Reply to Income $176k — how much would you spend on mortgage now?

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Reply to "Income $176k — how much would you spend on mortgage now?"

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[quote=Anonymous]The 28%/33% mortgage to gross income ratio is standard for a reason. If you don't have any other debt, that's a perfectly reasonable amount to pay for housing. Since your home is also a real asset, your PITI isn't just an expenditure, it's also forced savings and investing. Last year, I bought a house on $200k annual earnings with a PITI of $4600.  It was $1100/month more than the rent I was paying but it didn't stress my finances and the difference came from shifting my non-retirement savings into the house. I skipped a vacation to do move-in repairs but otherwise spent as freely as I wanted.  With each passing year, my mortgage gets more affordable as I pay back the mortgage with inflated dollars and I build up equity and appreciation in the house. Since I bought, the house has already appreciated $100k, a lot more than I could have gained from saving and investing the difference between my rent and new PITI. It's just not the same as spending on a consumable item or a depreciating asset like a car. [/quote]

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