RayFinkle Posted January 23, 2009 Share Posted January 23, 2009 So how much of your gross monthly income do you pay toward your mortgage (PTI)? Is it anyplace close to 28%? Link to comment Share on other sites More sharing options...
Fezmid Posted January 23, 2009 Share Posted January 23, 2009 I don't like those "rules of thumb." A person should look at their current expenditures and determine what they can spend on their own. Don't rely on a bank to tell you. That's partially how we got into this mess to begin with! For my wife and I, we pay nowhere near 28%. We bought our place 6 years ago making sure that, with proper budgeting, we'd be able to afford the house on just my salary in case we have kids at some point. We're both still working, and that gave us the ability to put my wife through Carlson to get her MBA without taking a loan, as well as doing things that we want (vacations and such). It also means that if one of us gets laid off, we won't be struggling -- just have to cut back on some of the extra "fun" stuff we buy. Link to comment Share on other sites More sharing options...
BuffaloBill Posted January 23, 2009 Share Posted January 23, 2009 I don't like those "rules of thumb." A person should look at their current expenditures and determine what they can spend on their own. Don't rely on a bank to tell you. That's partially how we got into this mess to begin with! For my wife and I, we pay nowhere near 28%. We bought our place 6 years ago making sure that, with proper budgeting, we'd be able to afford the house on just my salary in case we have kids at some point. We're both still working, and that gave us the ability to put my wife through Carlson to get her MBA without taking a loan, as well as doing things that we want (vacations and such). It also means that if one of us gets laid off, we won't be struggling -- just have to cut back on some of the extra "fun" stuff we buy. Conservative but smart advice. Before the mortgage mess lenders were trying to get people to spend around 40% of household income on houses. In my opinion this is way too much unless you can truly see your way to some quick increases in household income. I also plan in my budget that about 1% to 2% of the value of my house will be spent in general maintenance and upkeep each year. So if you have a $200K house this means you will spend from $2K to $4K in maintenance - this could be anything from paint, to repairs to simple updates, replacing worn out items etc. (will depend somewhat on what you can do for yourself and the age of your house). I also plan that every 8 to 10 years you will need to make a major investment of 5% to 10% of the value of your house in some form of upkeep (again depends on the age of your house and how many "systems" you have but could be small remodel project, major replacement - carpeting, appliances, windows , roof, AC, gutters, furnace, pool systems etc). My personal numbers tend to be from the mid to the high side of these ranges even though I do alot of work myself as my home has a bit of age on it. People often fail to realize that it is expensive to keep your home in good operating and living condition. If you do not take this into account in your budgeting it can be a painful and expensive lesson. Link to comment Share on other sites More sharing options...
kegtapr Posted January 23, 2009 Share Posted January 23, 2009 We pay about 20% of our gross income on the mortgage (and about half that is taxes.) Were very comfortable, but I'd never want to go higher then that. Link to comment Share on other sites More sharing options...
plenzmd1 Posted January 23, 2009 Share Posted January 23, 2009 Well, if you are a good American then you should be spending about 40% of your income on your house, 40% in taxes of some form or another, another 20% for food. Now that you are 100% spent, please go out and save the American economy by spending more on your credit cards or equity line, as consumer spending is the only engine that will save economy. Link to comment Share on other sites More sharing options...
BuffaloBill Posted January 23, 2009 Share Posted January 23, 2009 Well, if you are a good American then you should be spending about 40% of your income on your house, 40% in taxes of some form or another, another 20% for food. Now that you are 100% spent, please go out and save the American economy by spending more on your credit cards or equity line, as consumer spending is the only engine that will save economy. The Alan Greenspan Plan Link to comment Share on other sites More sharing options...
LewPort71 Posted January 23, 2009 Share Posted January 23, 2009 I don't like those "rules of thumb." A person should look at their current expenditures and determine what they can spend on their own. Don't rely on a bank to tell you. That's partially how we got into this mess to begin with! For my wife and I, we pay nowhere near 28%. We bought our place 6 years ago making sure that, with proper budgeting, we'd be able to afford the house on just my salary in case we have kids at some point. We're both still working, and that gave us the ability to put my wife through Carlson to get her MBA without taking a loan, as well as doing things that we want (vacations and such). It also means that if one of us gets laid off, we won't be struggling -- just have to cut back on some of the extra "fun" stuff we buy. Good plan Fezmid. Mrs. Lew and I did that too. I am just glad our house is paid for. The 15 year mortgage ended in May of 2002,,,,,then in July of 2002 my eldest dau started college. So I traded one payment for another... Link to comment Share on other sites More sharing options...
Wraith Posted January 23, 2009 Share Posted January 23, 2009 I don't like those "rules of thumb." A person should look at their current expenditures and determine what they can spend on their own. Don't rely on a bank to tell you. That's partially how we got into this mess to begin with! For my wife and I, we pay nowhere near 28%. We bought our place 6 years ago making sure that, with proper budgeting, we'd be able to afford the house on just my salary in case we have kids at some point. Total agreement. My wife and I pay about 13% (that's net after income/property taxes/etc). That was by design because we plan on having my wife stay at home when we have kids. We already lead a pretty lean lifestyle and it's allowed us to build a very nice nest egg which is nice, in case one of us gets laid off. Link to comment Share on other sites More sharing options...
Fezmid Posted January 23, 2009 Share Posted January 23, 2009 After thinking about it, I was curious what percentage we paid towards the house. Turns out we pay a little under 10% of our GROSS pay towards our house each year, and that includes property tax payments (but not general upkeep). I think that's pretty good! Link to comment Share on other sites More sharing options...
plenzmd1 Posted January 23, 2009 Share Posted January 23, 2009 Total agreement. My wife and I pay about 13% (that's net after income/property taxes/etc). That was by design because we plan on having my wife stay at home when we have kids. We already lead a pretty lean lifestyle and it's allowed us to build a very nice nest egg which is nice, in case one of us gets laid off. See, you people are the reason the economy is in da chitter. Are you not a loyal American??? If you were a true patriot, you would heed your governments advice to spend, spend, spend!!!!!! After all, Mr Lewis at B of A said as much as to why he bought Merrill even after he found out he was being sold a bill of goods. He said Treasury told him for the good of America, he must continue with the purchase and wipe out his own stakeholders. You must do the same!!!! For the love of God,please start spending beyond your means again people!!!!!! BTW, my little rants are just a result of the complete fug up messages our government is giving us about the economy. We are in this mess cause we spent beyond our means, but the only way out of this mess is to spend beyond our means!!! Link to comment Share on other sites More sharing options...
Fezmid Posted January 23, 2009 Share Posted January 23, 2009 See, you people are the reason the economy is in da chitter. Are you not a loyal American??? If you were a true patriot, you would heed your governments advice to spend, spend, spend!!!!!! After all, Mr Lewis at B of A said as much as to why he bought Merrill even after he found out he was being sold a bill of goods. He said Treasury told him for the good of America, he must continue with the purchase and wipe out his own stakeholders. You must do the same!!!! For the love of God,please start spending beyond your means again people!!!!!! BTW, my little rants are just a result of the complete fug up messages our government is giving us about the economy. We are in this mess cause we spent beyond our means, but the only way out of this mess is to spend beyond our means!!! I spend my money on things other than my house in an attempt to help the economy. For example, I'm playing Fallout 3 on my new Epson 7500UB proctor. Link to comment Share on other sites More sharing options...
stuckincincy Posted January 23, 2009 Share Posted January 23, 2009 I spend my money on things other than my house in an attempt to help the economy. For example, I'm playing Fallout 3 on my new Epson 7500UB proctor. It's your earned $$$, Fez. Your generous advice has saved many a poster big bux and helped them out of technical problems. And others return in kind, about best ways to paint a door or cook this or that. It all works out doesn't it, we depend on each other, and I'm glad you enjoy your toy box. I like to hear about what new stuff you get. Link to comment Share on other sites More sharing options...
Tcali Posted January 24, 2009 Share Posted January 24, 2009 So how much of your gross monthly income do you pay toward your mortgage (PTI)? Is it anyplace close to 28%? If you are at 28% you are in good shape. Me--being in California----few of us go by that rule---and many either get rich or go bust...but we have a greater upside on our prop values in the long run as well as greater possible depreciation in the short run. Go with a 15 yr mortgage if possible--esp with the rates as they are now. Its nice to see a chunk of principal come off the loan each month. On a 30 yr loan for the first yr--if your loan is say 1500 /mo. you may see 1440 interest and 60 principal. a bit disheartening. Whereas on a 15 year it'll start out at 900 interest and 600 principal and improve quickly from there. Link to comment Share on other sites More sharing options...
Fan in Chicago Posted January 24, 2009 Share Posted January 24, 2009 So how much of your gross monthly income do you pay toward your mortgage (PTI)? Is it anyplace close to 28%? Right now, I pay a little shy of 17% and am perfectly happy. At the time I bought the house about 5 years back, it was something like 25% and my real estate agent was pushing me to get close to 35% which I politely declined. Link to comment Share on other sites More sharing options...
justnzane Posted January 24, 2009 Share Posted January 24, 2009 i think i am crazy for paying 21% for rent right now. Whoever said 28% deserves to be clubbed in the head with slash's rubber dildo and then have their face smeared into crayonz hamsters' crap Link to comment Share on other sites More sharing options...
/dev/null Posted January 24, 2009 Share Posted January 24, 2009 i think i am crazy for paying 21% for rent right now. Whoever said 28% deserves to be clubbed in the head with slash's rubber dildo and then have their face smeared into crayonz hamsters' crap The ladies seem to enjoy that Link to comment Share on other sites More sharing options...
justnzane Posted January 24, 2009 Share Posted January 24, 2009 The ladies seem to enjoy that Well, after all they have to use it, due to your impotence. Might want to take Bob Dole's advice and Link to comment Share on other sites More sharing options...
Kevbeau Posted January 26, 2009 Share Posted January 26, 2009 We pay about 7% taxes/etc. included. Granted we're DINKs and bought the hosue eight years ago when our income was significantly less. Thought about getting a bigger place, but we don't use the upstairs in this house as it is. Link to comment Share on other sites More sharing options...
zevo Posted January 26, 2009 Share Posted January 26, 2009 Determining what one can afford mortgage wise by gross income is absurd. Gross income is a ficticious number that factors in money that will never touch your hands. Gross income does not take into account taxes, long-term debt (school loans) and retirement funds. These values should always be taken into account to get a better gauge of what someone can actually afford. Link to comment Share on other sites More sharing options...
justnzane Posted January 26, 2009 Share Posted January 26, 2009 Determining what one can afford mortgage wise by gross income is absurd. Gross income is a ficticious number that factors in money that will never touch your hands. Gross income does not take into account taxes, long-term debt (school loans) and retirement funds. These values should always be taken into account to get a better gauge of what someone can actually afford. ... exactly Link to comment Share on other sites More sharing options...
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