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Started By
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What is the “normal” ratio of mortgage loan vs annual income?
Posted on 2/22/21 at 5:57 pm
Posted on 2/22/21 at 5:57 pm
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.
Additional info...
Single income
3 kiddos
Other than mortgage, bills/other debts are typically 23% of income
Appreciate any advice, TIA.
21
Posted on 2/22/21 at 6:06 pm to Cblack23
2.3 times you gross or net ?
Following also
Following also
Posted on 2/22/21 at 6:13 pm to Cblack23
quote:There's really no normal, as same income has a wide range of expenses.
What is the “normal” ratio of mortgage loan vs annual income?
Posted on 2/22/21 at 6:16 pm to Cblack23
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 2/22/21 at 6:17 pm
Posted on 2/22/21 at 6:18 pm to castorinho
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.
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.
Posted on 2/22/21 at 6:20 pm to Cblack23
2.5 times gross used to be the old adage but obviously that depends on many other factors.
Posted on 2/22/21 at 6:21 pm to Cblack23
My new mortgage is about 2.5x my annual salary.
Posted on 2/22/21 at 6:31 pm to ReadyPlayer1
Gross
Posted on 2/22/21 at 6:35 pm to Cblack23
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.
Posted on 2/22/21 at 6:42 pm to Cblack23
For mortgage approval it’s 45% total debt to income ratio
Posted on 2/22/21 at 7:06 pm to Cblack23
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
Posted on 2/22/21 at 7:33 pm to Cblack23
quote:you’ll never make enough money
Single income
3 kiddos
Posted on 2/22/21 at 7:42 pm to fallguy_1978
So if you make $100,000 a year your house should be only $250,000? Seems awfully low.
This post was edited on 2/22/21 at 7:43 pm
Posted on 2/22/21 at 8:00 pm to Paul Allen
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 2/22/21 at 8:01 pm
Posted on 2/22/21 at 8:01 pm to Upperdecker
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
Just wanted to survey some smart people’s opinions.
Thanks for all the replies
Posted on 2/22/21 at 8:04 pm to Paul Allen
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 2/22/21 at 8:07 pm
Posted on 2/22/21 at 9:17 pm to Cblack23
My first house, the bank preapproved me for damn near 7X’s my annual income.
I say go for it!
I say go for it!
Posted on 2/22/21 at 9:23 pm to ReadyPlayer1
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 2/22/21 at 9:26 pm
Posted on 2/22/21 at 9:48 pm to Cblack23
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.
Posted on 2/22/21 at 9:52 pm to Cblack23
I feel comfortable at 2x gross with single income and 6 kids.
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