% of NET income for Mortgage?

[neil1973]

I always thought these % based metrics were a bit flawed as a general guide to financial best practice . What I mean is:

someone paying 40% to mortgage + taxes, with a net monthly take home of 8k

=/=

someone paying 40% to mortgage + taxes, with a net monthly take home of 16k


It really comes down to how much $ you have left to do other things, after paying your mortgage.

[James1202]

In addition to all that's been said, many, if not most, LIers can pretty much count on their inevitable increasing equity of their home to help finance retirement by relocating to a place where equivalent homes cost much less. Such a plan would make sense to limit 401K contributions only up to the limit matched by employer and use the rest, that would have been contributed, toward paying down the mortgage (401K's may have around a 5% return and this should be considered vs the mortgage).

Until moving to LI, 1 to 1-1/2 year's gross salary = purchase price of my homes (Upstate). Those same homes would be about x6-8 on LI.

[SilverBulletZ06]

With or without the extra money put into the mortage?

Maybe 25% but we add extra every month and give a bonus evert few months if our ROTHS are full.