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I know this has been posted 99999 times already...but what is the calculation
for figuring out how much mortgage you can afford? 30% of your combined annual gross income? Is that correct?
I could be way off here - I am searching and I just cant figure it out.
TIA!
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Posted 7/31/06 1:52 PM  |
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lululu
LIF Adult
Member since 7/05 9510 total posts
Name:
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Re: I know this has been posted 99999 times already...but what is the calculation
Meaghan knows it - i think she said last time it was 28%..... I think 30% is close enough. And that was supposed to include mortgage, property taxes and homeowners insurance.
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| Posted 7/31/06 1:56 PM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: I know this has been posted 99999 times already...but what is the calculation
keep in mind that other factors include how much your debt to income ratio is.
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| Posted 7/31/06 1:57 PM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: I know this has been posted 99999 times already...but what is the calculation
Posted by lululu
Meaghan knows it - i think she said last time it was 28%..... I think 30% is close enough. And that was supposed to include mortgage, property taxes and homeowners insurance.
ahhh 4 years of finance classes paid off!
I think it depends on the lender, but its usually 28% for the Mortgage payment, plus taxes and insurance.
and that PITI plus all other debt that you have shouldnt be more than 36% of your income.
on the Fannie Mae website they use 33% i believe. Some lenders may go that high, but will probably charge you a higher interest rate.
and remember, its calculated on gross income, not net income
good luck!
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| Posted 7/31/06 1:59 PM |
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lululu
LIF Adult
Member since 7/05 9510 total posts
Name:
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Re: I know this has been posted 99999 times already...but what is the calculation
Yeah - although 30% is the rule of thumb - i think it is always best to lay out all of your finances and then figure it out with a mortgage calculator from there. As we have seen in many of the threads on this website - everyones situations are different, and the amount of spending that everyone needs after their housing payment varies greatly....
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| Posted 7/31/06 1:59 PM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: I know this has been posted 99999 times already...but what is the calculation
Posted by lululu
Yeah - although 30% is the rule of thumb - i think it is always best to lay out all of your finances and then figure it out with a mortgage calculator from there. As we have seen in many of the threads on this website - everyones situations are different, and the amount of spending that everyone needs after their housing payment varies greatly....
I totally agree. Yes, there are tax advantages and thats why they use gross income....
but my gross income and net income are different because of 401k, health, dental, stock, etc...
There is a thread on home expenses, i'll see if i can find it!
Message edited 7/31/2006 2:08:29 PM.
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| Posted 7/31/06 2:07 PM |
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Re: I know this has been posted 99999 times already...but what is the calculation
Thank you ladies - I really appreciate it!
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| Posted 7/31/06 2:20 PM |
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