What % of your income goes towards your mortgage?

[Anonymous]

Mine is 13 percent of gross

[Anonymous]

Anonymous wrote:

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?

DP. This, plus I don't have an easy way to calculate our take home pay. I get a bonus every year which is usually about 15-20% of my total pay but is discretionary, and DH is a partner and gets quarterly disbursements and a year end share of profits payout plus we have to make quarterly tax payments out of pocket. So our cash flows are spiky. If I estimate that we take home 60% of our gross pay, our mortgage + insurance + property tax is about 9% of that. We live in CCDC and bought in 2018.

[Anonymous]

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.

I'm sure that's the case for most people, but it isn't that simple for me. SO I'll continue to use gross. You do whatever makes you feel good.

[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.

I'm sure that's the case for most people, but it isn't that simple for me. SO I'll continue to use gross. You do whatever makes you feel good.

Yeah I just started a new job and have yet to get a paycheck so I used gross as I KNOW what that is

[Anonymous]

Anonymous wrote:

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?

Right, also, to the extent that there's guidance or rules about this, it's based on gross income, not net. Banks don't really care if you can't save into your 401(k), as long as you can pay your mortgage.

[Anonymous]

Anonymous wrote:25% of our gross income goes to mortgage & property tax. No regrets. We see it as an investment & enjoyment of our home.

This may stir some emotions, but an investment is an asset that produces you a steady income. If its costing you money on a monthly basis, like an owner-occupied home, its a liability.

[Anonymous]

Anonymous wrote:

Anonymous wrote:25% of our gross income goes to mortgage & property tax. No regrets. We see it as an investment & enjoyment of our home.

This may stir some emotions, but an investment is an asset that produces you a steady income. If its costing you money on a monthly basis, like an owner-occupied home, its a liability.

Really? The mutual funds I hold in my 401k aren't investments? OK.

[Anonymous]

Anonymous wrote:

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.

Yes, I was able to net 320k on the proceeds of my last house, I’m 46 so not looking at starter homes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:25% of our gross income goes to mortgage & property tax. No regrets. We see it as an investment & enjoyment of our home.

This may stir some emotions, but an investment is an asset that produces you a steady income. If its costing you money on a monthly basis, like an owner-occupied home, its a liability.

Really? The mutual funds I hold in my 401k aren't investments? OK.

If the mutual funds provide dividends, then yes, if not its asset price speculation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:25% of our gross income goes to mortgage & property tax. No regrets. We see it as an investment & enjoyment of our home.

This may stir some emotions, but an investment is an asset that produces you a steady income. If its costing you money on a monthly basis, like an owner-occupied home, its a liability.

Really? The mutual funds I hold in my 401k aren't investments? OK.

If the mutual funds provide dividends, then yes, if not its asset price speculation.

You should publish a book with these new definitions! Call it, "Alternative meanings of words" by Idiot DCUM User.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:25% of our gross income goes to mortgage & property tax. No regrets. We see it as an investment & enjoyment of our home.

This may stir some emotions, but an investment is an asset that produces you a steady income. If its costing you money on a monthly basis, like an owner-occupied home, its a liability.

Really? The mutual funds I hold in my 401k aren't investments? OK.

If the mutual funds provide dividends, then yes, if not its asset price speculation.

You should publish a book with these new definitions! Call it, "Alternative meanings of words" by Idiot DCUM User.

Now, now, lets be civilized No need to, already one written in 1997 and is a bestseller: https://www.amazon.com/Rich-Dad-Poor-Teach-Middle/dp/1612680194

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:25% of our gross income goes to mortgage & property tax. No regrets. We see it as an investment & enjoyment of our home.

This may stir some emotions, but an investment is an asset that produces you a steady income. If its costing you money on a monthly basis, like an owner-occupied home, its a liability.

Really? The mutual funds I hold in my 401k aren't investments? OK.

If the mutual funds provide dividends, then yes, if not its asset price speculation.

Whoever taught you that investments only count if they pay out on a regular basis was flat out wrong. Plenty of investments only pay out when they are sold, or they have positive value only in certain circumstances. Literally any asset for which you can do an NPV calculation in expected value terms is arguably an investment. You also clearly don't know what a liability is.

- an economist

[Anonymous]

7% of gross of HHI
24% of my gross income.
Our income has risen dramatically since we bought our home. I have always felt strongly that I want to be able to afford the house on one income - the lower (mine) - and we are able to do that. My marriage almost crumbled a few years ago and to know that I could afford my home independent of my dh’s salary was one small relief.

[Anonymous]

About 1/2 a percent.

[Anonymous]

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

There was a time not so long ago that you were not granted a mortgage more than 4x your gross yearly income.