Suburbanites! What multiple of your income did you spend on your house? (Houston: loans, how much)

[deckhanddavy]

About 1.7%. But, we put down 150k on our home, so that percentage is more like .8%. A bit unordinary, but 30yr interest is usually more than the cost of the home, so we are trying to save quite a bit of cash in the long run. We used to own an inexpensive condo for a couple years and were able to save quite a bit before upgrading to a house. Also, we are on our first year of ownership, so we'll be paying double mortgage this month to decrease it even further and offset the interest. A tip a few realtors suggested to us.

Our mortgage is a little over 9% of our income. Sadly, our taxes cost more than our mortgage...

[Faster10154]

So I spoke with friends as well, loots like 25% of net monthly take home looks like the magic # amongst them. This should include Principal, Interest, Taxes, and Insurance (PITI).

[texdav]

Originally Posted by predatorprey

Bought 2x income, but had 20% down. So loan was much less than 2x income.

I think what is more important question you and your wife should ask is what is my loan value vs annual income. Don't let that go above 2x income unless you want to live off rice and beans. Don't care what banks say.

Yet what you can put down is important also.

[deckhanddavy]

Originally Posted by Faster10154

So I spoke with friends as well, loots like 25% of net monthly take home looks like the magic # amongst them. This should include Principal, Interest, Taxes, and Insurance (PITI).

Hmm, was the OP referring just to mortgage? Taxes and insurance tacked on could almost triple the mortgage rate for some folks, I think...not sure if PMI is separate from normal home insurance? I don't escrow, so maybe that's a little different...Anyways, after some number crunching with mortgage calculators, I came up with the following.

If a couple made a combined income of 100k, then their take home would be approximately 75k or less after taxes, healthcare, retirement, etc..

Monthly take home is approx $5650

25% of $5650 is roughly = $1413

Seems that a 180k home is pretty doable. After 20% down (no PMI), with a 5% interest rate, 3% tax rate, and $1200 annual insurance, total monthly payment is $1408. That's not including HOA, so it could go up a little...

[davidtk]

Purchased my home 2 years ago at 2 times my income, but I put 50% down, so my mortgage was equal to my income. My income has tripled since then, so my purchase price is around 2/3 of my income now.

[houstonfan]

Sorry to rain on this parade but I feel this is a pointless discussion. Everybody's financial situation, housing needs, and comfort level is different. You cannot compare a % of someone who makes 50k a year to someone who makes 500k a year. If the OP, who supposedly works with money in his day job, can't figure out how much house his family should get, then he probably shouldn't be buying a house yet. Averages mean squat if you are not the average person.
The better questions would be, what costs and pitfalls should he figure into the overall housing cost and what advice would other owners give him? He had a lot of great advice to those questions in another thread.

[chris_ut]

I think that numbers may be skewed lower here since the average poster on this forum seems to have an above average income and as someone pointed out the higher your income the easier it is to get away with a lower multiple.

[davidtk]

Originally Posted by houstonfan

Sorry to rain on this parade but I feel this is a pointless discussion. Everybody's financial situation, housing needs, and comfort level is different. You cannot compare a % of someone who makes 50k a year to someone who makes 500k a year. If the OP, who supposedly works with money in his day job, can't figure out how much house his family should get, then he probably shouldn't be buying a house yet. Averages mean squat if you are not the average person.
The better questions would be, what costs and pitfalls should he figure into the overall housing cost and what advice would other owners give him? He had a lot of great advice to those questions in another thread.

Agree with you 100%. Each person needs to evaluate their own situation. However, I've always been curious about how much people spend on their houses and cars as a ratio of their income, so I find the thread interesting. But I definitely wouldn't make a purchase decision based on it.

[stan4]

Originally Posted by Faster10154

When you purchased your most recent home, what multiple of income did you spend on the final home price?

For example, if your home was $200,000 and your income was $50,000, you spent 4 times (4x) your income.

Yes, I'm still researching (for those of you who are looking at my previous posts) so please avoid comments like "it shouldn't matter what someone else does", or "each individual's situation is different". I'm simply trying to get some statistics for the suburban homeowners in the greater Houston area.

Thanks for all your helps guys!

I think my wife and I are considering spending no more than 3x our income. Just wanted to know where that stands amongst other Houstonians.

My mortgage is equal to my income, but that's because we put 45% down.
So this calculation can be affected by other things.
Not to mention property taxes and insurance, depending on where you live.

[Texascrude]

Originally Posted by davidtk

Agree with you 100%. Each person needs to evaluate their own situation. However, I've always been curious about how much people spend on their houses and cars as a ratio of their income, so I find the thread interesting. But I definitely wouldn't make a purchase decision based on it.

I'd keep this as low as possible. I know everyone has their vice, but I just can't fathom spending anything more than the bare minimum on an asset that depreciates 80% in just a few short years.