Current Events > I think they say your mortgage shouldn't be more than 28% of your monthly gross

(+) Yeah! (+)

But what about your net? Someone who makes 70,000 gross may not have the same deductions, 401k contributions, taxes, etc than their neighbor who also has a 70,000 gross.

So is there a magic percentage for net? As in, don't spend more than X% of your monthly net income on mortgage/rent?

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Bump

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Nope. And the worst part is that bills don't even get directly calculated into the equation sometimes, but they do other times. So it is inconsistent when they pull up your expenses for monthly expenditures.

They could approve you for a house at 25% but due to tons of non-debt bills, high income tax rate, and other contributions you could end up struggling to pay for that house.

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Zanzenburger posted...

Nope. And the worst part is that bills don't even get directly calculated into the equation sometimes, but they do other times. So it is inconsistent when they pull up your expenses for monthly expenditures.

They could approve you for a house at 25% but due to tons of non-debt bills, high income tax rate, and other contributions you could end up struggling to pay for that house.

I guess in this case it would be your responsibility to do the math to figure out if the house you're buying that equals to this amount of monthly payments, is in your budget or not.

Really curious what a recommended percentage of net would be though.

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you can't go by those. it just gives an estimate. depends on how much your bills, taxes, etc.

but the thing is pretty much no state you can afford a house on min wage. even a couple together can't afford it. that's why so many people struggle and live paycheck to paycheck.