I’ve been obsessively reading for the past week or two about how much of your gross/net income to be spending on Mortgage/Insurance/Taxes/HOA.

More conservative estimates were at 25% of your gross income.

Some others were saying up to 35% of gross income.

Super converstives estimated you should be spending 25% of your NET income, which is basically one weeks pay for me. That seems VERY conservative. I doubt most of Chicago is spending less than $1000 a month on rent/mortgage.

The most level headed of these arguments is that one should spend 28% of their gross income on mortgage and housing expenses and less than 36% of their gross monthly income on their overall debt.

In this regard, I have no other debt, so I’d only be worrying about how much this mortgage is gonna cost me.

If the price comes in at $355,000 (like I'm hoping) at an interest rate of 3.785% with 20% down, calculating about 1.5% in property tax and around $600 in homeowners insurance, plus $185 in HOA the monthly price for all of these things is $2019

Not calculating in my freelance work or overtime, I make around $2200 bi-weekly.

That’s about 28% of my gross income and nearly 50% of my net income per month, again, not counting any freelance or overtime jobs I do throughout the year. Also, not counting the tax return I’d likely get at the end of the year because I’ll now be able to write off the taxes and interest.

This leaves me with a minimum of $2300 a month for:

Electric
Gas
Food
Gasoline (I’d walk to work from this place)
Car Insurance
Cell Phone
Incidentals (Internet, Netflix, Dinner Out, Clothing, Gifts...)
Savings for Retirement
Vacations
Savings for Home Repairs

This seems doable to me, especially considering I’d be making more with overtime and freelance. Do you see any red flags here? Your opinion, obviously means a lot. I’m just getting my toes wet with this mortgage stuff and I don’t wanna reach too far.

Another option is putting down 30% up front to bring the mortgage payment down to $1852 a month. That gives me nearly $300 from the first paycheck of the month to use on utilities and incidentals, leaving my entire 2nd paycheck for everything else.

Thanks for any insight you may have! I really appreciate it.