Buying A Home
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
How much to spend on housing every month?
We are building a house that will cost 22 % of our monthly (net) income (including taxes and insurance). Are we paying too much for our house? We dont want to be house poor. We wouldlike to have kids in the futture and we have no idea how much to budget for them! Any advice would be great!
Re: How much to spend on housing every month?
You will probably get all kinds of varying opinions on what percentage your mortgage should be. I think most acceptable range is 28-33% of take home. By that measure, you're doing great. Cost of living will dictate if that's realistic.
I think that percentages are useless without considering your income. If you take home $1000 a month, 40% (for example) on housing wouldn't allow you to still pay utilities, car insurance, student loans, daycare, food, gas, etc. If you take home $20,000, you have more than enough money left to pay for other bills. The higher the income, the higher percentage you can consider. If your income is low, you may need to be more conservative than the experts recommend.
Can you meet all of your other financial goals after spending 22% on housing? If not, it might still be too much even though it looks good on paper.
Start living as if you are paying 22% of your monthly income on housing (put the difference you are currently paying into savings)
THe general recommendation is housing costs should be 25-28% of your TAKEHOME pay (mortgage, taxes, insurance, PMI, utilities and HOA) less if you have alot of debt and 30-35% if you live in a HCOL area.
If you plan to have kids - allow daycare expenses in your budget . If you plan to be a SAHM then plan the mortgage based on one income.