It's been a few years but I've heard total loan debt should run 35% of income . So 28% for the house would leave you with only 7% for cars.

I believe that was the case back in the day prior to the subprime mortgage crisis. I think it's closer to the 28% number for total debt to income ratio.

Straight cash homey.

 

Believe that! Haven't had a car payment in over 20 years. For that matter my house payment is just a little more than what some make on their car.

I agree' date=' and think that is higher than it should be. Just what I've read. Mine calculates to 4.5%[/quote']

 

I am in the 6 to 7 range.

When we had a mortgage, ours was 17.7% of our take home. But that was also the only debt we had during the time we had the mortgage. And that was also on a 15 year note.

 

I think the length of the mortgage makes a difference in determining an appropriate percentage.

When we had a mortgage, ours was 17.7% of our take home. But that was also the only debt we had during the time we had the mortgage. And that was also on a 15 year note.

 

I think the length of the mortgage makes a difference in determining an appropriate percentage.

 

Exactly.

In related news, vehicle leasing is increasing. About 31% of new vehicles sold were leased in Q1.

 

That number may rise a bit until the manufacturers have to bring down the estimated lease-end value of the cars which will result in the lease payment going up a bit.

 

Leasing is a balancing act for new car manufacturers.

 

I bought my car as it came off of a lease in December. Worked out pretty well. I just upgraded to a 5 year maintenance warranty in case the previous owner didn't do things properly while breaking it in. So far so good.

Your monthly mortgage payment should not exceed 28 percent of your gross monthly income (your income before taxes are taken out). So, if you and your spouse have a combined annual income of $80,000, your mortgage payment should not exceed $1,866.

 

That would make me very nervous. You figure that leaves you $2800 to work with for the month. That is a lot of money going to the mortgage.

Your monthly mortgage payment should not exceed 28 percent of your gross monthly income (your income before taxes are taken out). So, if you and your spouse have a combined annual income of $80,000, your mortgage payment should not exceed $1,866.

 

A home listing for $250,000 at 4.5% 30 years would cost $1,266 PI. lets figure $600 more for Taxes and insurance. That would take you to the payment of the $1,866 you reference. No way would I be buying a $250,000 house if I was making a combined $80,000 per year.

A home listing for $250,000 at 4.5% 30 years would cost $1,266 PI. lets figure $600 more for Taxes and insurance. That would take you to the payment of the $1,866 you reference. No way would I be buying a $250,000 house if I was making a combined $80,000 per year.

And that's before taxes. :scared:

Keeping up with the Joneses...

 

Ain't that the truth. I'm reading "The Millionaire Next Door" and it's great with this kind of stuff.

A home listing for $250,000 at 4.5% 30 years would cost $1,266 PI. lets figure $600 more for Taxes and insurance. That would take you to the payment of the $1,866 you reference. No way would I be buying a $250,000 house if I was making a combined $80,000 per year.

 

At least not without a down payment.

I'm reading "The Millionaire Next Door" and it's great with this kind of stuff.

 

Great book.

A home listing for $250,000 at 4.5% 30 years would cost $1,266 PI. lets figure $600 more for Taxes and insurance. That would take you to the payment of the $1,866 you reference. No way would I be buying a $250,000 house if I was making a combined $80,000 per year.

 

I love low debt. I'm with you - couldn't do it. Couldn't sleep well worrying about it.

 

Hard to save money for the future.

We've leased my wife's last 2 vehicles. Not sure we will ever do it any different for her vehicles.

Avg used car loan is now $19k.