If you’re anything like me (and you’re blogging because you’re a writer and not a math person and certainly not a financial aficionado and – full disclosure – you failed 7th grade pre-Algebra) you get super overwhelmed at the flinging of numbers and all things calculator oriented.
Just when you thought you had this tax thing down, you decided to look into buying a home! Whether or not you pay more in federal and state taxes could make a big difference in the amount of home loan you’ll be qualified for!
THIRTY PERCENT – that’s the amount of your monthly income you can expect to pay for rent throughout the US currently. But it gets worse, in some historically higher markets, such as Los Angeles, San Jose, Miami and San Francisco, renters are forking over as much as 40% of their monthly income to landlords. While these markets have almost always been considered pricey by most, the 40% percent is a 10% point jump up from the usual rate.
But while circumstances are looking bleak for renters, homeowners are experiencing something entirely different. In fact, homeowners, overall, are spending only an average of 15.1% of their monthly income on their mortgage payment. This is a significantly lower number than before the real estate bubble (and the consequences thereof), when homeowners were spending around 21.3% of their monthly income on their mortgage payment.
While some fear that mortgage rates will soon rise, thus offsetting this large gap, according to Zillow’s quarterly report, even if rates were to rise to 6%, homeowners in most areas would still be spending less than 30% of their monthly incomes on their mortgage payments.
Are you interested in becoming a first time homebuyer? Download our free First Time Homebuyer’s Study Guide today.