Hi All

At what point are you considered to be house poor?

When after paying your mortgage you have no money to eat, you have no money for clothes, no car.???

I estimate that 50% of my take home pay goes to my mortgage.

So am I considered house poor?

What % of your take home pay goes to your mortgage?? Do you consider yourself to be house poor???

Hope I am not being to newsy. I was just wondering.

Thanks,

acesfull

Hi

I forgot utilities, lawn care, HOA dues, upkeep.

keeping up with the community/rich neibors, etc

I guess I am House Poor.

acesfull

my MORTGAGE itself (including taxes and insurance) is under 10% of gross

Don't ask about the home improvement debt, though cause it pretty much more than doubles then LOL

I don't think it's ever worth it to try and keep up with anyone be it neighbor, family, friends, whomever. That's a vicious cycle because it's very hard to determine whether it is you keeping up with them or the other way around. It's usually one or the other at opposite intervals...

If you itemize your deductions, considering just the mortgage payment against your net income isn't really fair since you do get a benefit from that interest, taxes and insurance. Besides, think of it this way, you could be paying just as much in rent to pay someone else's mortgage, hoa, etc, right?

Hi Peek
That's great.
Sometimes I feel I am a slave to my home.
I love the place and all the community, the schools, etc
but sometimes I feel I work only to pay my mortgage company.
Oh well I guess I long for a simpler way of life. Living at home with mom and dad.

In NJ, the mortgage and escrows for property taxes and insurance took up 50% of my take-home pay. I felt house-poor then. It didn't help that my son wasn't doing well in the public schools and I ended up forking over a lot of money to send him away to a military boarding school. There was enough money to pay the bills and take care of necessary maintentance (for which I was grateful) but making improvements to the house was out of the question.

We live in Kansas now and mortgage, insurance and taxes are about 20% of my take-home pay. What a difference. And we have a bigger house, too.

One factor is the absolute dollar amount of your income, too, I think. If you have 50% of your take-home pay left over after you pay for housing, you're a lot better off if your THP is $10,000 a month than if it's $2,000.

Hi
I live in NJ, AC area. The taxes are brutal, 6k a year.I am in the casino industry so no chance of moving anytime soon. My THP is good, not quite 10k but decent.If I were to purchase a bigger home in my area,
then I for sure would be house poor. New homes in my area are starting at $459k with only 2400SF of living space.Thanks and take care
acesfull

I'd say if your mortage is over 3X your annual income, becoming a slave to the house can be a real possibility. we pay about 25% of our take home pay.

I feel it's when you don't have a descent amount of money left to save after your expenses every month.

Housepoor to me is not having any extra money when all monthly bills are paid for emergencies, savings, retirement and "fun".

Severe housepoor is if you can't even scrap up enough money to pay all your bills and/or food.

I've always seen "house poor" refer to people have less house than they could "afford" not MORE house than they can afford.

That's interesting, I've always seen it in the context of paying so much for your house it makes you poor

I am house-poor. I own no home.

well then people who rent can also be house poor.

maybe my point of reference is different but I recall reading some book that advocated being house poor; i.e., having a smaller, cheaper house than you can "afford" or at least not over-buying. in other words, if someone saw your house they'd think you were poorer than you are. the rationale was to invest money elsewhere and to maintain a good budget to avoid debt.

Every article I can find on house poor, refers to having too much house (mortgage and maintenance) for your income.

Millionaire next door?

I purchased my house in that bracket, but I was able to. I think in most areas people don't have that luxury as RE is so expensive whether renting or buying. I at some of the prices I see mentioned people pay.

My DH is stationed in Hawaii. I would SO love to live there, but the bottom line is we can't afford it. I really don't know how those folks make it.

If you don't mind answering, how big is your family? The "only 2400SF" comment just made me wonder.

I think house poor may be when you exceed that 35% DTI threshold banks use for mortgages.

Hi Heg!

Agree with ya on this.

Hi Peekaboo!

I always thought that being "house poor" meant buying much less of a house that you could "afford". We do that. While we could afford to live in a primo neighborhood, we like the one we settled into, and it is very nice. While we could "afford" a much larger home, we already have a 4/2/2. We spend < 10% DTI on our mortgage.

Of course, we own 2 rental homes and buy others to rehab.

Take care,
Skipper

Speaking as someone who used to be all to familiar with being "house poor". Peekaboo is correct with the "definition"

House Poor

Definition: [crh] People who are short on cash because most of their money is tied up in their homes are "house poor."

we are a family of three. present home is 2100sf. The home is 11YO when it was new it costs 185k
now the homes in my area are all built between 2400sf and bigger with a starting price of 459k.
What I meant by only 2400sf is that the new built homes are bigger and more expensive.
acesfull

That's me. I'm house poor.

At $500/month for taxes, you aren't "House poor"- you are "tax poor".
That is more than my entire house payment- including taxes and insurance.
I don't know how people pay those kind of property taxes without either choking or wanting to strangle someone.

NJ is so so brutal. The 6k a year that I pay is low compared to some.
My neibor has 4 bedroom, we have 3. They are paying $7800.00 per year. That's Jersey.
acesfull

I am in the market for a house, and being house poor is my biggest fear. I think I probably actually will be for a while, anyway. My lender is working hard to make sure I don't qualify for more than I can actually afford. Even with a decent home, I'll be paying over 50% of my income on mortgage (PITI) but this doesn't include the power bill, internet bill, water and trash bill, etc. With all of that combined I'm worried I will be in "house poverty!"

Interesting topic. I don't think I've ever heard the term "house poor" before, though I have heard "house rich - cash poor." Meaning you have plenty of equity but are otherwise struggling.

Hi All

You can't buy steak at the butcher's shop with home equity.

I guess it's just human nature, to want a bigger, better house in a great area for your family.
You stretch your income and sometimes you do without things like eating out or buying the most expensive bike for your child etc. An sometimes you regret burying yourself with a bigger mortgage payment.
I guess I would rather be house poor then be paying hugh interest rates on credit card debt on some expensive item I purchased that I can't even remember what that item was/is.
I have been in my home about 3.5 years now and thank God never have been late with a payment.
We always seem to find the mortgage money.
So, I OWE ,I OWE, so its off to WORK I GO. Later,
Acesfull

I'm house poor (meaning I spend too much of my monthly take home pay on mortgage + taxes + insurance - 48%). But we don't have car payments or CC debt. Having a nice house in a nice neighborhood is important to us so we make sacrifices in other areas - we hardly ever go out to eat, buy DS's clothes at second-hand shops, hardly ever buy ourselves new clothes, etc. We are also a one income family so even spending the median $ for a house was going to stretch it for us (I think our house cost right at median price when we bought it). We looked for less expensive homes but wouldn't have been happy. For example, we could have spent less money on a townhome but having a nice yard is important to us. We could have bought a house in a different town, but the schools here are good and we really like the atmosphere of the town. We could have bought a fixer-upper, but where would we live during repairs and how would we finance them? Etc, etc.

Besides, I don't plan on making the same amount of money I'm making now forever, so eventually I won't be house poor. Also, my monthly take home pay is slightly off - I'm paid every two weeks so most months that only means 2 paychecks. But there are 2 months of the year that I will get 3 paychecks. We are considering those bonuses and putting that money into savings. So, I guess my average monthly take home pay is higher than my "normal" monthly take home pay making my %-age spent on mortgage about 44%.

I don't worry because we're able to make all of our payments on time and still able to save quite a bit of money.

I'm right along with you. I am at home now, so with DH's base salary w/out OT it takes an entire check to pay both mortgages and taxes bill put into acct.

2nd check pays insurance/utilities/personal/food with some left for savings/emergency.

So I'd say we are very house poor! Probably 60% goes to home expenses.


It was different when I worked b/c I paid cable,phone,cellular,HOA fees and put in about $500/month into the house.

I'm right along with you. I am at home now, so with DH's base salary w/out OT it takes an entire check to pay both mortgages and taxes bill put into acct.

2nd check pays insurance/utilities/personal/food with some left for savings/emergency.

So I'd say we are very house poor! Probably 60% goes to home expenses.


It was different when I worked b/c I paid cable,phone,cellular,HOA fees and put in about $500/month into the house.
[/quote]

Always been curious: DH and DW? what do they stand for?

Only thing I can think of is Dumb Husband and Dumb Wife. But then I thought "why would somebody constantly call the person they choose to share their life with dumb?"

[quote name='Sparky82' date='Feb 19 2007, 01:49 PM' post='2083498']
I'm right along with you. I am at home now, so with DH's base salary w/out OT it takes an entire check to pay both mortgages and taxes bill put into acct.

2nd check pays insurance/utilities/personal/food with some left for savings/emergency.

So I'd say we are very house poor! Probably 60% goes to home expenses.


It was different when I worked b/c I paid cable,phone,cellular,HOA fees and put in about $500/month into the house.
[/quote]

Always been curious: DH and DW? what do they stand for?

Only thing I can think of is Dumb Husband and Dumb Wife. But then I thought "why would somebody constantly call the person they choose to share their life with dumb?"
[/quote]


DEAR husband and DEAR wife! You'll also see DS and DD quite often. Dear son and dear daughter.

[quote name='rvmitchell' date='Feb 19 2007, 02:55 PM' post='2083669']
[quote name='Sparky82' date='Feb 19 2007, 01:49 PM' post='2083498']
I'm right along with you. I am at home now, so with DH's base salary w/out OT it takes an entire check to pay both mortgages and taxes bill put into acct.

2nd check pays insurance/utilities/personal/food with some left for savings/emergency.

So I'd say we are very house poor! Probably 60% goes to home expenses.


It was different when I worked b/c I paid cable,phone,cellular,HOA fees and put in about $500/month into the house.
[/quote]

Always been curious: DH and DW? what do they stand for?

Only thing I can think of is Dumb Husband and Dumb Wife. But then I thought "why would somebody constantly call the person they choose to share their life with dumb?"
[/quote]


DEAR husband and DEAR wife! You'll also see DS and DD quite often. Dear son and dear daughter.
[/quote]
oh lol, it was alot funnier when I thought of it as dumb wife!

im going to be at 22.33% when/if I close on mine. i still feel housepoor. Im in TN, so income isn't much like peeks seems to be

Ok then, I am tax poor, too.

I've told DH I want to sell. Nice neighborhood but HOA dues and high taxes are killing us.

My annual tax bill is $5K. We have to save $425/month towards our tax bill for a home that we can only sell for $200K but the county raised our appraisal value 33% higher.

When I worked for a major shipping company, the drivers would laugh and talk about how many people in the prominent part of town with the big houses were house poor, meaning they had a huge luxurious house, but no extra money to actually furnish it.

I had to LOL @ that. My husband is an Enlisted Army Soldier! Trust me, we don't have it like that LOL
I bought a very inexpensive home that will be our retirement home. As I said, though, I have sunk a lot into it for the renovations, and that amount wasn't included in the Mortgage payment %. Still, all in all though, some people's car payments are more than my mortgage :S I was able to do this because I bought in a sleepy NC town that's far enough from the beach that the developers didn't drive prices up, but close enough that we will be able to enjoy the beach regularly in retirement years.

nice people to be making fun of their customers.

I will be house poor whether I rent or buy, so I might as well buy. That's the way I see it.

I'm looking at a total monthly payment of $650 (with escrow) and I make about $1200 a month (not counting child support because it's inconsistent).

My GF makes another $1200 a month but I am insistent on getting a one-income mortage payment, I don't EVER want to be in a situation where I cannot pay everything on my own, should one of us lose a job, or something else happen. My grandma is the primary borrow and will live with me too but won't FOREVER and I still need to know I can pay it on my own, for my own sense of security.

I read an article recently talking about the very lowest paid workers and how they cannot afford homes...

http://realtytimes.com/rtcpages/20060811_minimumwage.htm

Okay, fine, officially he's right, on paper anyway... but I'm wondering what the heck he thinks these people are paying in rent?? Does he think they all live with family or have some $300 a month apartment? Like those are everywhere?? Making $7 an hour and paying $600 plus for rent is the reality for MANY people, whether it works on paper or not.

I am really open to what neighborhood I live in, schools are not an issue, but I MUST have 3 or more bedrooms, that part is not negotiable. Needs to have some other flexible room, either a second living or dining or whatever, to use as a bedroom. The other non-negotiable part is I must be free to have my dogs, and one is a lab so most apartments are out as they only allow small dogs.

So in my town, even to live in a crappy neighborhood a 3 bedroom duplex, apartment, house, etc. is going to cost me more than my anticipated house payments. Even right now, with a slow rental market, I couldn't find something suitable for less than $750. My current place is just way too small, and the price is a one-in-a million thing at $565 a month. We could NOT find this again.

I get annoyed with income minimums and such too, whether it is a rental or mortgage loan requirements. If every place in town used that "income must be 3x the rent" rule I would not have been able to rent my last 3 places (all between $500 and 565/month). Most places DO, so I've always had to limit myself to renting from private individuals only and avoiding complexes or property management companies. Yet I've never been evicted, and manage to pay rent, utilities, food, support 2 kids, and even go to a dollar theater now and again, or out for pizza. I just don't spend on unneccesary stuff, know how to stretch a dollar, and we eat at home most nights. It annoys me that the rules and guidelines are so out of touch with reality for the working class.

Around here people that make $1200 per month w/kids typically get a lot of state help.
1: Free medical for kids, sometimes adults.
2: WIC
3: Food Stamps
4: Reduced utilities
5: If income is low enough section 8 housing.

I don't see how people making $1200 per month with kids would be able to do it w/o some sort of help.

My GF (or is that...DGF?) and I purposely didn't make ourselves house poor; our 135k house mortgage(s) with escrow, insurance, and HOA fees is about $1000-$1100/month and our gross income/month is probably $10000/mo combined. Of course, taxes, insurance, 401k contributions, etc. take a huge chunk of that so we don't net all tha tmuch...but I still can't imagine us buying a $300k house or anything like that. We pay about 300 extra on the mortgage every month but even that seems to barely make a dent, so we're looking at putting much much more towards our second loan as soon as we are 100% CC debt free...

I admire you guys and girls that are able to stretch your money much farther than we do. My mom did it somehow while I was growing up, but I still have a LOT of money management to learn...

Why do you carry a balance on CC's if you have a $10k per month income?
Depending on your interest rates you might be "going in the hole" by contributing to a 401k while paying on CC's.

Mine are all at zero percent. Hers (at very low interest rates) are being paid down dramatically and she isn't currently putting money in her 401k (new employer) - even then, she's down to about 7% util on revolving accounts. We've both gotten 100% better at PIF each month on our cards as well. Once these are paid off, we'll focus on increasing wealth and trying to take advantage of as many tax breaks as possible.

And even with the recent market "junk," the 401k return and tax advantages have far outweighed any CC related penalties I've taken IMO.

But I do totally agree...it's pretty easy to minimize returns or even go backwards if you don't pay attention. We're not perfect by any means, but like I said, we're getting better!

Free medical, most times, yes. For the kids. In my state the parent only gets that if they are pregnant and for 1 year after the birth of the baby. WIC is only for families with kids under age 5. Food stamps, depends on how many people in the family as to if you'll get it at 1200 a month or not. Reduced utilities? Never heard of that here. Section 8? Sure. It's not hard to qualify at all for that... your income can actually be pretty high.... but very FEW actually get it, and the wait lists in most cities are 3 years long or longer. Five years, last I heard in my city. Hopefully in five years I wouldn't need it so I never saw the point of getting on the wait list.

So what I am saying is that there are plenty families living on a parents wage of around $7 an hour with little to no state help. They do it because they have to, and it's just a matter or stretching until y ou t hink you're gonna burst and being frugal as hell.

That's obscene unless they live in the Hearst Mansion.

I'm "tax poor" income wise, but not cash wise. I'm getting the hell out of my house and city though.

Right now I'm paying $5,000/yr in property taxes too. No mortgage, but I've only been bringing it about $12k/yr (not including iras, appreciation, etc). I have substantial savings though. Car is also paid off, so savings isn't taking a hit.

Hey acesfull

At least you do not live up here in Northern Jersey. The taxes are now ranging from 6k in the ghetto to 30k in the upscale neighborhoods. That is why I am buying down south I thought about buying up here because I grew up here and make a nice living. But it is so not worth it to me. I would be in house trapped with no money if I bought up here by the time I could afford owning a house up here I would be retired. You should check out the casino industry in other areas as you would probably be less house poor.

I am very much like you in the sense that I HAVE to live in a decent neighborhood in a decent house. I am currently searching for a house (first time buyer) and I don't expect to live in a mansion but I WILL be picky, and I will most likely buy something right at what I qualify for. My mortgage payments will be a little less than half of my income, but this includes insurance and taxes. It's totally worth it to me.

After losing our home TWICE (first to a hurricane, the second to horrendous neighbors), I am bound and determined to find something I like in an area I like, whether that means less nights out with friends or not. My theory is that when I buy my house I am going to WANT to spend more time in it, decorating, doing things, having friends over, etc. If that means I get to buy less clothes, less "stuff" and go out less, then so be it. I predict I will get a 5% raise each year with my employer, so the income will only increase. My house payments will not. A nice home is worth it to me, as long as I know I can afford it

Ha! Here in TN if you are married, your foodstamps are cut by 75%. Only single moms get the full benefit (AVG $450/month for family of 4)

Reduced Utilities are only for disabled and senior citizens. MIFA here pays $200 in emergencies but utilities here run over $400/month avg for even a small 1,000sq ft home.

WIC is good. I used it when I was preg. and after having DS since DH was laid off and wasn't paid for a month when his company was closed by the LAbor board.

Again, SEc 8 is a looong waiting list and difficult for a family. USually for single women.

I've been asked numerous times why I didn't get on/am not on the section 8 wait list because the income limits are quite high actually. I did get on it when my eldest was a baby, and I went to a nearby small town to do it. It wasn't as bad; got on the list when he was a newborn and got called when he was 16 months old. I stayed on it for a while, until I married my now ex. It was very difficult to find property owners who would accept it though, and it relegated me to the 'projects' for the first year and a half. My mom got so frightened with me and my son living there that she found another rental (single family in a slightly better area) and paid the difference monthly that section 8 wouldn't cover.

Anyway, while it was helpful then, when my son was very young, it would be pointless for me now, I do hope to be earning much more by the time the wait list ever would address me, and besides, I imagine they wouldn't consider me and my GF and her kids/my kids a "family" anyway for housing purposes. We manage, and will continue to manage, and leave it for someone who CANNOT manage without the assistance.


There is something to be said for struggling and scrimping if you can manage to make it without big brother looking over your shoulder. I remember enduring the housing "inspections' where they looked in my closet for clothes and personal items that might have indicated I was having an unauthorized guess, and I remember how the neighborhood was full of folk who, if angered, would "calll housing" and make stuff up to get others in trouble. Oh, and the pests (as in bugs) that no one would do anything about! Ewwww!

"People do it" with careful (or none at all) spending.

Example:

$1200 a month in my area (San Antonio, TX)

Two bedroom apartment: $650 (if you know where to look)
Utilities: $150 a month (no cable TV and hopefully water paid)
Basic phone: $20/month
Food $300/month (yes, it can be done if you cook from scratch, for 3 people)
Gas/bus/transportation: $50/month

Total: $1170

Easy? Hell no. But I've BTDT (and on even less, actually)...but I wouldn't want to do it for long! A while back, when my girlfriend got laid off, she got UE benefits for a while but as it was a part time job to begin with the benefits didn't last long, and when this happened my ex also got laid off, and the child support stopped coming.... so for a short but horrible period we lived similarly with six people! In retrospect I'm not even sure myself how we did it, really. You do become VERY creative. Selling on eBay helped to fill in the gaps.

I've also rented 3 bedroom places for $500 and $550 a month (this current one is now $565, 3 bedroom), respectively and a 2 bedroom for $400 a few years ago. I didn't have to worry about schools because I drive my kids to a free charter school, so neighborhood has been less of an issue and frees me up to live where others "won't". Other people I've known have roommates, live with family, get some assistance (partial food stamps for example), hit the food banks/churches once a month, and thrift/garage sale shop EXCLUSIVELY when they have to buy something.

It's no fun scraping every penny to keep the lights on but it can be done.

I am hopefully moving into a house very soon that will have a payment just VERY slightly above my current rent, and I will be starting that endeavor with a LARGE savings/reserve, and build it up frantically, just for peace of mind.

(((((righteousbabe)))) to ya girl.

Please tell me what state you live in because I want a house payment like yours!




And this is VERY prevalent around where I live. I serve on a volly FD and we've been to some of the really really big houses... where they have NO furniture... and they've been living there for 3 years already!




If you think that's obscene, that's about the AVERAGE for modest homes in Monmouth County, NJ. Another reason I want out!