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

[Cheburashka]

Thankfully our house is paid for, because we wouldn't be able to afford it now following those rules.

This is the key issue. The recent explosion of inflation in the housing market. Prices in my area have literally DOUBLED in the past five years, with most of that increase taking place in the last 2 years. I can't move to a different region for custody reasons. I'm single & after a long term relationship break-up had to buy a house at the height of the market frenzy last summer. Small but nice enough house in a less convenient area than I lived before. Thanked my lucky stars that I was able to get even this in the crazy market (I gave the former owners a rent-free, two month lease-back.) Spending over 50% of my income on housing including the stratospheric property taxes in my no income tax state. It's a new 30 year mortgage & I'm 47 with a chronically sick teen. Not happy. I'm trying to make double mortgage payments each month so that I can have it paid off in 15 years so I can eventually retire. I'm also going to grad school to try to move up the ladder and earn more. Life is hard when you're alone & in a low paying field in a rapidly gentrifying area (my hometown & nowhere near either coast).

The kind of people who preach about how little you should spend on housing have never been in my shoes and never will. Most of them have two incomes. More importantly, virtually all of them bought their homes before the recent market explosion.

Aside from the house, I have no debt & my credit is excellent, so I'm doing the best that I can. Being financially disadvantaged is not my fault, unless you think people should be punished for pursuing a lifelong dedicated career as a schoolteacher (taught in person in fall 2020 when most people were hiding at home & there were no vaccines), punished for having the child of a deadbeat instead of succumbing to his pressure to have an abortion, and punished for skyrocketing housing inflation (I'll admit the upside is that my house is now worth 12% more than it was when I bought it 5 months ago, but that's small consolation when you're not in a position to sell & are also on the hook for property taxes).

Bad things happen to good people. Don't let anyone shame you for having financial challenges, including having to spend a lot of your income for a decent home in the hyper-inflationary world we live in today.

 

[dvcgirl67]

Another "cost" that I am sure you have thought about is home maintenance & repairs.

Yep...and while I see people talking about that in this thread, sometimes the costs are really big. And there's just ongoing maintenance. We had a really big expenditure in 2019 when we realized that we had a mold problem in our 100+ year old home. We had to have the outer walls waterproofed...so digging down around our entire foundation. Then the basement floor replaced. Then while we were at it, the interior 100 year old sewer pipe replaced, which led to finding out our sewer line to the street had collapsed. On and on it went. We put in new basement windows and so just decided to do all those while we were at it. 40K+ later we had a really dry basement and a headache gone..and new windows for the house. But not cheap.

We've been here for 15 years. We had a persistent leak in one of our skylights....replaced both for $2,500. We've had to replace our main A/C unit once as well as our split duct unit in the attic where my husband has his office. Washing and dryer replaced once. Hot water heater once...$1,250. We've spent about 15 grand having the interior painted twice, first when we moved in and again in 2019. We spend $600 a year for pest control. About $1,000 to have the gutters cleaned out a couple of times. We also have a lawn/fertilizer guy, but honestly, we could do that ourselves. Still, being a homeowner does not come cheap...at all.

However, we do have 675K in equity in this paid-off home and one option we're toying with is renting our place out in our early retirement years. We plan to move around to different parts of the country and likely in Europe as well for 6 month to year long stays in various places. DH may still be working at the end of his career when we do this, and if that's the case we'd need a one bedroom unit so he could have some privacy to work, but otherwise we could do with a studio. Currently, rents in our town have skyrocketed....roughly $3,000 for a 800 sq. ft. one bed/bath apartment and up to $4,000 for a 2 bed/2 bath. Houses like mine are starting at $4,500 a month. So, if we did rent our place out we'd net roughly 3K a month, which is a fair amount to play around with if we're only looking for a studio/one bed-bath.

 

[Darcy03231]

.06% for mortgage only and we own. We have the money to pay off our mortgage, but our investments are making more than the interest rate on the loan so we haven't paid it off.

 

[Jeannie]

No mortgage here, but our property taxes and homeowners insurance come to about $14k a year.

OP, if you're wondering about what is 'real life affordable', use the 28/36 rule when you're ready to buy. We did this 30 years ago buying our current house, and my daughter did this past year. Realtor/Banks were telling my daughter and SIL they qualified for a much higher loan then they would be comfortable with. They stuck with 28/36 when running numbers on their own. https://www.omnicalculator.com/finance/28-36-rule#what-is-the-2836-rule-of-debt-ratio

 

[Mariearistocat]

0. I bought less house than I could afford, so paid it off in 15 years. That’s what I would recommend. Calculating what you can afford to repay in 15 years.

We just paid ours off in 10.5 , it's such a great feeling because our payment was close to half of our take home pay. We had a 30 year and kicked around refinancing to a 15 year when rates dropped. We never got around to it and would just pay extra by throwing $500 on principal every month, also extra payments a couple of times a year. The clincher was when our bank sold our mortgage to some weird never heard of before company that I read bad info about when I started researching. We envisioned lost payments and issues having our taxes and insurance paid, plus I missed seeing it on our online banking profile. We are saving around $700 a month in interest alone. I started my own escrow account for insurance and taxes etc.