What % of your monthly gross income is your mortgage payment?

[disneysteve]

Oh man, I just found out I've had this all wrong. I just went to CNN money, and used their "How much can I afford" calculator.

We've talked about that before. That calculator is beyond insane. It would have me "affording" a $700,000 house as opposed to the $250,000 house we actually own. Apparently they are using approximately 5 times income as the guideline when the real guideline is 2-3 times income.

[GoodSteward]

It's sad when someone as big as CNN Money gives such bogus advice. I wonder how many bankers follow this, watching so many people borrow until death do they part.

[parafly]

Currently, my household is at 16.9%. Before my wife and I had our first child and went down to one income earlier this year, we were at 8.8%.

These calculations include PITI.

[scfr]

0% - Mortgage free homeowner

[AJ444]

No Mortgage

Property tax,association dues, insurance: 2%

[LivingAlmostLarge]

0% because we rent. No but seriously we started at something ridiculous like 50% of take home on our first place. Refinanced it down to 40% and it was fine. We were young, broke, living HCOLA making grad student money. And rent was more than we bought for. We made in 2001 combined $42k and our rent was $1000/month for a studio. Our mortgage when we bough was $650 but HOA $150, insurance, etc. We just were used to spending a lot on rent/mortgage. Problem with HCOLA.

Then we spent i think around 35% and it was tight but we were also saving 30% of income and eeking it out. Then as income went up I think it was 25% by the time we had kiddo #1. It was pretty comfortable. Savings went up and spending but not proportionately. Then it was 20% and we were super comfortable and saving probably 35-40% of income, and it was something like 12% of total income (salary and bonus).

What happened to us at least is that everything was based of salary. We never touched our bonuses and saved every penny. So our salaries went up to help us get more comfortable monthly and our savings also went up with bigger bonuses.

We'll probably do the same thing now 25% of salary and then let it drop as we make more income. That's salary not counting bonus which if it follows the trend DH used to make 40% on bonus and I looked back at last 2-3 years and it was 40% bonus. So we're comfortable doing more because we save on salary and the bonus. I might add in the earlier years the salary was smaller and bonus smaller.

[Nutria]

3.33% (We have an absurdly low mortgage.)

[Joan.of.the.Arch]

Yes, much more useful question about housing expense and income. When we bought way back in 1993 at 7.68% interest on a 30 year mortgage we were paying--

9% of gross (includes PITI)

That was less than rent. I am so glad we bought when, where, and how we did. At the time 7.68% was a great interest rate. The small payment gave us a lot of leeway for spending and saving elsewhere. Utilities were about the same as renting, too, so things worked out nicely.

House is paid off now.

[Singuy]

2.5%

This figure is not a mortgage, but the property tax plus house insurance I pay per year. Other than that, mortgage free.

[dawnwes]

I feel like the odd man out, but ours is 18%. That includes all escrow fees (taxes, insurance, etc....)

[disneysteve]

I feel like the odd man out, but ours is 18%.

Even at 18%, though, you are still far below the "recommended" 28% limit.

[corn18]

6%. Was 17% when I bight the house 8 years ago. Haven't refinanced but income has gone up. CNN is nuts.

[Nutria]

CNN is nuts.

The news network, or some other TLA?

[disneysteve]

The news network, or some other TLA?

Not sure what TLA means but he was referring to the CNN online calculator mentioned earlier.

[corn18]

The news network, or some other TLA?

That link that was posted earlier that says I can afford a house 6x my annual income. No I can't.