What percentage of your take home pay goes to your monthly housing payment?

[amylevan]

20% right now, but we’ve been paying a mortgage for 20 years so that number has changed between houses (went up with our current house) and has gone down as our pay increased.

That said, we’ve also increased our 401k contribution to max out over the years, which affects our take home, which changes that percentage of take home since you’re saving first.

All that to say, I’m not a fan of percentage of take home as an affordable calculation. Figure out your take home, your expenses, your savings and what you’re left with is what you can afford.

 

[CaptainAmerica]

Technically, those who can't itemize get a bigger tax break from the standard deduction than those who itemize because the deduction is the same whether you have a mortgage or not up to that point. My standard deduction is far higher than the $4000 I would have in deductions if I itemized, so it's a tax break I don't deserve because I don't have the expense to create the tax break.

The worst off from a deduction perspective are the people whose itemized deductions roughly equal the standard deduction.

I'm describing myself .

 

[Christine]

It's about 20% of my "new" net pay. My husband retired last year so at that point it was about 12% of our net but our income has gone down, so here we are.

 

[mrodgers]

The worst off from a deduction perspective are the people whose itemized deductions roughly equal the standard deduction.

I'm describing myself .

I was a home owner prior to the standard deduction rising so much. I think it was $12,000 for married and it's now $24,000 by myself. We always hit right around the standard. I itemized the year we bought the house because of the points you pay for the interest rate and I had a little above standard only because I had donations that I could claim. I think it put me $100 over standard.

 

[wenrob]

there isn’t a tax break here in the USA either unless you have a really high mortgage.

Yeah, this went away several years ago. Doesn’t make itemizing worth it anymore.

 

[CaptainAmerica]

I was a home owner prior to the standard deduction rising so much. I think it was $12,000 for married and it's now $24,000 by myself. We always hit right around the standard. I itemized the year we bought the house because of the points you pay for the interest rate and I had a little above standard only because I had donations that I could claim. I think it put me $100 over standard.

Yeah, this went away several years ago. Doesn’t make itemizing worth it anymore.

I have about $10,000 in interest, $10,000 in SALT, and $6,000 in charitable contributions so I'm right at the break even point on itemizing.

My actual state and local taxes are closer to $20,000, so the SALT cap of $10,000 really screws me.

 

[descovy]

I think this thread will confuse you even more! Some say 0% (where the heck do they live with zero property taxes or insurance?) Some use their net, some use their gross. Some just want to make a comment to prove how thrifty they are too.

My husband and I are in the process of relocating and have talked to a banker recently. Their rule of thumb is 30-45% gross income that includes PITI and any installment loans (like car loans)

On one hand you can say we all have different take home incomes. On the other, it makes the math easy. For your $200k that would be income of $16,600/mo. $5000- /mo at 30% seems to be a good target. If you have a couple of $500 car payment then call it $4000.

Ok, so now take that $5000 and mock up your real monthly budget. Is there room in your take home pay $5000 once you add all your actual expenses? Let that be your guide, more than the wild and crazy responses here.

 

[dez1978]

0% We built what we had the $ to pay for and had lots of people who owed us favors from when DH did construction so we basically just paid materials and very little actual labor.

I think property tax is about $800/year and insurance is maybe 1200/year. so still a very small % even including that.

 

[mmbrad02]

Ours is 9% with about 6 years left till its paid off. We are 41 years old. We originally financed at 30 years, then when it was down to about 21 years, we refinanced it to a 10 year loan.

To be fair, we live in a low cost area, and we bought it from a master commissioner sale (bank had taken back ownership) and we did a TON of work ourselves. DH and I both work and live conservatively and many times I've wanted to sell and buy bigger, but honestly LOVE the idea that our house will be paid off as DD is going to college.

We do have a HELOC set up (currently at $0) that we used to put new vinyl siding on our house a few years ago, and want to utilize that again to finish our basement in the near future.

 

[OhDannyBoy]

20ish% and we own .Just bought this one last year.

 

[ronandannette]

I answered early before the question was clarified further. Our property tax, condo fees, insurance and utilities add about an additional 10% of our net income going to housing costs. Condo fees are the largest chunk of that - about a quarter again as much as our mortgage and boy, do I feel lucky with how low our property taxes are compared to what some of you pay.

 

[CaptainAmerica]

I think property tax is about $800/year.

My property tax is more than $800 per month.

*Weeps softly to myself.*

 

[dez1978]

My property tax is more than $800 per month.

*Weeps softly to myself.*

Holy crap.. Where do you live???

 

[soccerdad72]

My property tax is more than $800 per month.

*Weeps softly to myself.*

Same here - I just paid our 6 month property tax bill yesterday. Just a little under $5k.

 

[AndreaDM]

Just under 20% including taxes and insurance.

 

[CaptainAmerica]

Holy crap.. Where do you live???

Connecticut.

It's a nice house, but not a mansion or anything... Bought at $500K, now worth probably about $600K.

Annual Property Taxes:
Home: $9,704
Newer car: $635
Older car: $319
Small camper: $224

Total: $10,882

Plus state income taxes of about $9,000.

 

[ronandannette]

My property tax is more than $800 per month.

*Weeps softly to myself.*

Oh good gravy...that would put homeownership out of reach for us. I just got our 2022 municipal property assessment. Values have taken a beating over the past 4 years and we’re down about 15% from what we actually paid seven years ago (around $400K) but even with a rate hike this year the annual bill will only be about $2,700.

 

[dez1978]

Connecticut.

It's a nice house, but not a mansion or anything... Bought at $500K, now worth probably about $600K.

Annual Property Taxes:
Home: $9,704
Newer car: $635
Older car: $319
Small camper: $224

Total: $10,882

Plus state income taxes of about $9,000.

good grief thats a lot. Do they assess on the actual value of your house? Bc what our house is assesed at vs what it's actually worth are very different

 

[ronandannette]

Connecticut.

It's a nice house, but not a mansion or anything... Bought at $500K, now worth probably about $600K.

Annual Property Taxes:
Home: $9,704
Newer car: $635
Older car: $319
Small camper: $224

Total: $10,882

Plus state income taxes of about $9,000.

Again I’m almost hyperventilating and they’re not even my cars! Why do you have to pay annual taxes on them? How do they assess the value of such rapidly-depreciating asset? Here we pay 5% federal sales tax on chattel (which is what vehicles are considered) when they are acquired. After that, it’s only a modest annual provincial licensing fee (a little under 100 bucks per tag regardless if the value of the vehicle).

 

[CaptainAmerica]

good grief thats a lot. Do they assess on the actual value of your house? Bc what our house is assesed at vs what it's actually worth are very different

They assess based on some formula. Market value is $600K, assessed value is something like $300K, then a mill rate of 33.4 is applied to the $300K.

And our mill rate is pretty moderate for Connecticut. Some towns get up into the 40s and 50s.