Is this too much to pay for rent based on my salary?
I make 4k per month after taxes. I am considering purchasing a house that would cost me 1500 per month. It is a really nice house and location. Would I struggle too much living on 2.5k after my mortgage payment?
It is 1500 with taxes included. I do not have dependents I am single.
- Ya-HooLv 41 month ago
You'd be doing better than most people
- roderick_youngLv 71 month ago
The challenge will be whether you can get a loan, as that's right on the border of affordability. Taking on housemates can ease the burden, though. Interview lots of people, and do background checks. I set my rent below market, got 40 applications, talked to 20, finally picked the best two. None of the troubles that I've heard about with other people's boarders.
- RichardLv 61 month ago
Without knowing your financial status, it is difficult to formulate a guess
- curtisports2Lv 71 month ago
I need to know what your monthly income is BEFORE taxes. All lenders use gross monthly income, NOT take home pay. Take home pay has too many variables for it to be reliable.
If you gross $5k a month, a lender would allow you right about $1,500 a month for a mortgage payment that includes principal, interest and the monthly cost of property tax and insurance. They would allow you another $400 a month in other debt - car and student loans, credit cards etc. Go over $400 and the difference over comes off of the $1,500 and you can only get a mortgage for that amount.
Take your gross monthly income and calculate it yourself.
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- EvaLv 71 month ago
Add up all your expenses per month and make sure to add in some for repairs and maintenance on the home, then decide if you can afford it. Generally you would want to earn 3x your mortgage payment. If the $1500 includes taxes and insurance, you should be ok. If it doesn't you may struggle.
- Christin KLv 71 month ago
Your housing costs should not exceed 30% of your net income, to be good financial management. Yours is a bit high. If you have no other debts, this is do-able, but I wouldn't over-extend myself if I were you. Mortgage payments are only ONE of the expenses of home ownership--there are many others that will eat away at your remaining salary pretty quickly: taxes, insurance, utilities, transportation, repairs---lots and lots of expenses. MAke up a budget for yourself that shows what you spend on these things, plus all the rest: food, clothing, entertainment, etc.--and THEN calculate what you should be able to afford. And don't forget to include savings! When you own a house you will need a reserve of cash available for emergencies.
- SlumlordLv 71 month ago
You should be ok. What is your current housing payment? I'll bet its close to $1500. Do you have trouble with that? Should be fine if you make some effort to save money.
- JudyLv 71 month ago
would probably be ok if you don't already have a lot of debt.
- Pearl LLv 71 month ago
it might be if you cant afford it
- Anonymous1 month ago
Consider property tax, utililties, maintenance insurance of the house, car or transportation costs, hobbies. Is the 4k before or after tax and deductions?