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Old 09-24-2009, 09:25 AM
 
Location: Oakton, VA
20 posts, read 65,182 times
Reputation: 13

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Thanks to all who provided feedback on the property in Burke I was considering. Unfortunately after running the numbers I realized the harsh reality of trying to purchase on my relatively low income - 66% of take-home pay monthly is quite unreasonable to put towards housing costs, in my opinion. I've seen threads here that point to rules of thumb when determining an acceptable monthly rent payment - what are your thoughts as to whether that differs when we start talking about mortgages instead? I was really hoping to take the plunge and purchase this fall, but I'm getting the impression I may be better off renting closer in and waiting...
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Old 09-24-2009, 10:04 AM
 
Location: Reston, VA
2,045 posts, read 3,754,316 times
Reputation: 1205
I think 33% of gross (not take-home) is a good number for PITI and utilities.
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Old 09-24-2009, 10:12 AM
 
280 posts, read 947,312 times
Reputation: 127
You might want to check out the CD Mortgage forum for discussion on this too.

Unlike apt complexes, who tend to make their own rules, banks have increasingly uniform guidelines as to what they will qualify people for.
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Old 09-24-2009, 10:14 AM
 
Location: Sometimes Maryland, sometimes NoVA. Depends on the day of the week
1,501 posts, read 11,142,294 times
Reputation: 1132
Banks generally use 28% of gross income (with 34-36% total debt payment) to qualify you for a mortgage.

Other than crunching the numbers to figure out what you qualify for, the rest is a matter of comfort. I have friends who are happy in pricey homes, but they never travel. And that may work for them, perhaps they don't travel, don't like to eat out, etc. Some financial planners even recomment borrowing the most you qualify for, as it nets you the biggest tax deduction. My husband and I, however, base all our housings costs on 50% net of one salary (i.e., one of my paychecks should pay the mortage), as we prefer to enjoy doing other things with our money, too.
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Old 09-24-2009, 11:11 AM
 
61 posts, read 144,139 times
Reputation: 25
66% of take home pay seems high but as rubytue said banks look at gross and what other debt you have.

I am looking to purchase and luckily have very little other debt (yes, paid it off) and lender was willing to go 36% of gross for monthly payment...personally, not conformatable with that high.
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Old 09-24-2009, 12:12 PM
 
Location: Sterling, VA
1,059 posts, read 2,725,978 times
Reputation: 626
FHA uses 29% of gross monthly income for mortgage payment +HOA or condo fee + homeowners insurance and a total debt ratio of 41% (car payments, student loans, credit card debt, etc.) as general guidelines. Many people are going FHA now because of the low downpayment required (3.5% of purchase price). Another loan program available for Virginia purchases only is available from the Virginia Housing Development Authority (Virginia Housing Development Authority - VHDA Homepage). They have programs for first time buyers or those who have not purchased a home in the past 3 years. The lending guidelines are a little more generous and they do have programs with little or no money down.
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