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Cblack23
LSU Fan
Da Boot
Member since Jun 2017
109 posts

What is the “normal” ratio of mortgage loan vs annual income?
I’m about to jump into a mortgage that is roughly 2.3 times what I bring in annually. Am I “OK” at this rate or am I forcing myself into a tough situation?

Additional info...
Single income
3 kiddos
Other than mortgage, bills/other debts are typically 23% of income

Appreciate any advice, TIA.


ReadyPlayer1
LSU Fan
Member since Oct 2020
241 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
2.3 times you gross or net ?

Following also


castorinho
Oklahoma Fan
13623 posts
Member since Nov 2010
74482 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
quote:

What is the “normal” ratio of mortgage loan vs annual income?
There's really no normal, as same income has a wide range of expenses.


tigersfan1989
LSU Fan
Member since Oct 2018
675 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
Mine originally was 2.5 times at the time. As years go by your income generally increases and it didn’t feel as bad over time. You’ll be fine 2.5X or under. To me it’s more important from a cash flow perspective that you’re ok rather than a total loan amount
This post was edited on 2/22 at 6:17 pm


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20
MaxDraft
Baton Rouge
Member since Aug 2019
441 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
I don't think there's a solid rule to follow here. It all comes down to what are you comfortable with. And by "you," I mean your lifestyle...not what you think in your head you can do.

2.5 or 3xs annual salary can make sense for some folks, but not others. It's really all about the other expenses, including your discretionary.


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60
fallguy_1978
LSU Fan
Half mile from St George
Member since Feb 2018
33459 posts
 Online 

re: What is the “normal” ratio of mortgage loan vs annual income?
2.5 times gross used to be the old adage but obviously that depends on many other factors.


kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
77953 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
My new mortgage is about 2.5x my annual salary.


Cblack23
LSU Fan
Da Boot
Member since Jun 2017
109 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
Gross


MrJimBeam
New Orleans Saints Fan
Member since Apr 2009
5289 posts
 Online 

re: What is the “normal” ratio of mortgage loan vs annual income?
How much debt outside of a mortgage is there? This is what matters. Total cash incoming available vs outgoing. My wife and I didn't have debt when we bought a house. We bought a house just over 2.5 times our gross salaries at the time. Has been pretty easy to manage.


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20
ellesssuuu
Baton Rouge
Member since Mar 2016
1536 posts
 Online 

re: What is the “normal” ratio of mortgage loan vs annual income?
For mortgage approval it’s 45% total debt to income ratio


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20
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Upperdecker
US Space Force Fan
St. George, LA
Member since Nov 2014
23897 posts
 Online 

re: What is the “normal” ratio of mortgage loan vs annual income?
quote:

What is the “normal” ratio of mortgage loan vs annual income?

Don’t worry about “normal”. “Normal” people are on average not preparing for retirement and in debt up to their chins. Be better than normal


WDE24
Yale Fan
Member since Oct 2010
48253 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
quote:

Single income
3 kiddos
you’ll never make enough money



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201
Paul Allen
Notre Dame Fan
Montauk, NY
Member since Nov 2007
66373 posts
 Online 

re: What is the “normal” ratio of mortgage loan vs annual income?
So if you make $100,000 a year your house should be only $250,000? Seems awfully low.
This post was edited on 2/22 at 7:43 pm


tigersfan1989
LSU Fan
Member since Oct 2018
675 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
If you’re single making 100k and your house is 250k yea that could be low. If youre married single earner and have 3 kids then I wouldn’t consider that low that is probably around where someone would need to be
This post was edited on 2/22 at 8:01 pm


Cblack23
LSU Fan
Da Boot
Member since Jun 2017
109 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
You’re right, we purchased property in 2018 with the intention to build in 2021, little did we know what 2020 would do to the construction material prices.

Just wanted to survey some smart people’s opinions.

Thanks for all the replies


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MrJimBeam
New Orleans Saints Fan
Member since Apr 2009
5289 posts
 Online 

re: What is the “normal” ratio of mortgage loan vs annual income?
Again, if you have no debt, 3x gross probably isn’t going to be difficult if you are good with money. So 300k on 100k is still doable (especially at sub 3 rates). If you are confident in yearly raises on top of this, your flexibility grows more yearly. If you have a kid, well.....that’s another story
This post was edited on 2/22 at 8:07 pm


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11
Scooba
LSU Fan
Member since Jun 2013
19116 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
My first house, the bank preapproved me for damn near 7X’s my annual income.

I say go for it!


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30
ThatsAFactJack
Seton Hall Fan
East Coast
Member since Sep 2012
1388 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
No idea of what "normal" is but my mortgage is 1.3 of gross annual income and my monthly note is 8.1% of my gross monthly income. Single dad of 1. Definitly on the conservative side of not being house poor.
This post was edited on 2/22 at 9:26 pm


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40
Fox McCloud
Member since Oct 2020
1788 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
2.3x is nothing. Mine is 4x my household salary and we have never had any issues. The interest rates are so low right now you can afford a lot of house.


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10
hottub
Florida State Fan
Member since Dec 2012
1980 posts

re: What is the “normal” ratio of mortgage loan vs annual income?
I feel comfortable at 2x gross with single income and 6 kids.


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