Also just FYI. Interest rates are still at a record low. However they are projected to really shoot up in the next few years. So now is the time to buy if you're thinking about it. It's definitely still a buyers market :-)
Refinancing into a lower interest rate is also an awesome idea if you plan on staying in the home long enough to make it worth it!! Crunch the numbers on how long you'll be there considering closing costs and interest saved per year!
As an entry level science person and a graduate student, I lived alone in the centers of Boston and Philadelphia. I spent 45 - 60% of my take home, post tax pay on living. I'm a great budgeter - haha. Those were extreme and lean years but I wasn't eating ramen for eight years.
Now we pay more like 20%. We own our home. We live in the city so our home is small and expensive. I loove it. We were very strict with our budget when house shopping.
I was a little bit nervous to calculate this, I had never thought of it this way before! However, once I calculated it I was happily surprised with our %- we pay 16% including our property taxes and insurance. We are looking to move into a larger house within the next 2 years or so, though- so I'm sure it's going to be increasing soon!
*Edited to add that we are lucky to live a relatively affordable housing market, which definitely contributes to why our percentage is lower...This is for a 1500 sq. feet 3 bedroom house.
We pay 20% of our take home for mortgage and taxes - we live in a decently priced area, so we kind of splurged and bought a large house to grow into. It was the absolute most I felt comfortable affording while socking money away into retirement funds (we both have pensions as well), and having plenty left over for travel and things. Those house calculators are completely off.
Post by thechickencoop on Jan 22, 2015 8:48:36 GMT -5
We spend just under 30% for our house and utilities. This is post tax, retirement, health savings, etc. It will end up being a little less once I start working too but my paycheck is going to go in a completely separate account that we won't use for now. *reminds me to go to the bank to open said account today*
We've also refinanced twice since we bought in 2008. For us, it was sooo worth it. We bought with no down payment and at a higher interest rate, I think over 6%, and refinanced after 2 years with a lower interest rate. Two years later we refinanced again with a VA loan which lowered out interest rate again and cut out our PMI. So our mortgage payment is like, 40% less than what it was.
Interest rates are crazy good right now. Fannie Mae is loosening some of their lending standards as well. For instance, if you have a great downpayment or lots of equity, they'll over look a less than stellar credit rating. And conversely, if you have a great credit score and low debt to income, they'll take less of a down payment.
Post by SheilaTheTank on Jan 22, 2015 9:10:01 GMT -5
We spend about 25% of our take home pay for a 3 bedroom 1300sq ft. apartment. This does not include utilities though. Also our rent here is extremely low for the state and we had to move quite a bit away to get a deal like this. COL in my state is ridiculous and housing prices are insane.
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We spend about 33% of our take home on our mortgage which includes taxes and insurance. This is for a 3 bedroom 1 full/2 half bath rancher in a suburban neighborhood with a pretty good sized yard. Our whole state is pretty expensive. We take out the full 5k for a dependent care FSA and use the highest matching contributions for our retirement plans. Little AWish of me but I'm excited that we are on our way to our mortgage being our only debt by the end of this year.
Post by catinatophat on Jan 22, 2015 9:21:19 GMT -5
We are at 14% of our after tax (excluding bonuses) for mortgage, taxes and insurance. We bought when the market was really low and my salary has increased significantly since then.
Post by mynameiscarrie on Jan 22, 2015 9:22:34 GMT -5
Our mortage/tax/insurance is about 20% of our monthly earnings. We bought a house for a hell of a deal at an insanely low interest rate. We caught the market at a really good time and the seller was motivated. All in all, we got really lucky with our house.
I agree with rufus426 : They say you can estimate that your budget is 3x your yearly salary. To us, that was too much money. We didn't need a house that big and the payments would have been a good chunk of our paychecks. We figured that if we could buy a home and pay for a mortgage that was around what we paid in rent then it would be something we could work out. There were a TON of houses in that price range when we looked, too. Everyone is different, but that was our mentality when figuring our budget.
About 10%. But we bought well below what we can afford in the hopes of paying it off early. We also own A rental house that we get income from. If you factor that income in its more like 8%.
Actually this is about exactly us right now. It WAS 20% but with new jobs/raises it has dropped to approximately 10%.
If I calculate using our one income, base pay, we spend about 25% on our mortgage. My husband always gets overtime pay, so it's actually a lot lower percentage. I would not be comfortable going over that because it limits the rest of your spending. Also, we live in a rural area with 3 beds/2 baths on 1 acre.
We are at about 18% for mortgage, taxes, and insurance. We pay over every month so we can take 5-7 years off our 20 year mortgage. This is for a 3br 1.5 bath 2000 sqft. We will probably have to upgrade for the extra bathroom sometime but DH really wants to pay our current house off first.
Post by goldenlove3 on Jan 22, 2015 9:36:48 GMT -5
We're probably around 25%. We just refinanced out of our 30 year FHA into a 15 year conventional. It increased our payment a little but got rid of the PMI. We have a 4 bedroom, 2.2 bath colonial. I actually want to move really bad but don't know where to and when that would be.
Post by longhornwino0907 on Jan 22, 2015 9:43:04 GMT -5
We're around 25% for mortgage, taxes, insurance, and PMI, I believe. Getting paperwork done for a refi, though, that'll take that down a couple of percentage points. Ours is a 5 bed/2.5 bath home with just over 3,000 square feet.
+1 for everyone who said those calculators are crap. Thankfully my H is a numbers guy, so he used those calculators as a starting off point, but really did a lot of his own calculations to figure out what we could afford while comfortably maintaining our lifestyle.
We are at around 33% monthly but H is salaried plus commission, which is only paid annually. So we get a check of 25-45% of his income in the spring. Its a weird system and makes budgeting challenging but we are trying to make it work on just his income so I can continue to sah with dd.
Right now it's about 30% of solely my income - DH started a new commission based job mid-year this year and the items/services he sells take many many months of work to actually get to the commission stage, so his income right now is less than half mine. However, once he's up and running, the mortgage will only be about 15% of our take home pay combined. We did the mortgage based solely on my income for this reason, so while right now it's a big chunk of my income, that will get better within the next year. Plus, I'm still on my base salary, and in theory I should be getting raises over the years that should eventually nearly double my current salary. I do have student loans up the wazoo till 2018 though. Seriously, I just think that while things are tight now, in 4 years it will feel like we're rolling in dough!
Wow, after doing this math I am shocked that we are only at 11%, because I feel like we constantly have no money. This is our first year living together (this time around--we lived together about 6 years ago when I was in college), but we are determined to pay cash for our wedding, with not much help from family. This peaked my interest so I crunched a few more numbers. We put 30% of our take home pay towards wedding expenses each month.
This has me thinking about how we budget and our plans for a new house. I'm thinking wedding expenses should just be put away as baby expenses after we get married. Does anyone else save for baby already?
We pay about 29% for mortgage, taxes, homeowners insurance, and basic utilities. But my husband gets a raise next month, so it'll go down a little. I should get a raise within the next few months... so looking forward to that percentage getting less and less. I live in a city in which the real estate is ridiculously expensive compared with the rest of the state.
Post by doggiestyle88 on Jan 22, 2015 9:54:17 GMT -5
We are at 25% right now, but are renting. We are in the process of saving for a DP and just thinking about house hunting in SoCal is giving me (and my wallet) a stomach ache. The cost to buy in our area is ridiculously high, so if we want to keep our mortgage under 40% of our earnings we will have to move to a different county. If we didn't have so much family in the area, we would probably move to a different state.
Wow, after doing this math I am shocked that we are only at 11%, because I feel like we constantly have no money. This is our first year living together (this time around--we lived together about 6 years ago when I was in college), but we are determined to pay cash for our wedding, with not much help from family. This peaked my interest so I crunched a few more numbers. We put 30% of our take home pay towards wedding expenses each month.
This has me thinking about how we budget and our plans for a new house. I'm thinking wedding expenses should just be put away as baby expenses after we get married. Does anyone else save for baby already?
We have savings but it's not necessarily for baby. If you have any debts (student loans, cars, etc besides the house) I would recommend using the money to pay those off first. It's amazing how easy it is to save with no debt! We followed the Dave Ramsey plan.
We pay about 25% for mortgage, taxes, and insurance. We have a 5 bedroom 3 1/2 bath 3700 sq ft house that we built last year. We definitely live in a low cost of living area, but we went ahead and bought what we knew we would need with kids. We also wanted space for family to stay when they came to visit.
When we get raises this spring, we'll be paying more like 23% towards housing. We also contribute to our 401Ks at work and are paying DH's student loans off as fast as possible. We just paid off the credit card we had built up when we started grad school and weren't paid as much as we expected.
@araus2015 We're saving up for a new car in one savings account and general savings in another. When we finally get a BFP, we'll open another savings account specifically for baby things. Until then, we're just working on paying off student loans and then the mortgage.
Wow, after doing this math I am shocked that we are only at 11%, because I feel like we constantly have no money. This is our first year living together (this time around--we lived together about 6 years ago when I was in college), but we are determined to pay cash for our wedding, with not much help from family. This peaked my interest so I crunched a few more numbers. We put 30% of our take home pay towards wedding expenses each month.
This has me thinking about how we budget and our plans for a new house. I'm thinking wedding expenses should just be put away as baby expenses after we get married. Does anyone else save for baby already?
We have savings but it's not necessarily for baby. If you have any debts (student loans, cars, etc besides the house) I would recommend using the money to pay those off first. It's amazing how easy it is to save with no debt! We followed the Dave Ramsey plan.
My dad told me about Dave Ramsey!! We are working on it, it's just such a slow process. I paid off our last credit card this month, and vehicle debt is up next. I'm giving myself 10 years on the student loans though. Those are well into the 6 figures. Ugh.
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