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TheRange
Monmouth Fan
Member since Aug 2017
47 posts

Monthly housing payments--How much?
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This post was edited on 2/23 at 10:04 pm


Paul Allen
Notre Dame Fan
Montauk, NY
Member since Nov 2007
55813 posts

re: Monthly housing payments--How much?
Less than 35% for sure, but optimally speaking 25-28%.


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lsujro
LSU Fan
BR
Member since Jul 2007
3054 posts

re: Monthly housing payments--How much?
quote:

Assuming 20% down payment. 30 year loan. what percentage of your salary should you allocate for housing costs (mortgage, taxes, insurance) when you are trying to figure out how much you can afford monthly?



i always tried to keep mine under 30% of take home pay. it was hard to do starting out, but i'm now significantly lower than that. this was the most i was comfortable with personally.


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10
Hussss
Auburn Fan
Living the Dream
Member since Oct 2016
3901 posts

re: Monthly housing payments--How much?
What might really help you is to itemize your monthly expenses and don't forget to leave room for home repairs, etc. almost like an extra emergency fund strictly for the house. This will give you a good picture on a comfortable purchase.


notsince98
Missouri Fan
KC, MO
Member since Oct 2012
9573 posts

re: Monthly housing payments--How much?
it will depend on your lifestyle and budgeting choices. That is really up to you

My own personal limit is mortgage+HOI+property taxes<25% of 2 biweekly "take home" paychecks.

I specifically call out 2 biweekly paychecks because I budget off of 2 paychecks per month and in the 2 months a year where I get 3 paychecks, the entire paycheck is pure gravy.
This post was edited on 1/8 at 12:34 pm


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130
lynxcat
Rutgers Fan
Member since Jan 2008
19987 posts

re: Monthly housing payments--How much?
I wouldn’t worry about percentages. What matters is disposable income remaining in absolute dollars.


756
LSU Fan
Member since Sep 2004
13742 posts

re: Monthly housing payments--How much?
25% is the right number, now no one is going to get mad if you do 26 or 27



EA6B
Navy Fan
TX
Member since Dec 2012
9214 posts

re: Monthly housing payments--How much?
quote:

I wouldn’t worry about percentages. What matters is disposable income remaining in absolute dollars.


That's the way I have always viewed it, a person could be at a level of income where they could easily pay a mortgage that was 50% of their net pay and be financially sound, conversely, at some lover income level 25% would even be too much for housing.


kciDAtaE
Member since Apr 2017
4083 posts

re: Monthly housing payments--How much?
quote:

That's the way I have always viewed it, a person could be at a level of income where they could easily pay a mortgage that was 50% of their net pay and be financially sound, conversely, at some lover income level 25% would even be too much for housing.


Exactly. My mortage is right around 40%. It’s my only debt. No kids. Still contribute around 25% to retirement. I can still live the life I want without issues.

Every situation is different


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40
deeprig9
Georgia Fan
Member since Sep 2012
32727 posts

re: Monthly housing payments--How much?
Mine is at 15% of household takehome and even that feels high. Being over 30% sounds insane to me.


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61
LSUtoOmaha
LSU Fan
Nashville
Member since Apr 2004
24688 posts
 Online 

re: Monthly housing payments--How much?
Up to 25% of take home. 20% is more comfortable answer.


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10
Thib-a-doe Tiger
LSU Fan
LaTour and in BRgetthenet's head
Member since Nov 2012
28017 posts

re: Monthly housing payments--How much?
quote:

25% is the right number, now no one is going to get mad if you do 26 or 27




I’m at 28%, fight me


TheWiz
LSU Fan
Third World, LA
Member since Aug 2007
9748 posts

re: Monthly housing payments--How much?
We are currently at 11.3%

If you factor in the $2500/month student loan it puts us at 28%.


tigerbacon
LSU Fan
Arkansas
Member since Aug 2010
2157 posts

re: Monthly housing payments--How much?
I’m at 18 percent


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MrJimBeam
New Orleans Saints Fan
Member since Apr 2009
2198 posts

re: Monthly housing payments--How much?
25-30% max, but it really depends on how much you make, too. I put less than 20% down on my own home so I could leverage the rest of the money towards promising business. At the end of the day, it really depends on how you want to utilize your money; however, your cash flow needs to be at a certain comfortable number and if for some reason it isn't, you need to adjust.


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ItNeverRains
LSU Fan
Franklin, TN
Member since Oct 2007
13687 posts

re: Monthly housing payments--How much?
How much do you make? the industry standard is maximum household expenses won’t exceed 28 percent of your gross monthly income; total household debt doesn’t exceed more than 36 percent of your gross monthly income (known as your debt-to-income ratio).

That said if you make 60k or 600k there are certainly some considerations to both to lean to one side of the spectrum or the other.


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LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
14011 posts

re: Monthly housing payments--How much?
The "standard" max for lending is 28% of gross income for PITI, 36% for that plus other debt.

FHA will usually go a bit higher as well as some other lenders but that may come at higher costs/rate.

I've been right at that 28% before. It's painful.

Combining my wife and I's income, we are at 10%. Certainly we could afford more, but that would cut into our other financial and life goals.


ell_13
USA Fan
Member since Apr 2013
62025 posts

re: Monthly housing payments--How much?
We are at 26% right now based solely on salary. I agree it's not "easy" or even very comfortable. But we do well with bonuses and there's a possible big jump in pay for me in the very near future that would drop it to 19% on salary alone.


BitBuster
LSU Fan
Lafayette
Member since Dec 2017
701 posts
 Online 

re: Monthly housing payments--How much?
I'd say no more than 25% of your take-home paycheck would be ideal. That said, when you're just starting out you may need to hit just above that mark to get a home in a safe neighborhood.

I've had friends get a big house and be house poor - eating ramen and driving beaters, no furniture in some bedrooms. Realtors and bankers want you to believe that your house is your greatest asset. Don't believe 'em. Get what you need.


Sacrifice_blunts
LSU Fan
Member since Jun 2013
249 posts

re: Monthly housing payments--How much?
quote:

The "standard" max for lending is 28% of gross income for PITI, 36% for that plus other debt.


This is wrong and really doesn't have to do with what the OP asked. But to correct you so the wrong info isn't out there. Putting down 20% you're 99% going to be a conventional loan. I would say "standard" max would be 45% on the back end. There are no set limits unless it is a certain overlay by a lender or a manual underwrite situation. Conventional, and most all other programs, ratios are set by an automated underwriting system. If you have above a 640 you will probably be able to go up to 50% on the back end on conv. FHA 55% and VA 60+%. Even with a manual underwrite (typically due to low scores or recent bankruptcy) the limit is 29/41.


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