polksalet Posted June 14, 2008 Share Posted June 14, 2008 If a small bump in the rates means you can't afford them you couldn't afford it in the first place. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted June 14, 2008 Share Posted June 14, 2008 25% is acceptable for a mortgage, assuming there isn't a boatload of junk debt floating around. You need to remember, too, Atomic, that dinks have a bit less overhead than you rabbit-like Celts. 25% of gross or net? 25% of gross is, IMO, way too much mortgage to be carting around. Quote Link to comment Share on other sites More sharing options...
twiley Posted June 14, 2008 Share Posted June 14, 2008 25% of gross or net? 25% of gross is, IMO, way too much mortgage to be carting around. At 90K that's probably a little less than 5K a month so having a payment that's almost 2K is pushing it a little IMO. Quote Link to comment Share on other sites More sharing options...
AtomicCEO Posted June 14, 2008 Share Posted June 14, 2008 25% of gross or net? 25% of gross is, IMO, way too much mortgage to be carting around. That was my understanding, but the Messican was probably not understanding the net-net. You need to remember, too, Atomic, that dinks have a bit less overhead than you rabbit-like Celts. 15% on mortgage 10% on whisky 6% on potatoes and potato accessories You have to budget. Quote Link to comment Share on other sites More sharing options...
Jackass Posted June 14, 2008 Share Posted June 14, 2008 On the plus side, this is the best buyer's market for decades. The drop in house prices will more than compensate for a little more mortgage cost. You'll be able to buy a house you could not have bought two years ago. How are you coming to this conclusion? A lot of things i've read are predicting housing prices to drop quite a bit further. I realize now is better than a couple years ago and buyers have much more leverage in today's market but that's not the same as what you're saying. I'm not an expert in this area, just asking. Quote Link to comment Share on other sites More sharing options...
sundaynfl Posted June 14, 2008 Share Posted June 14, 2008 A 25% debt to income ratio is a very reasonable amount to pay for a mortgage... some of the advice in here is way off line due to the tax benefits that you and your wife would receive from having a mortgage payment... but hey, you are getiing advice in a FF forum! PM me and I would be more than happy to discuss! Quote Link to comment Share on other sites More sharing options...
polksalet Posted June 14, 2008 Share Posted June 14, 2008 A 25% debt to income ratio is a very reasonable amount to pay for a mortgage... some of the advice in here is way off line due to the tax benefits that you and your wife would receive from having a mortgage payment... but hey, you are getiing advice in a FF forum! PM me and I would be more than happy to discuss! f a mortgage is that high there is basically 0% chance of paying it off early which is quite insane. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted June 14, 2008 Share Posted June 14, 2008 How are you coming to this conclusion? A lot of things i've read are predicting housing prices to drop quite a bit further. I realize now is better than a couple years ago and buyers have much more leverage in today's market but that's not the same as what you're saying. I'm not an expert in this area, just asking. That's exactly what I was saying. Just because the market might / will drop further doesn't mean in the here and now it's not the best market for decades. Some people need to buy now, not in a year or two. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted June 14, 2008 Share Posted June 14, 2008 A 25% debt to income ratio is a very reasonable amount to pay for a mortgage... some of the advice in here is way off line due to the tax benefits that you and your wife would receive from having a mortgage payment... but hey, you are getiing advice in a FF forum! PM me and I would be more than happy to discuss! If your gross income is $90k and your net is $60k, having $1800 x 12 = $21,600 of that $60k wrapped up in a mortgage doesn't strike me as being very prudent is all I'm saying. Sure it can be done but it would make me very uncomfortable. Quote Link to comment Share on other sites More sharing options...
Big Country Posted June 14, 2008 Share Posted June 14, 2008 25% of gross or net? 25% of gross is, IMO, way too much mortgage to be carting around. According to wikipedia and about.com most lenders allow up to 28% of gross as the threshold for a standard conforming loan with 36% of gross total tied to recurring debt. The two main kinds of DTI are expressed as a pair using the notation x/y (for example, 28/36). The first DTI, known as the front ratio, indicates the percentage of income that goes toward housing costs, which for renters is the rent amount and for homeowners is PITI (PITI includes mortgage principal and interest, mortgage insurance premium [when applicable], hazard insurance premium, property taxes, and homeowners association dues [when applicable]). The second DTI, known as the back ratio, indicates the percentage of income that goes toward paying all recurring debt payments, including those covered by the first DTI, and other debts such as credit card payments, car loan payments, student loan payments, child support payments, alimony payments, and legal judgments.[1] CBS seems to agree with these numbers: Page 2 of the CBS article: For example, if your total household income is $80,000, your monthly income is $6,667. At 28 percent, you can afford to spend $1,867 on mortgage payments (PITI) per month. At 36 percent you would get a total of $2,400 in debt-related expenses per month. At this point you are ready to consider your loan options and use online calculators to see where you stand. Continuing with the example above, if you find a mortgage loan that would cover your needs would require an inclusive PITI monthly payment of $1,500, you would be well under your $1,867 limit. Next, factor in your average monthly credit card expenses, car payments, and any other rotating charges. If that total came to $800, your total debt burden would be roughly $2,300 -- $100 less than your $2,400 limit. Ultimately it is up to you to apply these formulas and ratios to your own financial situation. Remember, while the numbers may help you get approved for a loan, they won’t provide you with the whole story. Some people can afford a little more, which others should pay less depending on lifestyles and other factors. I found this interesting as the numbers look close to what rebellab is stating. Quote Link to comment Share on other sites More sharing options...
Piles Posted June 14, 2008 Share Posted June 14, 2008 How about just staying where you are? You said your housing is included in your salary compensation. If you move out do they pay you that out in cash? If not, then there wouldn't be anyway in hell I'd leave a place that was essentially free. And I would definitely agree with Ursa and Atomic, 25% of gross seems extremely high to me. I would not be able to sleep at night knowing my mortgage was that high. Quote Link to comment Share on other sites More sharing options...
The Irish Doggy Posted June 14, 2008 Share Posted June 14, 2008 Look into lender paid mortgage insurance. It is usually less expensive than PMI and since it is worked into the percentage rate, you get to deduct it. Of course it means you want to look at refinancing once you've paid off 20% of the house. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted June 14, 2008 Share Posted June 14, 2008 According to wikipedia and about.com most lenders allow up to 28% of gross as the threshold for a standard conforming loan with 36% of gross total tied to recurring debt. I'm sure you're right but I was only stating a personal position. My mortgage is less than 17% of net and was never more than 22% of gross, IIRC. Obviously it was at it's highest as a percentage of gross the day it started and over the years it shrinks as a percentage of both gross and net but I'm fiscally quite conservative and would hate to carry a mortgage that is 28% of my top line. But that's just me. Quote Link to comment Share on other sites More sharing options...
sundaynfl Posted June 14, 2008 Share Posted June 14, 2008 (edited) Look into lender paid mortgage insurance. It is usually less expensive than PMI and since it is worked into the percentage rate, you get to deduct it. Of course it means you want to look at refinancing once you've paid off 20% of the house. Once again... bad advice in a FF forum... consult a mortgage planner!! PMI is a deductable in his case with a gross income of $90,000... no offense TID. Edited June 14, 2008 by sundaynfl Quote Link to comment Share on other sites More sharing options...
twiley Posted June 15, 2008 Share Posted June 15, 2008 I'm sure you're right but I was only stating a personal position. My mortgage is less than 17% of net and was never more than 22% of gross, IIRC. Obviously it was at it's highest as a percentage of gross the day it started and over the years it shrinks as a percentage of both gross and net but I'm fiscally quite conservative and would hate to carry a mortgage that is 28% of my top line. But that's just me. I'm in the same thinking as you. My current house payment is probably around 8-10% of my net. Quote Link to comment Share on other sites More sharing options...
polksalet Posted June 15, 2008 Share Posted June 15, 2008 http://www.daveramsey.com/etc/cms/how_much_house_6374.htmlc Quote Link to comment Share on other sites More sharing options...
Piles Posted June 15, 2008 Share Posted June 15, 2008 Once again... bad advice in a FF forum... consult a mortgage planner!! PMI is a deductable in his case with a gross income of $90,000... no offense TID. If you can't put 20% down on your house then you shouldn't be buying it in my opinion. I don't care if you can claim it or not. Buying houses w/o 20% down is one reason for all the foreclosures IMO.... Quote Link to comment Share on other sites More sharing options...
The Irish Doggy Posted June 15, 2008 Share Posted June 15, 2008 (edited) Once again... bad advice in a FF forum... consult a mortgage planner!! PMI is a deductable in his case with a gross income of $90,000... no offense TID. None taken. But bad advice? Jeesh. Its simply what our mortgage broker advised us to do. My first house, I paid the MI, but this time around she said PMI was more expensive vs lender paid MI since the market went bad. It seemed relevant to pass along the option just in case he didn't know it existed. I didn't. Edited June 15, 2008 by The Irish Doggy Quote Link to comment Share on other sites More sharing options...
muck Posted June 15, 2008 Share Posted June 15, 2008 So, is it wrong for me to have done a stated income / stated asset loan, with a floating rate that is for 75% of my gross? ...just asking... Quote Link to comment Share on other sites More sharing options...
I Like Soup Posted June 15, 2008 Share Posted June 15, 2008 Why not get an 80% and a 20% loan to avoid PMI altogether. Or, if you are ex-military, go for the VA loan and you don't have to pay it at all. Quote Link to comment Share on other sites More sharing options...
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