What is an average percentage of income that should be going to a mortgage and taxes?
Ronkonkomonga
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What is an average percentage of income that should be going to a mortgage and taxes?
We are meeting with home owners (they want to meet us before they sell) And I have the whole weekend to come up with reasons not to buy this house. We bid 15K above what we were looking to spend.
I was wondering what the average percentage of income should go into your mortgage and taxes. I though around 26-30%. Should you be able to pay your housing costs on one of your salarys, or on LI do you need both people working?
ThongLori
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Re: What is an average percentage of income that should be going to a mortgage and taxes?
There is no 'should.' You have to spend what you can afford and feel comfortable spending. You have to outline ALL your monthly expenses and get your own number from there. Good luck
cjb88
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Re: What is an average percentage of income that should be going to a mortgage and taxes?
i found this online:
Principal, interest, taxes, and insurance should not exceed 25 to 29 percent of gross income.
but then it also said with the way prices are today, it is hard to stay true to this formula...
NPbride
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Re: What is an average percentage of income that should be going to a mortgage and taxes?
I heard as high as 36/38% of gross if you have no debt. It really depends on your comfort level.
littlewilson
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Re: What is an average percentage of income that should be going to a mortgage and taxes?
Posted by ThongLori
There is no 'should.' You have to spend what you can afford and feel comfortable spending.
Absolutely true. You need to figure out what's right for you based on your anticipated income, expenses, and savings. I can say that for us, we are WAY over the percentages of income that folks have listed as guidelines above...but that's just what works for us.
TracyInQueens
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Re: What is an average percentage of income that should be going to a mortgage and taxes?
I read somewhere that 25% of income should go to housing but that same article pointed out that this rule would have to be bent in metropolitan areas with high housing costs. I think LI fits that category!
Hazeleyes33
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Re: What is an average percentage of income that should be going to a mortgage and taxes?
I just figured ours out and it is 21% of our monthly gross income. That is now though as we bought our house in 1996 and we are making almost double what we were then.
julz33
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Re: What is an average percentage of income that should be going to a mortgage and taxes?
For us, the mortgage, taxes, and major utility bills all all covered by my monthly salary after taxes. And my salary is the smaller of the 2. Rays salary is all for savings. That is the only way I would feel comfortable... I worry so much and always thought about what would happen if one of us lost our job or got hurt or something.
ETA: Just calculated it... our mortgage plus taxes is 20% of our base salaries (not including commission/bonuses)
KimberlyBride
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Re: What is an average percentage of income that should be going to a mortgage and taxes?
Ours is also 25% of total income. You need to do with what you feel most comfortable with.
ETA: Yes you should be able to pay with one salary. What happens if one person loses their job? If you don't want it and you already bid you can back out with no penalty if you have not signed a contract.
D&C
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Re: What is an average percentage of income that should be going to a mortgage and taxes?
Posted by julz33
For us, the mortgage, taxes, and major utility bills all all covered by my monthly salary after taxes. And my salary is the smaller of the 2. Rays salary is all for savings. That is the only way I would feel comfortable... I worry so much and always thought about what would happen if one of us lost our job or got hurt or something.
That is EXACTLY what we do too !
Preshy7
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Re: What is an average percentage of income that should be going to a mortgage and taxes?
Posted by cjb88
i found this online:
Principal, interest, taxes, and insurance should not exceed 25 to 29 percent of gross income.
but then it also said with the way prices are today, it is hard to stay true to this formula...
i just calculated this- my gross salary (not bonus or anything), combined with my fh's - we will be paying 28% of that towards taxes, principal, insurance and interest.
