What's Your Mortgage Compared To Your Income?

[Astreja]

It's paid off now, but it was running about 25% or so of my take-home.

If your cash flow can stand it, go for 15-year amortization and bi-weekly or semi-monthly payments (depending on whether you get paid every two weeks or twice a month).

[popeyespappy]

Right? It’s fucking with me, but here the median house is in the 300s. We are well above the median income. Everyone who owns a house here is buried.

If you plan to be there for the long term, and feel good about your income security then buy as nice as you can now. Just make sure to account for maintenance cost, and try to get it paid off before you plan to retire. If you don't plan to be there that long go as cheap as you can, build equity, and save the difference for something nicer later.

Just my 2 cents...

[RoadRunner79]

Actually I guess I was talking about the loan not the mortgage. Mortgage is about 10% of gross with taxes and insurance.

[Jackalope]

16.4% of net including tax + insurance, less than 10% of gross.

My previous house was over 30%.including a second.

[Shell B]

Right? It’s fucking with me, but here the median house is in the 300s. We are well above the median income. Everyone who owns a house here is buried.

Have you considered finding a house with an integral rental unit? The rent can offset at least 25-30% of your monthly mortgage.

I am building a house in an rather pricy area of Northern California. I included an integral 800sq foot 1 bedroom apartment. My mortgage would be 52% of my take home pay. But if I add rental income to my take home pay then the mortgage comes down to 40% of net income.

We have! We’re semi-committed to a place now, but think we might back out if he needs work.

[Joods]

I'm a kept man, one who turns over the pay checks and hopes for the best.  Our monthly mortgage takes about a fifth to a sixth of what we gross.  We refinanced a fifteen year mortgage back when we needed to do some major roof work.  I'm not sure how many years are left on that, not many.

The original mortgage was for about 50,000 back around 76.  The property is probably worth twenty times as much now but i'm not sure if the building adds anything to that or brings the value down.  It isn't for everyone but it has room inside for Lia's studio and space outside for lots of gardening.

IIRC, didn't you convert an old warehouse into a house? How many square feet is it?

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Fun fact: if you take your monthly mtg payment and split it up bi-weekly, by the end of the year you will have paid an extra month's mortgage. If you tell the mtg company to apply your last two payments of the year to your principal, you can literally shave 7 years off your loan. In addition to that, you won't ever be behind on your payments because of how you structured them.

[Neo-Scholastic]

0% All paid off. Plus I live well below my means.

[The Grand Nudger]

Same.

Did you look at hud auctions Shell?  There are still a ton of places in foreclosure that you can snake up for the remainder of the note..sometimes 25% of their current market value...but you have to have cash in hand.

[Shell B]

Same.

Did you look at hud auctions Shell?  There are still a ton of places in foreclosure that you can snake up for the remainder of the note..sometimes 25% of their current market value...but you have to have cash in hand.

We don't have cash in hand for the amount of house we want. We're greedy.

[The Grand Nudger]

If you found a place with a market value of 1.2mil and it was in foreclosure @300k....it would be hilariously easy to get a bank to extend you the credit...and you;d still be paying the same loan. Its just hard to arrange because they go so quick, quicker than loan officers tend to work.

I did something similar here. I bought 3600ft2 and two acres for 25k outright, and then got a loan to cover the adjacent agricultural properties also in foreclosure.