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How to spend a Halloween at home?

What's YOUR realistic opinion on the percentage of income to spend on your home purchase?

  • The banks like to say to follow the 28-36% rule (meaning your home payment should be that percentage of your income- i.e. your family makes $100,000/year, so you could spend 28-36,000/year on your mortgage, or 2,300-3,000/month). But you know what? We did that with our first little home & wound up "house poor", with hardly any disposable income left over after taking care of fixing & yard work, etc. It was horrible. And I suppose LOTS of other homebuyers got into trouble following that rule, considering all the foreclosures & shortsales, etc... SO, for all of you home owners, what percentage would YOU realistically recommend to people, to leave you comfortable enough for the other areas of your life (home repairs & decorating purchases, eating out, family vacations, saving in a 401k, car repairs & replacements, new babies, etc...).

  • Answer:

    A 2300 a month mortgage payment seems excessive unless you are getting some massive McMansion. What I would do is add up monthly income, deduct your expenses (food, water, electricity, etc etc), determine how much of what is left over you want to go toward savings and/or play money and then see what you have left.

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The figure is 30% of your Gross income. If you are making gross of $100k per year. That gives you a $8,333.33 per month Gross income. That would be based on that income and you could have a home mortgage of $2500.00 per month. And a gross income of $5,833.33 cents to make all of your other depts to deal with. That is the figures. I would be more comfortable with a 25% income on gross to a House payment. But that is me.

you are 100% about being house poor. I highly recommend that you don't spend more then 25% of your gross income. If you can do less, great. This would be on top of being able to save at least 10% EVERY MONTH. There is nothing nicer then being able to pay all your bills every month and money left over :)

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