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Old 04-29-2007, 09:05 AM
 
16 posts, read 47,685 times
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Good Morning, I see many different opinions and/or calculators on how much of a monthly mortgage including taxes one should assume based on income.

What is a good, sound method to figure. Brokers could tell you anything.

We have no debt at all and I earn 52,000.00 annual. Would a mortgage of $1,300.00 be too high? What should I consider the top without getting into an iffy area. Thanks.
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Old 04-29-2007, 03:56 PM
 
287 posts, read 1,419,339 times
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We have a car payment of 386.00/month and our new mortgage will be 1420.00 but we are taking a 20 yr. vs. 30 yr. it will be very managable with my wife making 58k, now our other house was 2100, we scraped every month which is the main reason we got out. You should be able to do a 1300/month payment making 52k in my opinion. Just be sure the taxes, etc. are included in your payment or add them on the top.
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Old 04-29-2007, 04:43 PM
 
Location: Missouri
6,044 posts, read 23,246,832 times
Reputation: 5171
In the end, it's whatever you feel comfortable with.
If your rent is $800 right now and you think you can handle a $1300 mortgage payment (including taxes, insurance, etc.) each month, force yourself to put aside an extra $500/month. If you can do so comfortably, you're in good shape. Keep in mind too, houses usually have higher utility bills (because they are larger) and you need to factor in maintance costs.
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Old 04-30-2007, 09:09 AM
 
Location: Sherwood, Oregon
44 posts, read 230,095 times
Reputation: 23
Goat, I agree with the previous 2 posts. I'm a mortgage broker and yes, brokers could tell you anything. The bottom line is hwta you feel comfortable with. For a loan with fully documented income the guidelines want to see no more then 45% debt to income. This takes into account all debt showing on your credit report as well as your the proposed PITI (Principle, Interest, Taxes and Insurance.)
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Old 04-30-2007, 03:37 PM
 
Location: Maple Valley, WA
982 posts, read 3,189,875 times
Reputation: 451
LarryMorris is right-on.

My advice is to be as conservative as possible. $1300/mo. is right about where you want to be for PITI if 52K is your net income. If 52K is your gross yearly income, $1300 is about as high as I would want to go. Keep in mind that when a broker or loan officer calculates the debt/income ratio, they're looking at your gross income. IMHO, $1700/mo. is about as high as I would be comfortable going, IF 52K is your net income. If you have a good down payment, you can play with this a little bit, especially since you have no debt.

The general rule of thumb is don't let PITI exceed 25% of your monthly income. Check out www.bankrate.com and plug in some numbers (income, debt, downpayment, etc.). If you have a good downpayment, play with the numbers and check the differences in the ammortization schedule.

Hope this helps.
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Old 05-01-2007, 02:30 PM
 
Location: Charlotte,NC, US, North America, Earth, Alpha Quadrant,Milky Way Galaxy
3,771 posts, read 7,244,842 times
Reputation: 2118
Quote:
Originally Posted by goat View Post
Good Morning, I see many different opinions and/or calculators on how much of a monthly mortgage including taxes one should assume based on income.

What is a good, sound method to figure. Brokers could tell you anything.

We have no debt at all and I earn 52,000.00 annual. Would a mortgage of $1,300.00 be too high? What should I consider the top without getting into an iffy area. Thanks.

You should be okay- Assuming you're taxed at 33% you're take home minus your mortgage payment should leave you roughly $1500/mo to handle other expenses. Just put aside a reserve account for 3 months leaving expenses to cover the rainy days.
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Old 05-29-2007, 12:56 AM
 
3 posts, read 11,333 times
Reputation: 10
Default The home you want to purchase is it new or previous occupied

There are other ways to help reduce your housing expense. As is there other ways to increase you take home income that will allow you to make a mortgage payment. Please contact me, as it would be enjoyable discussing this topic.
My experience has been in the Mortgage banking field for the past 38 years.
Health and happiness
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Old 05-29-2007, 05:31 AM
 
Location: State College PA
402 posts, read 2,154,856 times
Reputation: 271
My husband and I make around 120K/year (gross), so the bank told us we could go as high as something like 420K, based on our debt (one car loan, one student loan).
HA!!! They don't consider the $1400/mo for child care and everything else that goes with children! We figured out we would be more comfortable going up to 230K or so, to still have some extra money (not tons) for fun.
Point being...make sure you put everything on paper...find out the bottom line before you make an offer. Things add up!!
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Old 05-31-2007, 11:26 AM
 
Location: Central Florida
800 posts, read 2,990,811 times
Reputation: 315
Quote:
Originally Posted by goat View Post
Good Morning, I see many different opinions and/or calculators on how much of a monthly mortgage including taxes one should assume based on income.

What is a good, sound method to figure. Brokers could tell you anything.

We have no debt at all and I earn 52,000.00 annual. Would a mortgage of $1,300.00 be too high? What should I consider the top without getting into an iffy area. Thanks.

Using standards, with your income, you'd qualify for a $1213 mortgage.

Anything out of the standards, causes the interest rate to be higher. With no other debt, you might not have difficulty with the mortgage BUT you have to look at the entire picture, not just income.
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Old 05-31-2007, 01:52 PM
 
Location: Wellsburg, WV
3,141 posts, read 8,834,809 times
Reputation: 3300
Quote:
We have a car payment of 386.00/month and our new mortgage will be 1420.00 but we are taking a 20 yr. vs. 30 yr. it will be very managable with my wife making 58k,
One thing to consider...

Can you maintain that mortgage with only one income? I realize that relying on one income means less house but what happens if one of you lose your job? Hopefully it won't happen but in today's climate, you can not count on a job forever. Liz
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