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re: Is the 28% rule too much?
Posted on 5/31/20 at 6:15 pm to Ingeniero
Posted on 5/31/20 at 6:15 pm to Ingeniero
I’m at 24%. We are good, but not sure what else we could have done give them the Dallas real estate prices. Good school district and it’s a house we would be happy to stay in forever. Taxes and insurance together are almost more than my mortgage.
Edit: I’m using take home pay.
Edit: I’m using take home pay.
This post was edited on 5/31/20 at 7:47 pm
1
Posted on 5/31/20 at 6:28 pm to schexyoung
I am currently at 7% of pretax income. We are house shopping now and I can't bring myself to pay over 10%. 25% would drive me nuts.
Posted on 5/31/20 at 6:43 pm to Epic Cajun
I'm going to be at about 24% on my upcoming mortgage. I'm okay with since, since I'm only borrowing about 1/3 the cost of the new home, but I haven't had any mortgage for about 8 years, so it will be an adjustment.
Posted on 5/31/20 at 8:03 pm to kywildcatfanone
I wouldn’t go more than 20 percent take home which includes mortgage, and taxes. I like doing what I want when I want. I’m actually at 17% take home.
Posted on 5/31/20 at 9:33 pm to tigerbacon
quote:
wouldn’t go more than 20 percent take home which includes mortgage, and taxes. I like doing what I want when I want. I’m actually at 17% take home.
This. I’ve read this thread, and I’ve never heard of the 25-28%.
We’re at 10%, but putting an extra $1k/month into the mortgage as well.
It’s not a forever home by any means, but I could not stand to see that money (25-28% of my take home income) go into a mortgage paying interest like that.
Posted on 5/31/20 at 10:24 pm to BamaCoaster
Only way to get to those low of percentages are living on a super cheap COL area, make a significant income, a small house, or a big down payment / rolled equity from a prior home.
I think we all agree that a “lower percentage is better” but using 30% of income when making $75K and year versus 30% making $250K are quite different (I.e., the cash flow commentary).
I think we all agree that a “lower percentage is better” but using 30% of income when making $75K and year versus 30% making $250K are quite different (I.e., the cash flow commentary).
This post was edited on 5/31/20 at 10:25 pm
Posted on 5/31/20 at 10:38 pm to lynxcat
Yep.
Big difference between spending 3k/month on housing on a 10k monthly take home and spending 1.5k/month when you're only taking home 5k/month.
Both are spending 30%, but the 10k/month take home family still has 7k left to pay for everything else/savings. The 5k take home family only has 3.5k left over.
As has been said, this decision should be driven by a properly developed budget. Not some arbitrary percentage.
Depends on your values as well. Some people really value which neighborhood they live in and there's nothing inherently wrong with sacrificing extra travel or dining out or other discretionary spending if you value those things less.
Big difference between spending 3k/month on housing on a 10k monthly take home and spending 1.5k/month when you're only taking home 5k/month.
Both are spending 30%, but the 10k/month take home family still has 7k left to pay for everything else/savings. The 5k take home family only has 3.5k left over.
As has been said, this decision should be driven by a properly developed budget. Not some arbitrary percentage.
Depends on your values as well. Some people really value which neighborhood they live in and there's nothing inherently wrong with sacrificing extra travel or dining out or other discretionary spending if you value those things less.
Posted on 5/31/20 at 11:20 pm to JohnnyKilroy
Lots of good advice in the thread.
Only question I ask is if you can swing the mortgage on one income for a bit?
Doesn't have to be forever. But could you get by for 12-24 months?
It could be recession reasons, health reasons, or having kids and not working for a bit reasons.
Only question I ask is if you can swing the mortgage on one income for a bit?
Doesn't have to be forever. But could you get by for 12-24 months?
It could be recession reasons, health reasons, or having kids and not working for a bit reasons.
Posted on 6/1/20 at 6:09 am to meansonny
I think I could. It wouldn't be nearly as much fun, but I could do it and still have all the essentials. It'd mean a whole lot less fishing gear though 
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