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I agree with DemoDreamer. Banks don't always care what you can afford, they just want to make the most money out of you. I'm suprised that they are so reckless now with all the trouble that they are in. And I really don't recommend going off of what he will be making after graduation. Something could happen.
For example, my husband was interning with a company and we were 99.9% positive that they would hire him after graduation. But guess what, they didn't. Luckily, he was able to find a job but it required us moving across the country and I haven't been able to find a job since we moved. Go off the income that you are guaranteed to have, or wait until after he graduates and you are sure that he has the job and you two aren't going to have to move or something to find a job for him.
PS - I love all these girls who are getting a loan only based on one income! That's what my husband and I will try to do once we are both working.
Between both of our salaries our mortgage is currently 23% of our monthly income. FH is very reasponsible with finances and we have a lot of equity in the house, this was FH's third home purchase my first....FH's last home was sold at the peak of the market and our current house was bought a year before the fall. We are very lucky!!!!
My rent is 12.8% of my income, not including bonus, which is great especially since I live in NYC. That is not including tax or medical though, so factoring that all in it's more like 21% of my income (tax is extremely high if you live in NYC).
When we take out a mortgage it will be on a condo which will also have a maintenance fee. I just did the calculation and we are shooting for our total mortgage payment + maintenance to equal exactly 32% of our take-home salary so that's also factoring in tax, medical, 401K contributions as NOT part of our take-home. So 32% of our money after you subract all of those things.
I think it would pretty much be impossible to put 50% of my salary towards just my mortgage. I would say, my mortgage almost doubles after utilities, cable, general repairs, general household needs, etc.
Right now I am at 30% on my salary alone.
Exactly 30% of our gross; This includes mortgage, mortgage insurance, homeowner's insurance and property taxes. (our 3 bdrm..stay here forever house)
Our mortgage is about 15% of our combined income. This is with the mortgage, our escrow which has our property taxes and home owners insurance and we pay an extra $300/mth on our mortgage to save. We got a good rate 5% fixed 30 yr and we built within our means. Yea, we were approved for a higher amount, but we budgeted and spent wisely and actually came in $12,000 under what they were going to give us and still got our dream home. You do what you want to do, but I really do not agree with having a home that you are going to be paying half of your income on just the payment. Going from an apartment to a home is a huge jump not only in utilities but the upkeep and your taxes could raise year to year. I hope you don't feel judgement with any of the negativity to hear that % but that is why alot of people are in the bind they are in today. So many people have homes they just can not afford. DH and I and went into this with the mindset if something happened to one of us even with life insurance that the other could survive and keep the home and still have a life and a savings.
Our mortgage is about 21% of our combined income, but we purchased a condo so we also have HOA dues every month, which do cover our water bill. Those bring the percentage to 27%, which we're still comfortable with. Any higher and I'd be worried about our saving abilities!!
we got an absolutely incredible deal on our house. our house was $72,000 and after we refinanced - our house payment (including insurance, PMI AND taxes) per month is $599 and our percentage is 5%.
monthly - combined - we bring home (as of now, it'll be going up in 2 months) - but we make $3800 / month and it comes out to about 16% for our mortgage
Our mortgage is about 30% of our combined incomes. It's very comfortable with both of our incomes.
When you get pre-approved for a loan you will be pre-approved for a lot more than you can comfortably afford. Crunch the numbers yourself and I would try to have a mortgage that is 25-30% of whatever income you have to work with.
We're paying about 23% but that includes everything that'll make the house liveable like electricty, water, all taxes and fees (but not including internet and cable). When I start working part-time, it'll be at 19% but since I haven't been able to find permanent work, we're not counting my income.
It was important for us to buy a house we can afford yet be able to grow into and raise a family in. We also want to be able to afford a vacation every year without sacrificing too much.
Our goal is to take advantage of the current low rates and pay off as much as possible. Healthcare is free here, we don't buy much, and have no bills (except student loans), so we save a bit every month. Although I'm not sure how much we can pay off the first year since we have quite a few projects we want to tackle. But we're in it for the long-haul and although it'll be awhile before we're done with all renovations, none of it is necessary so we can take our time.
Right now, our rent is 17% of how much we take home each month. But I have a ton in school loans, cars and debt. Which is why we can't afford to buy a home right now.
I think you have to consider all of the other expenses too. I'm going to say about 80% of my monthly income goes to bills and rent. I think you have to consider that too.
Right now I'm not working, and 26% of FH's income (our only income) goes toward our rent (not including utilities). Our rent is pretty high, but we planned to rent the townhouse we are in now for a year and then decide whether or not to buy it (in which case what we paid in rent would be put toward the purchase), so we looked at it as a possible investment. We've decided not to buy it and will be moving into a smaller apartment next month. I will hopefully be getting a job soon also, and when both of those things happen our rent will be down to about 12% or less of our total monthly income. We just graduated from college last year and we're still too transient to buy a house quite yet!
My FI pays about 8% of his net income towards his mortgage. I pay around 34% (including parking & strata fees). However, my street has more residents than his entire city and I save a lot more in transportation costs, etc.
From what I've read-- US banks now DO care a lot whether you can afford it or not. Anyone remember the bank bailout in 2008?? A contributing factor was the fact that so many people had to default on their loans because they were given mortgages that they couldn't afford.
Definitely don't live beyond your means :)
My rent is currently 49% of my income and it's really really difficult. Honestly, if I wasn't getting married and moving in with FI this summer, I would have to move somewhere cheaper. That high a percentage is just not sustainable if you hope to save anything. Once we're living together rent will be more like 28% of our total income, and it will be such a relief...
I think our rent is right now close to 50%. It kind of sucks, especially since we live in an expensive city, but such is life.
we get a bunch of stuff taken out of our salary before take-home, and we are still under 20% I personally wouldn't do 50% before he gets a job offer. The only time I've been over 30%, I had roomies off and on to help.
We intentionally have a mortgage for now, though, that we could afford on one of our 2 salaries. You can always get something that needs more work then use his salary to fix it up as you have it...that's kind of what we do.
are you asking what we pay or what our mortgage actually is?
our mortgage is 10% but we pay more..like 16%. we save as much as possible. we are trying to save to buy a new car :D
Good luck! i wish you the best
Thank you everyone for your input... I've gone back & forth figuring out if I can afford this house. You've helped me to think about this from every angle... in the end, I've decided to go ahead with the house. All other houses that are less expensive need massive work & don't qualify for a FHA loan since they're not up to code. We decided that rent would actually be MORE than our mortgage payment would be (that's including taxes & insurance!) & we want to live here for a few years & we also LOVE the house! The first 2 months will be cutting it close, but doable. Once I get married, it will go down to about 30% of my income, which is what it should be for me to not stress about money. & FI does have a 100% guaranteed job with a specific company, if he didn't, I wouldn't proceed with the house.
I kinda wish there was a fixer upper that qualified for an FHA loan so that the payments would be super cheap & we could fix it up & make money off it... but sadly that just won't work.
Our mortgage is 26% of our NET income, not including bonuses (probably less than 20% if you included that). I would not get a house that is going to eat up that much of your income.
I have a condo, and my payment plus my HOA is about 36% of my take home. But that doesn't factor in my commission, which usually puts me in the 25% range.
Glad we were all able to help. Good luck and congratulations on your new home!
We pay 50/50 on the rent but the rent is 23% of our combined take-home monthly income. Individually, it is 19% for me and 29% for the hubs. It would be nice to have the same percentages for when we do buy a house but we know it will differ.
We pay 20% of our take home pay toward mortgage and property taxes
Our mortgage payment is 8% based on our combined monthly take home income, however we pay a higher payment of 14%.
Couldn't imagine 50%, no idea how that would be comfortable.
0% of mine goes toward rent since I don't pay it. But my SO who does pay it, pays only 6% of his monthly income towards it.
Never exceed 30%, or about 1/3 of your total income, NO MORE, should pay for all morgage, hoa, tax, etc on the house.
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