my wife and i take home 7400 a month. is 3700 a month too high for a mortgage? we want a new house.
2007-03-23 12:27:25 · 12 answers · asked by jeff 1 in Business & Finance ➔ Renting & Real Estate
Should be fine. I think the lines get a little skewed as far as the % of take-home. I mean, if you only take home $2500 and your mortgage is half of that, then you don't have a lot left for utilities, groceries, etc. But half of $7400 is a much bigger chunk.
2007-03-26 15:51:50 · answer #1 · answered by poonie 3 · 0⤊ 0⤋
Yes.
Theoretically you may be able to obtain a loan under such conditions, many people do....but if you just open a paper you will begin to read about them.....by the thousands, folks who are saddled with mortgages they cannot afford are starting to get into trouble.
The fact that you focus the question around the monthly payment and not the price of the house or the terms of the loan is troubling.
For example, if you were to obtain an interest only loan, that $3700 would give you about $700,000 in buying power...versus if you were to obtain a 12 year fixed rate loan, that would give you about $380,000 in buying power.
So if the question is "should I spend 50% of our income to get into the largest house possible under the riskiest possible loan terms" the answer is no.
If the question is "should my wife and I sacrifice and go without some niceties to get our $375,000 house paid off in 12 years, then I would say yes, and congratulations that is aggressive and prudent long term thinking!
Good Luck
Ed
2007-03-23 20:33:20 · answer #2 · answered by myfinancialmentor.com 2 · 0⤊ 0⤋
If I remember ,,20 is most a lender will allow you to do,,but now with the housing market,,50% is too high for anyone,,,look around find a home that better fits your needs,,no reason to buy big now and down size later when the bill collectors come knocking
2007-03-23 19:37:35 · answer #3 · answered by william w 2 · 0⤊ 0⤋
Twice as much as you can afford. You need to calculate what the taxes will be based on what you pay for the house. Then you have the insurance to pay. You will also need to be setting money aside for home maintenance which is constant even with new houses. I just saw a special on the news yesterday where they said the total for the payment, taxes and insurance should not exceed 25% of your take home pay.
2007-03-23 19:34:59 · answer #4 · answered by normy in garden city 6 · 1⤊ 0⤋
Take home pay is not the number lenders look at. They usually look at your gross pay. 50% of take home seems reasonable actually. Most lenders want 28% of your gross pay to be the max for your housing expense and 36% for all your debt.
2007-03-23 19:52:39 · answer #5 · answered by ecollado2000 2 · 1⤊ 0⤋
believe 26% of take home is the suggested number with
30% the max -- 50% would probably include fixed expenses
(phone, utilities etc) that only leaves 50% for groceries,
allowances, savings, IRA's (depending on age this could
be costly if you want any retirement funds at all) etc etc
2007-03-23 19:44:59 · answer #6 · answered by Anonymous · 0⤊ 0⤋
The median expense for renting and owning is about 35 % of your monthly income. Looks like you can get that house!
2007-03-23 19:37:39 · answer #7 · answered by gulfbreeze8 6 · 0⤊ 0⤋
28 % mortgage and 36% mortgage and other monthly debts is a good rule of thumb.
2007-03-23 19:31:53 · answer #8 · answered by crashfeldman 3 · 1⤊ 0⤋
50% take home pay is way to much, your suppose to allow up to 30%, there are usually calculators to use when looking on line what your income is compared to what you can afford.
check it out, type morgage rates/ finance
2007-03-23 19:32:50 · answer #9 · answered by Tootsie 1 · 1⤊ 0⤋
not if you enjoy eating ramen noodles in the dark
2007-03-23 20:29:22 · answer #10 · answered by Anonymous · 0⤊ 0⤋