I was just wondering what percentage of your take home pay goes towards your mortgage and taxes? DH and I are trying to figure out what kind of prices we can afford for a house (currently own a condo), but all the calculators base this off of gross pay....in reality, we only have take home pay to work with. Any thoughts?
palebride
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Re: take home pay vs. mortgage
if i figured it out correclty - 25% exactly
cluelessbride
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Re: take home pay vs. mortgage
For us, we're estimating that my entire paycheck will go toward the house and taxes, and I'm about 40% of what we bring home in total.
karen32
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Re: take home pay vs. mortgage
when you say 'take home pay' are you referring to what actually goes into your account each paycheck?? that number can fluctuate a LOT, based on what your withholding for taxes is - that is why most calculators are based on 'gross pay'. take home pay is a number that can easily be manipulated, so it is not really accurate.
do you normally get a tax refund each year, or do you owe? if you are normally getting a refund, you can definitely have less withheld, and therefore, take home more. once you buy a house, the first thing you should do is adjust your withholding from your paycheck. mortgage interest and real estate taxes alone can reduce your taxes by $10,000 - $15,000. you can have less withheld, so you can take home more.
hope that makes sense!!
luvsun27
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Re: take home pay vs. mortgage
Hi Karen...yes that makes sense. This year, was the first year I got a refund...simply because of the condo I bought last year. However...going forward, I don't want to strap ourselves too much when we buy another house...so I wanted to see what the average was. Thanks much!
