LA Business Daily
What percentage does your monthly gross income goes toward the mortgage?
I'm looking at buying a new home in a few weeks and wanted to know what people are spending on there mortgages. Our gross is $10k. We're looking to spend $2500 on mortgage(including,tax,principal,insurance) which will be 25% of our monthly income. For those that spend more than 25% do you ever feel tied down? We still want to be able to travel and play and not feel tied down. We are almost debt free and dont have any kids. Both have stable jobs. Any advice would help
Public Comments
- That is around where you want to be. The absolute max is 35%. Banks normally use this as a checkpoint to approve or deny a loan.
- Lenders typically don't want you to spend more than 29-30% of your gross monthly income on your mortgage. I would go more conservatively and shoot for 22-25% of your gross income. Learning from some of my friends, you don't want to live for your house, and situations change and change quickly especially given the looming recession and given that residential property values are estimated to fall another 10-20% in most areas. In my opinion you would better off spending less and paying down on the mortgage more quickly to build equity.
- out of our combined income I would say about 35-40%. If you can live on one wage and use the other for everything else, it's tough for a while but then every payrise you have it gets better.
- 34% including principle, interest, property taxes, and property insurance. Rule of thumb is around 33% limit.
