How much debt do you have?

[OneBuckeye]

Monthly debt obligations. As a percentage of your gross income.

Currently we have 14%. Including two cars and school loans. We are looking at houses that will take us to the 30% range. Is that too much? Just curious what other people are living with and how it is working out for them.

The houses we are looking at would put us at 28-29% range. We could probably pay off her school loans in 5-10 v 10-15 years if we got a house half as cheap, but there really isn't anything in that range for the area we are looking at.
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[Mac]

I think a good income to mortgage ratio is no more than 20-25% of your income. Obviously lower the better.

Mrs. Mac and I are right in the middle of the above percentage. Mrs. Mac's school loans add on a other 20-25% :(

 

[Mike80]

If I didn't have the house I no longer actually live in, I'd have virtually no debt other than a car loan that has exactly 6 payments left.

Once I get rid of the house, it's on.

But as Mac said, try to stay within the 20-25% range of your monthly income for your mortgage only which it sounds like you are doing if you're going from 15% to 30%.

 

[OneBuckeye]

I think a good ratiissue mortgage is no more than 20-25% of your income. Obviously lower the better.

Mrs. Mac and I are right in the middle of the above percentage. Mrs. Mac's school loans add on a other 20-25% :(

Dang so you have 40-50% debt? How is that budget wise? Are you able to save a decent percent?

 

[DubCoffman62]

Right now I have zero debt, house and cars are paid for and I have zero loans to pay off. I don't owe anything to anyone.

 

[Mac]

Dang so you have 40-50% debt? How is that budget wise? Are you able to save a decent percent?

It sucks but we are still able to save each month.

We are in debt pay off mode, so we aren't making any big purchases right now/traveling/etc

 

[muffler dragon]

Monthly debt obligations. As a percentage of your gross income.

Currently we have 14%. Including two cars and school loans. We are looking at houses that will take us to the 30% range. Is that too much? Just curious what other people are living with and how it is working out for them.

The houses we are looking at would put us at 28-29% range. We could probably pay off her school loans in 5-10 v 10-15 years if we got a house half as cheap, but there really isn't anything in that range for the area we are looking at.
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I would suggest you don't buy a house till you have the cars and loans paid off. There's no reason to be in a hurry as housing prices aren't going to spike upwards any time soon.

 

[Bucknut24]

I gots student loans...and I make 0 monies right now



life sucks

 

[Mac]

I think a good income to mortgage ratio is no more than 20-25% of your income. Obviously lower the better.

Mrs. Mac and I are right in the middle of the above percentage. Mrs. Mac's school loans add on a other 20-25% :(

It sucks but we are still able to save each month.

We are in debt pay off mode, so we aren't making any big purchases right now/traveling/etc

To help matters we're both looking for new jobs. Both have gained experience and so now it's time to move on and move up

 

[OneBuckeye]

I would suggest you don't buy a house till you have the cars and loans paid off. There's no reason to be in a hurry as housing prices aren't going to spike upwards any time soon.

I understand. Here are the issues.

1. We will be 28 this year and are tired of living like college students in an apartment with hand me down furniture, especailly the wife and she insists that we are buying a house.
2. We currently pay 1200 in rent
3. Intrest rates may spike.
4. We have 10% down payment and could easily pay the cars off with that plus a small small chunk of her student loans.
5. No savings beyond that 10%
6. She wants to buy a 300K house!

 

[Best Buckeye]

I understand. Here are the issues.

1. We will be 28 this year and are tired of living like college students in an apartment with hand me down furniture, especailly the wife and she insists that we are buying a house.
2. We currently pay 1200 in rent
3. Intrest rates may spike.
4. We have 10% down payment and could easily pay the cars off with that plus a small small chunk of her student loans.
5. No savings beyond that 10%
6. She wants to buy a 300K house!

You can easily buy a house but I would caution you about buying one where you would pay $1,200. in payments. You would do better to get one where the payments would be $800. You should be able to get a nice home for that.
I would advise you to work your way into that first house so that you and the Mrs. can see what all is involved. Then later on you can go for the pricier house if you wan to.
Abig thing to remember is that the two of you have no idea of how much it's going to cost you to make repairs and changes once you move in. And you can depend on one other thing too, that is the amount of time and money you will spend keeping everything working will keep you hopping.

 

[Piney]

Monthly debt obligations. As a percentage of your gross income.

Currently we have 14%. Including two cars and school loans. We are looking at houses that will take us to the 30% range. Is that too much? Just curious what other people are living with and how it is working out for them.

The houses we are looking at would put us at 28-29% range. We could probably pay off her school loans in 5-10 v 10-15 years if we got a house half as cheap, but there really isn't anything in that range for the area we are looking at.
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Right now I am at 35% debt. That's a mortgage (plus real estate taxes), 2 car payments and a few years left on old student loans. In 5 months that drops to 30% when my car is paid for (leaving the wifes car payments)

My suggestion... don't look at percentages(don't ignore them though), look at straight dollar figures. Do some legwork on how much your bills will be with a new house and start adding things up. Feel free to overestimate costs so you have an extra cushion.

Also, make sure you set aside house expenses as part of your budget. With a new house you will need extra money to make the house yours... by either painting projects, landscaping, furniture, appliances, etc...

Factor in future expenses too if you plan on having kids, vacations, major purchases...

In the end, percentages are a good place to start. But percentages can be deceiving depending on how much you make

 

[Mac]

I understand. Here are the issues.

1. We will be 28 this year and are tired of living like college students in an apartment with hand me down furniture, especailly the wife and she insists that we are buying a house.
2. We currently pay 1200 in rent
3. Intrest rates may spike.
4. We have 10% down payment and could easily pay the cars off with that plus a small small chunk of her student loans.
5. No savings beyond that 10%
6. She wants to buy a 300K house!

1. That's what we did, "time to grow up"
2. That's a lot of $ being thrown away, put that towards something building you equity
3. Ehh, not likely. Don't see that happening for a while. In fact I'd venture to say it'd gradually climb.
4. That's a good downpayment
5. Don't use all of that for downpayment, or even close to all of it.
6. Stupid move. That's why foreclosures grew exponentially. No reason to bite off so much. Like others stated above, you have to factor in repairs, updates, maintenance, etc

 

[southcampus]

I understand. Here are the issues.

3. Intrest rates may spike.

This isn't true. Not for at least a year or two.

 

[muffler dragon]

I understand. Here are the issues.

1. We will be 28 this year and are tired of living like college students in an apartment with hand me down furniture, especailly the wife and she insists that we are buying a house.

I understand. Just giving a little bit of caution, because it ain't all raspberry frogurt and scones. Seriously.

2. We currently pay 1200 in rent

Which isn't horrible. It's not great, but it's not wretched.

3. Intrest rates may spike.

As others have stated, not likely. Furthermore, I doubt that housing prices have bottomed.

4. We have 10% down payment and could easily pay the cars off with that plus a small small chunk of her student loans.

Then I highly suggest you take that route. The additional expenses of a house are nothing to sneeze at.

5. No savings beyond that 10%

Then this would be stage two after paying shit off. Make sure you have about 3-6 months worth of salary saved up.

6. She wants to buy a 300K house!

Horrible idea. Looking at mortgage of $2000/month (or so), plus insurance and property taxes. Not to mention all the things that you'll want to do to the house, because even if it's move-in ready, you and the spouse WILL HAVE TO make it yours.

Ultimately, there are no guarantees. You can hope that the house you buy builds you equity, but it can just as easily shit all over you. It's happened to me twice. Had to pay someone to buy my first house, and now I'm going through a foreclosure. Being out of debt is not a bad thing, and I highly suggest you take that route.