How much should I spend on housing?

Question

How much of your income should you spend on housing?
I am looking to move to a new apartment and am wondering what price range I should look in but don't know how high to go.
I only make $28,000-before taxes.
$600/mo? $700/mo? $800/mo?

***I am looking to rent***
Don't beleive I can own anyway at this point.

Answer 1

For a payment that you can afford comfortably, we look to see that your housing expense should be about 28% of your gross monthly income. In this case: $653/mo. Your total debt to income should not be any more than 33-35% of your income or $816 - $886/mo. I hope this helps!

Anne

Answer 2

Your after tax per year is about, what, $23 or $24 thousand? That works out to be $2000 or less a month take home pay. I would try to stay in the $600 - $700 range, preferably the lower end. You will have other bills, too, not just the rent. And you ALWAYS need to put money into savings. And remember, gas prices only go up.

Happy hunting

Answer 3

For your pay grade, I would recommend no more than 33% of your gross pay. Some banks (subprime) will allow you to get away with 50% of your gross on a PITI (Principle, Interest, Taxes, and Insurance) payment, but you have to look at your other expenses. Fixed costs as well as utilities, cable, cell phone, and gas bills eat up a greater percentage of your disposable income when you make less money.

The way the math works out:
If you've got 25K in the bank and a 620 credit score or better, you can finance 80% of a $125,000 house at a 6.25% rate on a 30-year fixed loan and pay $616 a month in principle and interest. You'd then have to add in the escrow of the taxes and insurance.

This also doesn't take closing costs, attorney fees, or broker costs into the equation, but it's a general idea of what you could get.

Answer 4

It depends on how many other payments you have. Consider that you have a car payment, credit card, cell phone, utilities, etc. After taxes you probably take home about $1800- 1900 per month, so you have to add up all your current bills and go from there. Before you agree to rent, find out what the average utilites in the property are. If it is an older facility, you will probably have higher utilities because of loss of function. Make sure you are not strapped for cash each month. Plan to save at least $100 per month for unexpected expenses. Also make sure that where you rent is a safe place to live - ask around about the neighborhood, etc. Good luck and have fun.

Answer 5

frustrating question, and finally no one can answer that except for your self. besides the undeniable fact that, per chance some functional insights will come out of this. Spending: spend in straightforward words as a lot as you want to. The happiness in identifying to purchase issues is in straightforward words short-time period, besides the undeniable fact that the happiness found in utilizing them is a lot more effective everlasting. So use what you've. The happiness found in giving is unheard of. The overused word "the suited issues in existence are literally not loose, yet powerful," is amazingly fairly actual. For me, relaxing responsibilities that I actually have taken on (monetary and in the different case) is likewise fairly rewarding. As is frustrating myself, and growing above those annoying circumstances... Saving: an undemanding preparation is to keep %10 of each thing your earn/ make. This is smart to me, yet per chance it truly is going to be higher. You under no circumstances recognize once you're going to need it... and in case you under no circumstances do, then that is giant too. it truly is more effective acceptable to have slightly more effective than you want, than truly a lot less. in case you could stay away from it, do not bypass into debt for issues which will in straightforward words serve to make you quickly satisfied. discover get exhilaration from existence contained in the persons you call acquaintances, contained in the activities you do (which contains artwork!), contained in the ingredients that you devour, in observing your monetary corporation account boost, in growing to annoying circumstances, relaxing ordinary jobs, helping others, and something else you do. keep in recommendations, money is finally valueless and ability no longer something. Time is the most priceless source that you've, and also you won't be able to reserve it... you could in straightforward words spend it no matter if you favor to or no longer. So spend it doing something that you get exhilaration from...

Answer 6

Ideally, you figure 30% of your gross monthly income would go to rent (for you to comfortably afford rent), so roughly $700 a month - and maybe up to $750 with utilities included.

Answer 7

There is no formula to figure this out. Just figure out your current income, and expenses then determine how much you could pay for rent on top of that.

Don't forget utilities, groceries, etc. Just remember that you will get what you pay for, and spending a little extra for rent might make you a happier, and more comfortable life.

Answer 8

A good, safe rule to follow is 25-33% of your gross monthly income for rent and renter's insurance. If you have a lot of bills (credit cards, car loan, student loan, etc.) then you should spend closer to 25%.

Answer 9

Typically no more then 1/3 of your gross income. A respectable property manager won't allow you to rent one of their properties if the rent is more then that.

Answer 10

I think it would depend on other bills that you have monthy. But I believe if you are renting that you are basically throwing money away, so less is best.