[PricklyPete]

At about 20% if I don't include my year end bonus. Used to be less than that, but wife does not work now that we have kids. This is our only debt and 20% is completely manageable.

 

[Riverhound777]

Mine is high, somewhere around 20-30% depending on how much I make each month, but I live in the Santa Barbara area, so not much choice here if I want to own. Oddly it doesn't really seem that high to me now that i've gotten use to it. I gross from 6.5-7.5k and my mortgage is $1650. if I can't live off the rest of that, then I have issues.

I'm still able to live pretty comfortably and save for retirement. I put 20% down and my rate is historically now, so why not? Plus the rental market here is crazy high, which sucks if you want to rent, but is also good for me since I rent out a room. Oh and no kids probably helps. If I do have kids, there will likely be dual income, so that will change things.

There are too many variables to make judgement on if you should buy a home just looking at mortgage to income ratio.

 

[MomentsofSanity]

~9%. I was denied a poll option to select

 

[Sonikku]

What happened to under 10%?

What do you think this is, the 70's?

 

[IronWing]

0%, I bought within my means and paid off early.


I previously really did live in a cardboard box. Prior to our renting the place, the roof had rotted out so the slumlord had ripped off the roof decking and replaced it with joists => cardboard => tar paper => elastometric roof paint. When changing the filters on the swamp cooler one had to take care to step only on the joists. You're probably shocked to learn that this roof also leaked. The slumlord eventually hired a real roofing company to repair it. We warned the roofers that there was no deck on the roof. The foreman looked at us like we were idiots and then one of his workers promptly put a leg through the ceiling.

 

[rh71]

Our property/school taxes ($15k/year) make up almost half our monthly mortgage payment, and home insurance cost is also figured into it.

15% (only because my wife is a NYC baller and drives our total income up, but we are talking pre-tax)

 

[PricklyPete]

Our property/school taxes ($15k/year) make up almost half our monthly mortgage payment, and home insurance cost is also figured into it.

15% (only because my wife is a NYC baller and drives our total income up)

Your taxes are insane. I grew up in CT (right on the New York border) and remember how ridiculous taxes were for my Dad. Those insane taxes did not seem to have any appreciable social benefit relative to what I see here in CO...so I fail to see why they are so high other than government waste. That would just piss me off.

 

[piasabird]

You cant just look at your mortgage. As a house ages it needs constant repair and maintenance. Windows need replacing, furnace breaks down, roof has to be replaced, driveways crumble to dust, trees need trimming, bathrooms and plumbing need repairs, Kitchens need fixing, chimney needs repair, water heater dies,Washer and dryer needs replacement, It never ends.

The HARP loan program is great if your interest rates are a little high. I just refinanced and am saving $250 a month by getting a lower interest rate. When I originally purchased the house, I could barely afford it.

Property TAX is deductible and can be used to offset your taxes.

I started a second savings plan at work. I selected a plan that is pre-tax or tax deferred so what it does is it lowers your actual taxable income so you pay less taxes. I know eventually you have to pay taxes on it. This plan allows you to save more money at the end of your income years right before you retire. It would probably not be good for you if your income is too high. Mine is not too high but neither is my Mortgage.

I am no financial expert. However, we did allright even in some tough lean years. When my wife was 50 she got laid off from her bank job however, she had worked long enough to call it a retirement and she converted her savings plan over to a Scottrade IRA and made some money during the financial recovery. Even in those tough years, she made money on the market's recovery. Of course we spent a lot of the profits because we had to. A foolish person would have cashed out and wasted it all.

 

[local]

We are at about 24% since twins happened and my wife stopped working. It was at 32% two years ago when they were born but I have received some very welcome raises since then.

 

[MomentsofSanity]

You cant just look at your mortgage. As a house ages it needs constant repair and maintenance. Windows need replacing, furnace breaks down, roof has to be replaced, driveways crumble to dust, trees need trimming, bathrooms and plumbing need repairs, Kitchens need fixing, chimney needs repair, water heater dies,Washer and dryer needs replacement, It never ends.

That's the entire point. Keep your fixed debt servicing ratio lower to ensure you have available funds for incidentals as they arise.

 

[nageov3t]

n/a, I rent.

but about 20% of my post-tax income goes towards my half of the rent.