what % of your gross income...

tsaw2000 · March 2013

goes to your mortgage payment? stressin about 1st home purchase...tia!

HappyAardvark · March 2013

You won't qualify for a mortgage if your DTI ratio is over 40 percent with the new mortgage, I believe.

Our new mortgage is a little less than 30 percent.

tsaw2000 · March 2013

HappyAardvark:
You won't qualify for a mortgage if your DTI ratio is over 40 percent with the new mortgage, I believe. Our new mortgage is a little less than 30 percent.

we've been prequalified already. the payment is doable...just a lot more than we are paying now.

jwls84 · March 2013

We have a small mortgage at the moment and we pay about 8 percent of our monthly income on our mortgage.
However we are looking to buy a new house so our new payments will be 15 percent.
I know it is nerve wracking to think about the payments but my biggest piece of advise for any first time home buyer is to shop at the lower end if your budget, if possible so that you feel more comfortable.

morsey2011 · March 2013

Around 12%.

kagl08 · March 2013

26.5%

tsaw2000 · March 2013

kagl08:
26.5%

That's a little more like it...& you aren't house poor?

kagl08 · March 2013

tsaw2000:
kagl08:
26.5%
That's a little more like it...& you aren't house poor?

No, we aren't house poor, we are poor poor. Meaning, DH makes more than enough to sustain our mortgage payment and we'd be just fine with it if we didn't have so much other debt. This debt accrued AFTER we purchased our home, so it wasn't factored before purchasing. We were carrying 2 mortgages for 2 years, so it added up.

I believe the norm is 1/2-1/3 your monthly income, not your gross...

I hope this made sense.

tsaw2000 · March 2013

kagl08:
tsaw2000:
kagl08:
26.5%
That's a little more like it...& you aren't house poor?
No, we aren't house poor, we are poor poor. Meaning, DH makes more than enough to sustain our mortgage payment and we'd be just fine with it if we didn't have so much other debt. This debt accrued AFTER we purchased our home, so it wasn't factored before purchasing. We were carrying 2 mortgages for 2 years, so it added up.
I believe the norm is 1/2-1/3 your monthly income, not your gross...
I hope this made sense.

yes, thank you!

kagl08 · March 2013

tsaw2000:
kagl08:
tsaw2000:
kagl08:
26.5%
That's a little more like it...& you aren't house poor?
No, we aren't house poor, we are poor poor. Meaning, DH makes more than enough to sustain our mortgage payment and we'd be just fine with it if we didn't have so much other debt. This debt accrued AFTER we purchased our home, so it wasn't factored before purchasing. We were carrying 2 mortgages for 2 years, so it added up.
I believe the norm is 1/2-1/3 your monthly income, not your gross...
I hope this made sense.
yes, thank you!

You're welcome! Good luck with your 1st home purchase!

BeesMomma00 · March 2013

Our mortgage payment is only about 10% of our gross pay.

That being said, we have another home which is another 10% and daycare which is 8-9%. Come September, we;ll have another in daycare at 8-9%.

I know the last 2 don't really count as mortgages, but they feel like it.

HappyAardvark · March 2013

We are definitely not house poor. But here's what it comes down to, in very rough terms: if you buy up to your Max that the bank will approve, say 40 percent. Your remaining amount is 60 percent. If your monthly income is 1000. Its going to be a lot harder to live on 600 for all the rest of your expenses than it would be if your monthly income was 10000 and you had to budget with 6000. Gas, groceries, phone bills, student loan payments, etc, are the same regardless of your mortgage. So depending on your income level, you should consider your whole budget in very realistic terms. We did it all in excel and played with the numbers until we had reached a threshold we were not comfortable exceeding.

Maybe this makes no sense and I've had too much wine.

kagl08 · March 2013

HappyAardvark:
We are definitely not house poor. But here's what it comes down to, in very rough terms: if you buy up to your Max that the bank will approve, say 40 percent. Your remaining amount is 60 percent. If your monthly income is 1000. Its going to be a lot harder to live on 600 for all the rest of your expenses than it would be if your monthly income was 10000 and you had to budget with 6000. Gas, groceries, phone bills, student loan payments, etc, are the same regardless of your mortgage. So depending on your income level, you should consider your whole budget in very realistic terms. We did it all in excel and played with the numbers until we had reached a threshold we were not comfortable exceeding. Maybe this makes no sense and I've had too much wine.

Makes total sense to me! This is what we considered also when purchasing a home. While DH doesn't make $6,000 a month, he makes a decent amount. If we were making $1,000 a month, there's no way we would have felt comfortable with nearly 30% of our income to our mortgage.

tsaw2000 · March 2013

HappyAardvark:
We are definitely not house poor. But here's what it comes down to, in very rough terms: if you buy up to your Max that the bank will approve, say 40 percent. Your remaining amount is 60 percent. If your monthly income is 1000. Its going to be a lot harder to live on 600 for all the rest of your expenses than it would be if your monthly income was 10000 and you had to budget with 6000. Gas, groceries, phone bills, student loan payments, etc, are the same regardless of your mortgage. So depending on your income level, you should consider your whole budget in very realistic terms. We did it all in excel and played with the numbers until we had reached a threshold we were not comfortable exceeding. Maybe this makes no sense and I've had too much wine.

regardless of whether or not you've had to much wine...i need help sooo...if our monthly income is 3600 & the mortgage is 1550 & a car payment of 300...no other debt just monthly bills and baby #2 on the way...

stardust317 · March 2013

Ours is about 9 but we bought a dirt cheap, foreclosed home. In the next 5 years, we will be looking at buying a bigger house, more like 2025 .

HappyAardvark · March 2013

Woodsie:
3600 net or gross?

this. Though I'm guessing net.

tsaw2000 · March 2013

Woodsie:
3600 net or gross?

net

BeesMomma00 · March 2013

tsaw2000:
Woodsie:
3600 net or gross?
net

What are your plans for daycare? If our combined income were $3600 and our mortgage $1500... I personally wouldn't feel comfortable doing it. That being said... we pay a great deal for daycare where I live. If I had a lower-cost daycare option that I was comfortable with, I'd consider it.

HappyAardvark · March 2013

And is that mortgage all in? Including PMI, taxes, insurance, hoa fees, etc etc?

Honestly, that seems a little tight. Not impossible, but you will definitely have to budget carefully and things may get hairy if you have a big, unexpected expense, like a big car repair, or your water heater sh!ts the bed, those kinds of things. Do you have any savings? I'd personally feel better if that were the case, knowing there was a bit of an emergency cushion.

tsaw2000 · March 2013

no daycare costs...SAHM. minimal savings & open line of credit in case of emergency i suppose.

tsaw2000 · March 2013

Thanks all...even more stessed. gonna call it a night.

HappyAardvark · March 2013

Math it out: total cash inflow less estimated cash outflow accounting for ALL bills. Mortgage, utilities including electricity, sewer, water, cable, Internet, gas, and trash, phones, credit cards, student loans, medical bills, car payment, car insurance, gas for the cars, groceries, dry cleaning, eating out including lunches while your h is at work, EVERYTHING. And for the ones that are variable, look at your average over a few months. Look at your bank statement and tally it all up. It might be a valuable exercise anyway. It definitely was for me when I did it.

RichardSlap · March 2013

tsaw2000:
HappyAardvark:
We are definitely not house poor. But here's what it comes down to, in very rough terms: if you buy up to your Max that the bank will approve, say 40 percent. Your remaining amount is 60 percent. If your monthly income is 1000. Its going to be a lot harder to live on 600 for all the rest of your expenses than it would be if your monthly income was 10000 and you had to budget with 6000. Gas, groceries, phone bills, student loan payments, etc, are the same regardless of your mortgage. So depending on your income level, you should consider your whole budget in very realistic terms. We did it all in excel and played with the numbers until we had reached a threshold we were not comfortable exceeding. Maybe this makes no sense and I've had too much wine.
regardless of whether or not you've had to much wine...i need help sooo...if our monthly income is 3600 & the mortgage is 1550 & a car payment of 300...no other debt just monthly bills and baby #2 on the way...

Our income is in that range and I definitely wouldn't be comfortable with that mortgage payment. I am also a mom of 2, and your grocery bill is about to get real.

tsaw2000 · March 2013

Seems like we'd have 300-400 left each month...we usually spend that unnecessarily...so we could easily turn that into savings

Ms.Jade · March 2013

It's been a while since I've run these numbers and it was interesting to see. We're at 20%.

mrs-smith2b · March 2013

Richard Slap:
tsaw2000:
HappyAardvark:
We are definitely not house poor. But here's what it comes down to, in very rough terms: if you buy up to your Max that the bank will approve, say 40 percent. Your remaining amount is 60 percent. If your monthly income is 1000. Its going to be a lot harder to live on 600 for all the rest of your expenses than it would be if your monthly income was 10000 and you had to budget with 6000. Gas, groceries, phone bills, student loan payments, etc, are the same regardless of your mortgage. So depending on your income level, you should consider your whole budget in very realistic terms. We did it all in excel and played with the numbers until we had reached a threshold we were not comfortable exceeding. Maybe this makes no sense and I've had too much wine.
regardless of whether or not you've had to much wine...i need help sooo...if our monthly income is 3600 & the mortgage is 1550 & a car payment of 300...no other debt just monthly bills and baby #2 on the way...
Our income is in that range and I definitely wouldn't be comfortable with that mortgage payment. I am also a mom of 2, and your grocery bill is about to get real.

I agree. DH's income is in that range & I SAH. Our mortgage is $550 including taxes and insurance. (Granted, we live in a very affordable location.) After student loans, groceries, utilities, car payment, emergencies...we live comfortably. I wouldn't feel comfortable with a mortgage that high.

ChaiMomma · March 2013

I also agree that it depends on all of your financial info. Our mortgage is 26% of our gross income. However, our only other major costs are daycare and groceries, so we have a decent amount left at the end of each month.

Creedon778 · March 2013

8 percent including insurance and taxes. We have a 15 year mortgage and we pay a little extra so we will have it paid off in about 9 years.

Some of our friends have mortgages twice ours and they make the same or less but I like having the peace of mind of lower debt and more savings.

HappyAardvark · March 2013

2 days later, comprehension fail. You said gross income, not net. That would put us around 20 percent.

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