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Started By
Message
re: Homebuyers are now spending 40% of their gross income on mortgage and interest costs
Posted on 7/23/23 at 10:11 am to ellesssuuu
Posted on 7/23/23 at 10:11 am to ellesssuuu
quote:
I understand but a few people here wonder how people are getting mortgages with high DTI
10-4. I don’t understand how the OP or the person on twitter just equated the two and most just breezed over that part.
0
Posted on 7/23/23 at 10:13 am to Chicken
It’s too late in this thread to get good responses, but I wish everyone who posted the monthly percentage of income that their mortgage cost them and their interest rate would have also posted their age and location.
If I had to guess everyone saying low low numbers are above the age of 35 and live outside a major metropolitan area. I assume quite a few of these people bought when housing prices were low and refinanced to get that low rate. I’m happy the timing worked out for these people, but I wouldn’t shot on other people because they were given a mush shitter hand to play than you.
If I had to guess everyone saying low low numbers are above the age of 35 and live outside a major metropolitan area. I assume quite a few of these people bought when housing prices were low and refinanced to get that low rate. I’m happy the timing worked out for these people, but I wouldn’t shot on other people because they were given a mush shitter hand to play than you.
This post was edited on 7/23/23 at 10:20 am
Posted on 7/23/23 at 10:21 am to Chicken
I just copied the first 3 lines of the OP. I understand he or she was just copying from twitter. They start by saying, “Homebuyer DTI is now approaching 40% in 2023.” The next statement reads, “That means homebuyers are now spending 40% of their gross income on mortgage and interest costs.”
That’s not what that means though. Homebuyer DTI approaching 40% just means their total debt to income ratio is 40%…this number includes mortgage debt. The banks always include your future mortgage when they are figuring your DTI when applying for a loan.
That’s not what that means though. Homebuyer DTI approaching 40% just means their total debt to income ratio is 40%…this number includes mortgage debt. The banks always include your future mortgage when they are figuring your DTI when applying for a loan.
This post was edited on 7/23/23 at 10:24 am
Posted on 7/23/23 at 10:21 am to Bayou_Tiger_225
Crazy.
Let’s be generous and assume net income is 70% of gross. Meaning the debt is an even higher percentage of net. Close to 60% if you gross 10K per month for round numbers. This doesn’t include utilities, internet, phone, gas, insurance, etc.
How do people live like this?
Let’s be generous and assume net income is 70% of gross. Meaning the debt is an even higher percentage of net. Close to 60% if you gross 10K per month for round numbers. This doesn’t include utilities, internet, phone, gas, insurance, etc.
How do people live like this?
Posted on 7/23/23 at 10:21 am to Bayou_Tiger_225
My mortgage is 10% of wife’s gross income only. Mine varies since I am on commission
Posted on 7/23/23 at 10:24 am to ellesssuuu
We bought a big fixer upper when we were still young and rates were good. We saved up and renovated it a few years in. The idea was, we could grow with the space.
Best decision we’ve made.
Best decision we’ve made.
Posted on 7/23/23 at 10:27 am to PhiTiger1764
quote:
I guess it ultimately depends on what you bring in, but on the surface this is a pretty ridiculous take on the other end of the spectrum.
Obviously - Your income has the biggest influence on your % spent.
But no matter how little you earn, there has to be a hard line “somewhere” that says you will not borrow more than X.
The highest % we ever paid was 66%. Our mortgage and interest and taxes were $4100 per month or $49,200 per year. Our income was just under 75k per year.
But we were only in that situation for a year and knew our income would be $350,000 the next year minimum.
I still felt terrible making that high of a payment every month for the next year.
This post was edited on 7/23/23 at 8:51 pm
Posted on 7/23/23 at 10:36 am to hondapa26
quote:
You had lenders offer close to 40% what?
We qualified for mortgage sizes where payments would have been ~40% of gross monthly income.
Posted on 7/23/23 at 10:41 am to SECdragonmaster
quote:
But no matter how little you earn, there has to be a hard line “somewhere” that says you will not borrow more than X.
Sure… but 14% of net is an overly conservative metric for all incomes under like $500k.
If everyone followed that rule the housing market would collapse.
Posted on 7/23/23 at 10:42 am to ellesssuuu
quote:if you don’t mind answering, when did you buy, did you refinance, and age?
My mortgage is 10% of wife’s gross income only.
Posted on 7/23/23 at 10:44 am to SECdragonmaster
quote:
The highest % we ever paid was 66%. Our mortgage and interest and taxes were $4100 per month or $49,200 per year. Out income was $140,000 per year.
How are you getting 66%? I got a different number there
This post was edited on 7/23/23 at 10:46 am
Posted on 7/23/23 at 10:46 am to TDTOM
quote:
I have no clue how some of you live this way. I would lose my mind if my mortgage was anywhere near some of these numbers.
Same, but there's a lot more that goes into home ownership than just crunching numbers on a balance sheet.
I know people who are house poor but they live in the only great public school district, on a street with lots of other kids for their kids to play with and in a neighborhood where you don't have to worry about crime.
How do you put a price on the happiness and well being of your family?
A lot of people will sacrifice vacations, designer clothes, new cars and meals at nice restaurants to insure their wife and kids live in a better environment. I don't have a problem with that. It's all of the accessories that get people into trouble - a boat an ATV in the garage, fancy furniture, spage age electronics and appliances, every goody from Home Dept, etc.
Posted on 7/23/23 at 10:49 am to AUFANATL
I understand all that. However, at some of these numbers they are a 2 month layoff from defaulting.
Posted on 7/23/23 at 10:50 am to stout
People need to be flocking to low costs of living areas. And they have been - Texas has been bringing in transplants from California for decades now. But then those areas become HCOL areas as they are overwhelmed with transplants and have to build out more infrastructure and amenities to support the high consumption lifestyle they want to have.
So we need to identify new frontiers and expand them. Louisiana and Mississippi need to get their shite together.
So we need to identify new frontiers and expand them. Louisiana and Mississippi need to get their shite together.
This post was edited on 7/23/23 at 10:51 am
Posted on 7/23/23 at 10:50 am to AUFANATL
quote:
A lot of people will sacrifice vacations, designer clothes, new cars and meals at nice restaurants to insure their wife and kids live in a better environment. I don't have a problem with that. It's all of the accessories that get people into trouble - a boat an ATV in the garage, fancy furniture, spage age electronics and appliances, every goody from Home Dept, etc.
Exactly. Personal preference family to family. I'd rather have lower mortgage and have money for the extras/saving.
Posted on 7/23/23 at 10:51 am to dewster
quote:
So we need to identify new frontiers and expand them. Louisiana and Mississippi need to get their shite together.
We need to build out Bunkie, LA.
Posted on 7/23/23 at 11:32 am to Bayou_Tiger_225
Bought 10 years ago and refinanced 3 years ago to a 20 year term and I am 50 now.
Posted on 7/23/23 at 11:39 am to PhiTiger1764
quote:
That’s a $4600/mo mortgage on $200k. That sounds fricking terrible.
That still leaves you with ~7k for other bills and expenses for the month
Posted on 7/23/23 at 11:42 am to Epic Cajun
quote:
That still leaves you with ~7k for other bills and expenses for the month
Taxes
Savings
Kids
Private School
Cars
Phone
Internet
Power
Gas
Water
$4600 on a household $200k is nuts
Posted on 7/23/23 at 11:43 am to HailToTheChiz
quote:
$4600 on a household $200k is nuts
Definitely house poor.
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