Money Minute: Housing budget

Money Minute: Housing budgetMoney Minute: Housing budget

Financial experts seem to agree that if you rent, you should spend no more than 28 to 30% of your gross salary.

If you own, lenders like to keep it at 28%.

A lender told KSTP, however, that there are many buyers going above that ratio.

For example, if you’re paying for a close to median-priced $375,000 home in Minneapolis on an $80,000 income, that’s taking 33% of your gross income, which leaves you a house payment of $2,171 a month.

To reach that 28% number, you’d need about an extra $300 a month.

“You can reduce spending, but it’s not going to change the ratio, but it might make that house more affordable,” said Shannon Doyle, with LSS Financial Counseling.

To try and save money monthly, you can reduce spending on streaming, eating out and other subscriptions.

One mortgage lender added that you could also take on a roommate.

These are just a few options to move around your budget in order to get that ideal 28% housing ratio.
The post Money Minute: Housing budget first appeared on KSTP.com 5 Eyewitness News.