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What % of your Income goes to Mortgage?

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  • What % of your Income goes to Mortgage?

    Edit, rephrased: how much of your gross income goes towards housing?

    Please indicate if you're responding at resident / fellow salary. Otherwise I assume it's attending.

    Background: we've been looking off and on for about 3 years. At first I was looking <1 to 1x income but none of them were good enough for the doctor. Now that we're about 2 years into attending salary I've opened it up to upwards of 2x, preferably 1.8x and he balks at the price. I get it, but I'm not the one nixing cheaper homes. Good thing I like our rental.
    Last edited by Tyche; 03-08-2020, 05:16 PM.

  • #2
    approximately 11% post tax dollars

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    • #3
      0.

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      • #4
        7.5% of post-tax dollars but that does not include property taxes...
        If you include property taxes then it increases to 9.6%
        Does not include homeowners insurance either... which is hefty due to fire risk in my area. (Would be up around 11.6% with insurance and taxes). Much less if we were talking pre-tax dollars...(back down to 7.75% for everything, if using pre-tax dollars).

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        • #5
          Originally posted by Peds View Post
          0.
          You're renting, right?

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          • #6
            Originally posted by SLC OB View Post

            You're renting, right?
            Yup.

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            • #7
              The metric you discuss is mortgage/gross income.
              But your question is % of income going TO mortgage.
              0
              Regardless, congratulations you have the doctor boxed in. Enjoy your apartment and your downpayment might grow to a cash purchase. Brilliant!

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              • #8
                Originally posted by Tim View Post
                The metric you discuss is mortgage/gross income.
                But your question is % of income going TO mortgage.
                0
                Regardless, congratulations you have the doctor boxed in. Enjoy your apartment and your downpayment might grow to a cash purchase. Brilliant!
                I think my question is clear even if it wasn't worded correctly ?

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                • #9
                  0
                  not renting

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                  • #10
                    0, paid off.

                    7% pre-tax when we last had a residential mortgage, based on required fixed monthly payments. To pay off within 4 years, we paid a lot more, around 30%.

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                    • #11
                      Originally posted by mapplebum View Post

                      I think my question is clear even if it wasn't worded correctly ?
                      Not really. Gross is the correct metric, and 2 ppl responded post tax....what taxes?

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                      • #12
                        Originally posted by Peds View Post

                        Not really. Gross is the correct metric, and 2 ppl responded post tax....what taxes?
                        Yea I assumed the understanding was gross and if renting, sure, say what %. Same with those that are paid off.

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                        • #13
                          9% principle and interest over gross.
                          also it is a 15 year mortgage. If I went with a 30 year it would have been 6%.

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                          • #14
                            48 yo AIM: 60yo retirement

                            Income: 25k
                            $ to retirement fund this year: 4.5k - down from 6k previous years since now FI
                            taxes: 9k
                            take home: 11.5k

                            Mortgage 3k
                            Insurance + taxes - 1.25k

                            so math on takehome:
                            4.25k/11.5 = 48% of take home

                            --Skewed since we also have income flow coming from 2ndary sources (Real estate and 2ndary business) -- so that's another ~4-6k/monthly coming in that we've increased spending burn to accommodate


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                            • #15
                              Our 15-year mortgage payment (PITI) is about 5% of gross income. (Which gross, business income or AGI? ) In general I do feel like it's a great idea to buy as little house as you can get away with/be happy with, put as much down as you can afford, and get the shortest mortgage term you can afford. Housing (and its maintenance, upkeep, and furnishing) is not a high-priority way for us, personally, to divert funds away from retirement saving.

                              I also think that income multipliers are a pointless way to judge affordability. I think I've made this analogy before, but it's like the three months salary rule for engagement rings. Even if it weren't a construct of the diamond industry, it would completely fall apart at high incomes. I would SHOOT my husband before I'd accept a piece of jewelry worth even one WEEK of income. There's a range within which "if you can afford more buy more because it's value-added." Above that it's 100% a luxury purchase that needs to be gauged alongside your own family's priorities and trade-offs. Let's say that limit is around 150% of the median home price in your area. Above that price point, quit talking about income multipliers and start talking about making a six-figure purchase plus interest. (IMO!)
                              Last edited by spotty_dog; 03-08-2020, 05:41 PM.

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