| % of house hold income on housing? - Click HERE for Original Thread |
| XtraX |
| Anyone have a good 'rule of thumb' on a percentage of your house hold income should be spent on Mortgage/rent? |
|
|
| crazy240sx |
quote:
It should include all expenses property taxes, and insurance and if you have condo fees include those as well. All together it should not be more than 28% of your gross monthly income. Hope this helps.
taken from this forum |
|
|
| ChromeDragon |
| Only 28%? I'm under that at about $1,600 a month for mortgage and insurance, but I didn't think it would be only 1/4. I think a lot of these things assume people are going to have big car payments and shit like that. |
|
|
| AudiInProgress |
| I'm sitting about 50% right now. Will be back down to 25% when wifey gets back from school. |
|
|
| Blackout-spec |
i was out mortgage shopping a few days ago, and the bank lady said for a 350,000$ mortgage, for 40yrs biweekly, i would be paying roughly 2000/mth with a 5.25% interest rate. thats with 25000 down... didnt there used to only be 25yr mortgages? holy shit son!
when i buy, ill be at about 50%, |
|
|
| GOT SE-R |
quote:
Originally posted by Blackout-spec
i was out mortgage shopping a few days ago, and the bank lady said for a 350,000$ mortgage, for 40yrs biweekly, i would be paying roughly 2000/mth with a 5.25% interest rate. thats with 25000 down... didnt there used to only be 25yr mortgages? holy shit son!
when i buy, ill be at about 50%,
There still is, but they use numbers that they feel you can afford and will work with your budget. If you took 25yrs it be alot more $$ per month. |
|
|
| SilverNeonRacer |
I did a check once.. and according to the mortgage calcs... going between 35yr and 40yr... on a $300,000 house with I can't remember how much interest is only like $20-$30/more a month...
I though the banks only liked 35% debt ratio or what not |
|
|
| Blackout-spec |
| thats right, basically if i wanted to pay 2100/mth, my house would be paid off in 26 yrs. thats a huge difference! |
|
|
| stealth |
| Yea the difference between 25 year and 40 year on a 400-500k mortgage is about $250/month. |
|
|
| the_saint |
quote:
Originally posted by Blackout-spec
i was out mortgage shopping a few days ago, and the bank lady said for a 350,000$ mortgage, for 40yrs biweekly, i would be paying roughly 2000/mth with a 5.25% interest rate. thats with 25000 down... didnt there used to only be 25yr mortgages? holy shit son!
when i buy, ill be at about 50%,
Is it possible to get a mortgage at a TDSR of 50%? <== house poor.
Doubt it. :(
To answer the question, mortgage/housing costs are <10% of income for me, but I live in a small house in Winnipeg. |
|
|
| Blackout-spec |
| the lady did all the calculations for me for a 350000$ house. she said with my income, i will be approved. thats with about 2000/mth. so i dont know, but im approved, and thats the max that i wanted to pay per month so yah. |
|
|
| REFLUX |
| Ideally, less than 32% of your income. |
|
|
| Eclipser |
quote:
Originally posted by REFLUX
Ideally, less than 32% of your income.
That is what I was told when I was in the bank the other day. Your total debt (car loan/home etc) should be no more than 32% |
|
|
| ReasonOne |
I know people with a debt service ratio in excess of 60%, and frankly I don't know how they manage - let alone sleep at night. :dunno:
Some mortgage brokers have more leeway in this regard and can approve mortgages up to 42%.
My household is sitting at somewhere around 20%. We always toss a good chunk of change into the principle on the anniversary of the mortgage.
I'd really like to be mortgage free in 10 years. If things continue their course that shouldn't be a problem.
:blue: |
|
|
| anschutz_93 |
Debt really doesn't bother many people. Just the fact that so many people own 600k to 700k houses tells you what the mindset of the average person is... Live big! The average family income in Alberta is still under $80k yet your average suburban house is 450k. To top it off everyone HAS to buy a new car every couple of years just to keep up their appearance of wealth. Credit is cheap, life isn't. Its too easy to live an excessive lifestyle on someone else's money.
Sorry to refute common knowledge, but the average family in Alberta aren't making >130k/year; a sum required for the responsible purchase all of these 600-700k houses. Generally speaking families who make an honest 150k/year have something to show for it. It is very easy to appear to be well off, but in reality it is harder to achieve. 150k/yr spent responsibly would easily pay off a 700k house over the term of a 15yr mortgage providing you kept expenses down and did a large down payment. If someone had the warped mindset that they were entitled to the same house with a household income of 100k/yr they too could afford the 700k house, albeit with a 40yr mortgage. Sorry but Mr. 100k/yr has to get his head out of his ass and learn his place, he cannot play with the big boys, little balla' is he. 100k/year will by a nice house and car if you live within your means; who the hell wants to be enslaved by their mortgage the best part of their lives, by the time you get to enjoy it you will be 3/4 dead and both you and your house will be played out. 60% debt load is for those who lack foresight and have severely warped priorities.
Edit* lol I really don't know where I was trying to go with this but I really gotta do my calculus.... 35% is a good rule of thumb. |
|
|
| AudiInProgress |
quote:
Originally posted by ReasonOne
I know people with a debt service ratio in excess of 60%, and frankly I don't know how they manage - let alone sleep at night. :dunno:
Some mortgage brokers have more leeway in this regard and can approve mortgages up to 42%.
My household is sitting at somewhere around 20%. We always toss a good chunk of change into the principle on the anniversary of the mortgage.
I'd really like to be mortgage free in 10 years. If things continue their course that shouldn't be a problem.
:blue:
Depends how you look at it... When I first applied for my mortgage, I was only making $xxxx/month, on paper... And that was before taxes. I reality, I was walking away with $xxxx/month, and my mortgage payment was 94% of my income.
I have other sources of income, but could not be taken into account by the mortgage broker, however... My wife was making plenty of money at that time, so we easily got approved, and the mortgage broker just didn't tell the lender that my wife was quitting her job as soon as we got approved.
lol
That was quite some time ago, and I'm making substantially more money now, along with raises and my alternate income... My mortgage mayment, in reality, takes up about 50% of my income as I previously stated in the thread.
When my wife comes back homeo and starts working again, that 50% will drop to probably 20% but in the meantime... I certainly have no trouble sleeping at night. |
|
|
| ChromeDragon |
"How do you sleep at night?"
"On a big pile of money with many naked ladies."
I am still paying off renos on the house here as well, so that could be tacked on I suppose. That's still under 30% before taxes though. After taxes it's obviously a larger chunk. |
|
|
| ChromeDragon |
"How do you sleep at night?"
"On a big pile of money with many naked ladies."
I am still paying off renos on the house here as well, so that could be tacked on I suppose. That's still under 30% before taxes though. After taxes it's obviously a larger chunk, but I get by just fine. Once these renos are paid I can start throwing an extra $500 a month at my mortgage. |
|
|
| AudiInProgress |
 |
|
|
| anschutz_93 |
| ^:lol: why is this forum so laggy all of a sudden? |
|
|
| ReasonOne |
AIP,
If you have alternate sources of income that your broker couldn't include into your qualifying, then you would have no reason to lie awake at night anyway. Your post makes it clear that you have taken your wife's loss of income into account, and that you've taken the planning and forethought to determine that you can survive.
Your wife may be in school, but it's clear that when she finishes and decides to return to the workforce you will be more than comfortable.
I am talking about the people who scramble to get into the market without looking extensively at their budget, doing plenty of research or thinking things through.
For example one of my distant friends, desperate to get into the market buys a beautiful home in S.W. Calgary. His monthly payments? Something in the region of $3500/month. His salary? Currently about $7500/monthly. His gf lives with him and make about $3500/month. Seems OK, right? Wrong.
After listening to him brag to all his friends about the brilliant purchase he's made for a few months he suddenly starts to get tight lipped. Turns out he has other expenses. He's paying $2K/month for 3 cars (2 are leases). He has a boat sitting on the side of his property he's never used (he's paying $650/month for that luxury) and some "unexpected home repairs" arose to the tune of $40K. I asked if the home inspector he used warned him of any issues. "Home inspector?" he responds quizzically.........
His gf approaches him one night in tears, telling him the neighbors are talking because their house looks like it's under construction and the grass and garden look "unkept". They were even gossiping about their "measly" $399 barbeque. I warned him twice not to fall into the "keeping up with the Joneses" trap. He ignored my advice, saying that "he wants to make his girl happy and she deserves the world". But at the cost of bankruptcy? Shit....
He then hires a gardener to maintain the property (I don't know his salary), goes to one of those expensive appliance stores and buys an $8,000 barbeque. They entertain at least once a month, and from what I hear it's costly to impress his neighbors.
He could be bankrupt in 6 months if he's lucky. Turns out his father loaned him $75,000 to remain in an investment to make him look like he had a higher net worth to qualify for the mortgage. There was a written contract (that gf doesn't even know about) that the money would be returned to his father in 2 years time with the added benefit that his son got to keep the accruing interest. He's spent almost half that money already (so now he's not collecting nearly enough interest as he hoped).
Properly managed, an $11,000 monthly income could take you so much farther than the ridiculous mess my acquaintance is in (loan or no loan). I really feel bad about his financial problems, but he created the situation and now he hast to live with the consequences. Nobody pointed a gun to his head and ordered him to make these stupid mistakes.
I know at least a dozen people in similar predicaments. On paper this couple seemed OK, but it was a series of poor decisions that screwed them up. I cannot believe how many people get caught up with keeping up appearances, or not taking just a little time to do some extra research. These are strange times in Alberta. |
|
|
| Twigs_Dee |
quote:
Originally posted by AudiInProgress
I'm sitting about 50% right now. Will be back down to 25% when wifey gets back from school.
I'm at about 52% and about to go up! DAMNIT! :mad: :mad: |
|
|
| JustinL |
| Are you guys talking % of take home pay? |
|
|
| AudiInProgress |
quote:
Originally posted by JustinL
Are you guys talking % of take home pay?
Yes. |
|
|
| golfer1 |
| I am around....wait what am I talking about, I am morgage free!! for 2 years now |
|
|
| REFLUX |
quote:
Originally posted by Eclipser
That is what I was told when I was in the bank the other day. Your total debt (car loan/home etc) should be no more than 32%
I believe once you include car loans, credit cards, line of credit, etc, then it's 40% (Total Debt Service Ratio)
32% is only for mortgage, interest, property tax and some include utilities = Gross Debt Service Ratio. |
|
|
| MAPEX |
| i prefer 60 years to pay but im sure the bank will disagree with me. why is that? explain to me guys... |
|
|
|
|
|
