Housing should be what percentage of income? - Mothering Forums

Forum Jump: 
 
Thread Tools
#1 of 5 Old 04-04-2011, 03:05 PM - Thread Starter
 
taubel's Avatar
 
Join Date: Jun 2007
Posts: 328
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

I'm sure this has been said before, but I couldn't find a basic answer.

 

Is housing "supposed" to be 1/4 or 1/5 of your income? If you own a home, is this figure supposed to include taxes, utilities, water, garbage collection, etc? 

 

And do you estimate from your take-home pay or from your total income before taxes, health insurance, 401(k) contributions, etc.? 

 

Thanks!

taubel is offline  
#2 of 5 Old 04-04-2011, 05:02 PM
 
Sharlla's Avatar
 
Join Date: Jul 2005
Location: Springfield Mo
Posts: 12,042
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

Good question.  When i figure our percentage I just look at the total mortgage (including taxes, insurance and interest) and my total gross income.  Ours is roughly 10% but i think i always read you didn't want to pay more than 25% and I assumed it was like I figure mine.


Unassisted birthing, atheist, poly, bi WOHM to 4 wonderful, smart homeschooling kids Wes (14) Seth (7) Pandora Moonlilly (2) and Nevermore Stargazer (11/2012)  Married to awesome SAH DH.

Sharlla is offline  
#3 of 5 Old 04-04-2011, 06:20 PM
 
JamieCatheryn's Avatar
 
Join Date: Dec 2005
Location: SW Pa
Posts: 5,103
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 12 Post(s)

They usually say something like 28% for housing (mortgage/rent, insurance, property taxes) and debt payment obligations capped at 36%, but the less the better of course.

JamieCatheryn is offline  
#4 of 5 Old 04-05-2011, 06:52 AM
 
Turquesa's Avatar
 
Join Date: May 2007
Posts: 4,069
Mentioned: 1 Post(s)
Tagged: 0 Thread(s)
Quoted: 33 Post(s)

Dave Ramsey and his followers will say no more than 25%.  But IMHO, going lower is wise because you have wiggle room to pay extra on the principal.  thumb.gif 


In God we trust; all others must show data. selectivevax.gifsurf.gifteapot2.GIFintactivist.gif
Turquesa is offline  
#5 of 5 Old 04-05-2011, 08:20 AM
 
TiredX2's Avatar
 
Join Date: Jan 2002
Location: it appears to be a handbasket
Posts: 20,475
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)

Just keep in mind that any of these things are rules of thumb.  It can vary a lot based on:

1) location

2) other debts

3) predicted income changes

4) total income

 

What works for one person may not work for another.  To determine how much we could afford to spend on our housing costs, we added together what we were currently paying in rent and the amount we were currently saving towards our down payment.  It worked fine for us, but more than doubled most recommended percentage levels.


 

 

TiredX2 is offline  
Reply

Quick Reply
Message:
Drag and Drop File Upload
Drag files here to attach!
Upload Progress: 0
Options

Register Now

In order to be able to post messages on the Mothering Forums forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.
User Name:
If you do not want to register, fill this field only and the name will be used as user name for your post.
Password
Please enter a password for your user account. Note that passwords are case-sensitive.
Password:
Confirm Password:
Email Address
Please enter a valid email address for yourself.
Email Address:

Log-in

Human Verification

In order to verify that you are a human and not a spam bot, please enter the answer into the following box below based on the instructions contained in the graphic.



User Tag List

Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page


Forum Jump: 

Posting Rules  
You may post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are Off