The 28 Percent Rule

I requested A move. lol

This is the MTV Board. You gonna be on Fixer Upper or House Hunters?

I'm at around 17% of take home, but was higher when we first built. If you have a 20 or 30 year loan the % you pay now will be higher initially than it is at the end of the term of the loan. This of course assumes you get cost of living raises or raises in general as you progress through your career(s). I'm 2/3 through my loan term and have refinanced twice to get lower rates.
We now have kids in private school, no vehicle notes, but will have one kid driving in the near future, which adds significant additional expense.

As the house note becomes less of a % of our take home, other expenses fill in, and by the time our youngest can drive, our home will be paid off for a couple years.

Having been through this exercise years ago, I can say anything above 25% of take home can get uncomfortable if you are investment minded, i.e. contributing as you should to retirement. It leaves you less play/security/disposable money.

How about you just do some math and figure what you can afford after savings and expenses based on your own lifestyle

Anyone ever ask who makes the rules?

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Is this sound advice when determining how much to spend on a house note?

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the 28 percent rule is part of the 28/36 rule, which states that total housing costs should be no more than 28 percent of GROSS income, and total housing plus all other debt service should be no more than 36 percent of GROSS income.

It's a quick calc used by underwriters to see how hard they need to look at a mortgage package.

In today's world, where a lot of people (outside this board) have car notes, student loan debt, other consumer debt, etc, it sure seems like people hit the 36% total level before they hit the 28% house only level.

I'm at 11 percent on house. If I was close to 28, I would feel that a lot of other stuff (savings, travel, entertainment, etc) would be crowded out. I think as you get close to 28 percent, you tend to feel "house poor".

That might be ok for a few years, for example, you want to live in a desired school district and you think your income will rise at a steady clip.

Yep can’t bank on a house being an investment. Also have to account for projects that will arise from the new house I.e. landscaping, deck, outdoor kitchen etc not to mention the general upkeep and utility costs that come with the larger home. I was in my last home 12 years and just broke even when you take into account all the upgrades I put into the place over those years.