simplistic question, mostly curious

[Indigoblue]

PS. The bank would have allowed us to spend 51% of our income on our mortgage but since we aren't completely insane we capped ourselves at 31%. Though I guess if you're making 300-400k (which we don't come anywhere close to), 49% left over after mortgage is still a ton of money so some people may go to that high of a percentage.

You really have to weigh your monthly expenses, leave room for those things that happen now and then, and make sure you can have savings and investments. Then it comes down to how much fun money and how much peace-of-mind money you want versus what's going to go into your mortgage. Also, generally speaking, your mortgage IS an investment, though one you may not benefit from until you downsize when the nest is empty

[newmom5497]

We have no mortgage at all here in NJ, yet still pay $608.00 per month in PROPERTY TAXES, and over $1000 per month on Health Insurance(hubby self employed).. Hence, moving to NC this summer. Prop. taxes will be MUCH lower and even our health insurance rate will go down to $450.00 per month just by not living in NJ.

Crazy

[NCHomeFinder]

Originally Posted by Indigoblue

PS. The bank would have allowed us to spend 51% of our income on our mortgage but since we aren't completely insane we capped ourselves at 31%.

That's a big point some people, especially some first time homebuyers don't realize.

What the bank says you can afford and what your budget says you can afford are often two VERY different numbers. Back when we bought our first house, we were told that a good rule of thumb was 3 times your annual salary. Even with no car payments and only one child, with no daycare expenses as a SAHM, we thought even that figure was ridiculous when we saw the payments!

The other thing is, it's hard to know just what monthly payment you're even comfortable with when you're relocating, changing jobs, getting used to the cost of living in a new area...

City-Data is a great source of information for the cost-of-living information. Spreadsheets are good. Lots of spreadsheets. Your realtor can help you find answers about cost of living, too.

[Wanna Leave Penciltucky]

Althought I don't mind questions, it's really relative because some people put down huge downpayment and their payments are smaller. No way to comparatively tell what you need to ask is SALES PRICE. Payments are different because the principal is different and so is the interest. Some people got 5% loans and some with different credit got higher rates.
You need all the figures sales price, loan principal and interest rate to get a fair estimate of a payment. And as mentioned previously escrow, which I never do.

[NYC2RDU]

The general rule of thumb I've always subscribed to regarding mortgages is it should never exceed 2x your gross annual income. My experiences have proved this theory over the many years I've carried a mortgage.