How much should your mortgage be relative to income?

[sunrose63]

Originally Posted by PotterGeek

I go by the net income, not gross. I don't see alot of my gross income, what I see is the net. That's the "real" money you have to live on.

If we went by "gross" income, we would be completely housebroke. And the ONLY debt we have is a car payment of $353.00 a month. No credit cards, no lines of credit, no nothing. But we do have daycare costs, so it depends on if you have kids and your lifestyle.

Don't overextend when you don't have to. Your house should serve you, you shouldn't have to serve your house!

I absolutely agree! Not realistic.. You would absolutely stay house poor. [I searched on Google] The reason they calculate the gross is because they take in consideration that you get some of that back on your taxes.
How ridiculous! Then again it is up the individual to be smart enough to know what they can afford and can not.,.. I always use my net income. Have a great day!

[NatasNJ]

Originally Posted by sunrose63

The reason they calculate the gross is because they take in consideration that you get some of that back on your taxes.
How ridiculous!

Why is that ridiculous? That tax write off in turn equals REAL MONEY.
So your net income increases (by either raising your deductions or getting large check at file time). Not sure why you would consider that ridiculous.

[formercalifornian]

Twenty-eight percent of net income is the generally accepted wisdom, but I think it's most important to consider your monthly expenses. If they take up 75% of your net income, then 28% would put you underwater.