Curious to know what everyone’s mortgage payment is relative to their income. My wife and I make about $12k a month combined, but every home we’re looking at around here has payments over $5k per month with a 10% down payment. How tough is that level of payment for you?
Our mortgage payment is $1673, but with HOA, escrow, and utilities, it’s closer to $2500. We have a $250k household income.
Blake said:
Our mortgage payment is $1673, but with HOA, escrow, and utilities, it’s closer to $2500. We have a $250k household income.
Not bad! We’re at $2300 for our mortgage with a $170k household income.
@Leith
I couldn’t handle a super high mortgage. I wouldn’t have any freedom.
Blake said:
@Leith
I couldn’t handle a super high mortgage. I wouldn’t have any freedom.
$7300 mortgage here on a $250k income, but we still manage to go out.
Blake said:
@Leith
I couldn’t handle a super high mortgage. I wouldn’t have any freedom.
Ours is around 25% of our take-home. We still save, and have a kid. We plan vacations and eat out occasionally, but we’re not restricted.
@Leith
Yeah, sounds manageable. I was referring to people who feel stretched to make their payments.
All the gurus say ‘rent shouldn’t be over 30% of income,’ but that’s outdated advice. I bought a smaller house for $230k with 10% down. My mortgage is just under $1400, plus $800 in co-op fees, so all-in it’s about $2200. My take-home is around $5k per month. It’s a bit tight, especially since I bought at a 6.8% rate last year. I’m hoping to refi if rates come down post-election.
@Max
We weren’t exactly ‘ready’ to buy, but with rent over $1700, we just decided to start looking. Locked at 5.56% but hoping rates dip a bit more before closing in January.
Juno said:
@Max
We weren’t exactly ‘ready’ to buy, but with rent over $1700, we just decided to start looking. Locked at 5.56% but hoping rates dip a bit more before closing in January.
Did you lock in that rate already?
Start small and keep your payment low so you can keep saving. Just because you’re approved for a $5k mortgage doesn’t mean it’s a good idea. Our first home was $125k, then $180k, then $260k. We kept the first two homes as rentals, and after selling the third one for $715k, we paid cash for our current home. Rental income on the others covers their payments now.
I like to keep my payments low so I have cash flow. I make $190k a year (net $10,500/month) and my mortgage is $1697 (3% down, 3.125% rate). My DTI is around 11%. Living below my means lets me travel, and I’m not stressed about bills.
@Jordy
Love that approach! I’m at a 21% DTI currently and working to lower it.
Laine said:
@Jordy
Love that approach! I’m at a 21% DTI currently and working to lower it.
21% is great! I have family abroad, so keeping my expenses low lets me visit them often. I don’t want my money tied up in bills either.
@Jordy
Same! I’m at $140k with no kids, and I just hit an 810 credit score. I’d rather have a small, cozy home and freedom to travel than a big house with high payments.
Laine said:
@Jordy
Same! I’m at $140k with no kids, and I just hit an 810 credit score. I’d rather have a small, cozy home and freedom to travel than a big house with high payments.
That’s awesome! I was in a similar spot, making $150k. Paid off my car quickly, and now I have room for travel. You’re on a great path.
Our monthly take-home is $6900, and the mortgage is $1600 with taxes and insurance included.
What’s your current rent? If it’s $3k, are you saving the $2k difference? If not, $5k may be a big jump. Try saving the mortgage amount before committing.
Olin said:
What’s your current rent? If it’s $3k, are you saving the $2k difference? If not, $5k may be a big jump. Try saving the mortgage amount before committing.
My first home’s mortgage was $1200 on a $30k income. It was tight, but after a few years, my income tripled, making the payment easier.
We capped our payment at 25% of income. Our mortgage was $1600 in 2014. Now it’s 10% of income, which lets us afford private school for our kids. Great decision for us.