What % of your income goes towards your mortgage?

[Anonymous]

So if I bring home 6k a month my mortgage shouldn’t be more than $1500?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know GROSS is what everyone looks at, but I think looking at NET is what you should be looking at if budgeting on a month to month basis. We NET $15K a month, mortgage + taxes and insurance is right at $5K. Our GROSS is probably closer to $30K but we max 401K plus catch up contributions, and we withhold "0".

Net though is highly dependent on personal choices as you kind of implied. My net changes a lot based on things like health, education and retirement accounts, tax issues, etc.

Gross in my opinion is far more easily comparable across households. For me PITI is 21% of gross.

In addition to this, about 30% of my compensation is either deferred or paid an irregular intervals, and so it doesn't factor into monthly cashflow, and we don't take it into account when figuring how much we can incur in monthly expenses. I know what our gross is, but it's a huge hassle to figure out net monthly income.

Yes but I think the majority of people have a pretty predictable monthly NET. I know what ours is from Jan-April, that's usually when DH maxes out the social security portion of his pay and his paycheck increases about by about $1000-$1200 a month for the rest of the year. He gets an annual bonus paid in March, but I don't include that in our budget. We just put as much of that away as possible.

On the other hand, if your DH maxes out his Social Security taxes in April, he's probably making about $500,000, which means you can afford even a very expensive mortgage.

NP, but whats "on the other hand" about? The PP didn't seem to be arguing anything about a specific percentage, just the right comparator?

[Anonymous]

Anonymous wrote:PITI 16% of gross income

Us too.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know GROSS is what everyone looks at, but I think looking at NET is what you should be looking at if budgeting on a month to month basis. We NET $15K a month, mortgage + taxes and insurance is right at $5K. Our GROSS is probably closer to $30K but we max 401K plus catch up contributions, and we withhold "0".

Net though is highly dependent on personal choices as you kind of implied. My net changes a lot based on things like health, education and retirement accounts, tax issues, etc.

Gross in my opinion is far more easily comparable across households. For me PITI is 21% of gross.

In addition to this, about 30% of my compensation is either deferred or paid an irregular intervals, and so it doesn't factor into monthly cashflow, and we don't take it into account when figuring how much we can incur in monthly expenses. I know what our gross is, but it's a huge hassle to figure out net monthly income.

Yes but I think the majority of people have a pretty predictable monthly NET. I know what ours is from Jan-April, that's usually when DH maxes out the social security portion of his pay and his paycheck increases about by about $1000-$1200 a month for the rest of the year. He gets an annual bonus paid in March, but I don't include that in our budget. We just put as much of that away as possible.

On the other hand, if your DH maxes out his Social Security taxes in April, he's probably making about $500,000, which means you can afford even a very expensive mortgage.

I wasn't arguing what we could or could not afford in a mortgage. Don't turn this into THAT conversation, as there are plenty of those already. Also your math is incorrect. His salary is gross $311K not $500K, he pays into social security THROUGH April. Right around May is when his paycheck increases due to maxing that portion out.

[Anonymous]

We pay about 20% PITI on gross income. We have a 15-year mortgage so it’s higher than it could be.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know GROSS is what everyone looks at, but I think looking at NET is what you should be looking at if budgeting on a month to month basis. We NET $15K a month, mortgage + taxes and insurance is right at $5K. Our GROSS is probably closer to $30K but we max 401K plus catch up contributions, and we withhold "0".

Net though is highly dependent on personal choices as you kind of implied. My net changes a lot based on things like health, education and retirement accounts, tax issues, etc.

Gross in my opinion is far more easily comparable across households. For me PITI is 21% of gross.

In addition to this, about 30% of my compensation is either deferred or paid an irregular intervals, and so it doesn't factor into monthly cashflow, and we don't take it into account when figuring how much we can incur in monthly expenses. I know what our gross is, but it's a huge hassle to figure out net monthly income.

Yes but I think the majority of people have a pretty predictable monthly NET. I know what ours is from Jan-April, that's usually when DH maxes out the social security portion of his pay and his paycheck increases about by about $1000-$1200 a month for the rest of the year. He gets an annual bonus paid in March, but I don't include that in our budget. We just put as much of that away as possible.

On the other hand, if your DH maxes out his Social Security taxes in April, he's probably making about $500,000, which means you can afford even a very expensive mortgage.

I wasn't arguing what we could or could not afford in a mortgage. Don't turn this into THAT conversation, as there are plenty of those already. Also your math is incorrect. His salary is gross $311K not $500K, he pays into social security THROUGH April. Right around May is when his paycheck increases due to maxing that portion out.

Sorry, I misunderstood your point -- you're right, you were not arguing that.

(I also apparently did the math incorrectly; I don't max out Social Security earnings until my December paycheck and spouse never hits the max, so I was a little fuzzy on exactly what I was multiplying and by what.)

[Anonymous]

0. Paid off my 15 year loan 5 years ago.

[Anonymous]

These numbers are annoying.

I’ll answer truthfully. 31%

I got this number from glancing at my bank statement. I took the full amount of my PITI that’s automatically paid to my mortgage company and divided it by the amount that’s direct deposited into my account. Things like health insurance and retirement contributions are automatically deducted from that amount. I could easily have tried to make this ratio look better by using gross salary or excluding insurance from the mortgage payment but that’s an exercise in stupidity. The amount direct deposited in my account is realistically what I have access to each month.

[Anonymous]

Currently about 44% of take home pay. Insane, but better than when we were renting in the city (52%), and is a somewhat temporary situation we find ourselves in (we are in year three of it!).

[Anonymous]

House poor here! We just upgraded from a condo to a house and we are currently paying 35%. This is sort of on purpose as we looked at the rates for a 20 year v a 30 year when we bought, crunched the numbers and decided to do the 20 year. We have a lot of savings, just in case, so hopefully we don’t end up regretting our choice

[Anonymous]

PITI 13% of net (7% of gross).

Live in DC in our first house that we bought 15 years ago. Our income has more than doubled since we bought it, but haven’t felt the need to move. Working on the “one house, one spouse” route to financial security . Will hopefully have the house paid off in a couple more years.

[Anonymous]

Anonymous wrote:Wow, did all of you buy 20 years ago? We have a reasonably priced house, make $250k, and are at 18% of gross which fits in our budget very comfortably.

Similar stats here. $275k HHI and 17% gross salary toward mortgage. No student loans, 1 nearly paid off car, and only 1 kid left with childcare expenses. It feels fine.

[Anonymous]

Anonymous wrote:These numbers are annoying.

I’ll answer truthfully. 31%

I got this number from glancing at my bank statement. I took the full amount of my PITI that’s automatically paid to my mortgage company and divided it by the amount that’s direct deposited into my account. Things like health insurance and retirement contributions are automatically deducted from that amount. I could easily have tried to make this ratio look better by using gross salary or excluding insurance from the mortgage payment but that’s an exercise in stupidity. The amount direct deposited in my account is realistically what I have access to each month.

I'm not sure people are using gross to make their ratio look "better." It's just the easiest way to create an even-ish benchmark. Maybe health care, taxes and SSN should be deducted from gross income, but why retirement contributions? That's really a choice. And then why stop there...why not daycare, car payment, etc?

[Anonymous]

14% of gross (PITI). HHI 275k

[Anonymous]

Our monthly net income is $20,000 and our PITI is $3900 so 19% of our net income is used on mortgage. I think that is relatively low compared to what I am seeing on this thread. Not sure what that percentage would be of our gross. I guess probably close to 10%?