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  1. 02-11-2010, 08:53 AM #1
    rcwso
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    Default 25% of take home for mortgage?

    Last night I was listening to Dave and he mentioned that if someone was to go out and get a mortgage to never spend more than 25% of your take home pay on that mortgage. Ok, I have seen that number around before or something similar.

    Is that mortgage payment only? Or does that include home owners insurance, home owners association fees, and taxes? Or ....?

    Just wondering what Dave would say or if there are any other thoughts.

    RCWSO
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  2. 02-11-2010, 08:56 AM #2
    Greebo
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    He doesn't say never - but he does strongly caution it. And the 25% would include mortgage, taxes, insurance and fees, yes.

    Up to 35% he won't freak out. Over that and you'll find it very hard to make ends meet depending on your income, of course.
    If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.

    Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"

    Greebo    (Nerd Spender): Loving and extremely patiently tolerated husband of ceashels.
     WARNING: Y Chromosome behind the keyboard. Adjust your listening filters appropriately!

    Three     Two mortgages, two one no car loans, one no credit cards, and a partridge in pear tree!
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  3. 02-11-2010, 09:32 AM #3
    rcwso
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    That is how I have been calculating a mortgage payment that my wife and I are looking at right now. We have tried to include everything and keep it at or below 25% of take home pay. We will find out in the near future how that will work out if we decide to buy.

    Thanks,
    RCWSO
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  4. 02-11-2010, 09:53 AM #4
    Greebo
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    He also says that 25% should be for a 15 year mortgage. I don't disagree with him, but we still opted for a 30 when we refi'd.
    If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.

    Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"

    Greebo    (Nerd Spender): Loving and extremely patiently tolerated husband of ceashels.
     WARNING: Y Chromosome behind the keyboard. Adjust your listening filters appropriately!

    Three     Two mortgages, two one no car loans, one no credit cards, and a partridge in pear tree!
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  5. 02-11-2010, 04:35 PM #5
    nodmicks
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    I didn't know Daves guidelines but my Dad told me to never have a mortgage with taxes and Ins that equaled more than 1 weeks take home pay.

    I was glad dear dad really pounded that into my head!!!!!!
    ~July 19 saving goal for event $104/$1000
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  6. 02-11-2010, 06:05 PM #6
    Iwant2BDebtfree
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    We are still making out pretty well at 36% (or 1.5 weeks pay) but I can see how it would make it SO much more comfortable to have it at 25% or 1 weeks pay. Sadly there was NOTHING in this area that we'd get with that payment. Maybe a condo....or a huge fixer-upper which we didn't have the extra funds to put into it at the time and we NEEDED to move.

    I wish I had that mortgage though...I envy those who can get it that low. Maybe someday................. lol
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