Amount of Mortgage Payment?

[JaneDoe]

What percentage of your gross income is consumed by your mortgage payment? This question stems from the Worst Year thread and that we just bought a new home. We are about to embark on our first year post training and after reading the Worst Year thread, I'm worried that we bought too much home. Our mortgage payment on our new home will eat about 27% of our gross income.

What are your opinions on how much is too much?

I honestly think it depends greatly on how much other debt / expenses you have. Our house payment is about 20% of our NET monthly income (for the KC house), and our Cleveland payment (which we carried for a YEAR) was another 10%. We have mondo consumer debt to pay off, which is where we need to focus.

[Cumberland]

Ours is too much IMO- 35% of our combined Net income. What that translates to is-I have no choice about working while he is in residency.

[SuzySunshine]

Ours is 22% of our income. I'm currently working but do not plan to in a few years so then it will go up to about 40% but we're dumping a lot into savings right now to compensate and our cars will be paid off then.

[mommax3]

Ours is 15% of DH's gross monthly income. We really do try to stay on the conservative side on buying homes, at least so far we have. BUT.....we have med school debt of 45K (probably less than most b/c of the military) and consumer debt (which includes one car payment) to the tune of 50K, as well as kids in private school. We made a strong committment early on never to need two incomes, so I guess that has been our motivation on the house thing.

I have to add, though, that we live in a place that has very affordable housing, and I don't really feel like I am suffering or being noble by living in the house that I have. It is a custom home with over 3100 sq. ft., and I know it would be COMPLETELY out of reach for us financially in many parts of the country.

I think every couple/family has their own comfort zone regarding stuff like this.......I really don't think there is a cookie cutter approach to be found here, unfortunately!

Sally

[DCJenn]

Amen to Sally's comments because it depends a LOT on where you live. Mortgage lenders in DC are a lot more comfortable with people buying more than they would be able to in other parts of the country. So, on that note, we're spending about 35% of my husband's net. However, remember that when we bought, it was about 20% of our net. He's had raises and I stopped working.

In any event, we're not sad about leaving a very expensive part of the country for a while.

Jenn

Our payment (including insurance and property tax) is 19% of gross income for the PG year starting in July, about 21% right now. It is almost 30% of NET monthly income (based on bi-weekly pay).

It does depend quite a bit on the cost of living for your area. I wonder if we could rent for what our payment is, certainly wouldn't be much less. It also makes me realize that my part-time income contributed a lot more than I gave myself credit for.

[Phoebe]

Our house payment is roughly 20% of NET monthly income.

[SuzySunshine]

I should add that ours is NET too and includes taxes and insurance.

[Vanquisher]

Ours is 25% of gross. Too much considering all the debt we have. Oh well.

To think they approved us for 50K more than we spent.

?

We're looking at roughly 38% of gross pay. That's not an extravagant house, but only counts me working. If Mich starts working part-time, that number drops to ~21% of gross pay. That's a big "if" at this time though. Lucky for us that outside of our student loans we have no consumer debt.

[migirl]

Our homeowning costs (mortgage, taxes, insurance) are about 25% of DH's gross monthly income. BUT, we don't have any other debt (student loans, car payments, credit card, etc). We also bought our home on the conservative side (for our area).

[JaneDoe]

The area where we are moving is definitely not one of the most expensive places for housing, but it is much more exspensive than where we currently live. We don't have any consumer debt, but we will need to buy new cars in the next two years. We're hoping that are cars will last us at least another year. I'm no longer working, so our budget is based solely on Dh's income.

Our student loan payments combined with our mortgage payment will consume 36% of our gross. Ouch! Perhaps we set our housing expectations too high. Dh will be able to become partner in a year. Hopefully, that will help out.

[SueC]

We live in the same house we have all the way through residency and fellowship. Throughout training, our mortgage ate up probably 40% of our income. That necessitated me working from home all the way through. Now that he's done, it only eats up about 10% of dh's net income. But, we have so much other debt that this is really the way it has to be right now. We do live in an area of the country where housing is very affordable, luckily. Really it is our debt that is keeping us living so modestly, so if you didn't let yourself fall into that trap, than I wouldn't feel bad about buying a little more house.

The property taxes make a big difference here. Our payment is about $250 higher than our last house but the mortgage payment is about the same (different amount, lower rates but same total).