Reply to What % of your income goes towards your mortgage?

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Reply to "What % of your income goes towards your mortgage?"

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[quote=Anonymous][quote=Anonymous][quote=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. [/quote]

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?[/quote]

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. [/quote]

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