Why Don’t Mortgage Calculators Factor Tax Break?

[WaitingToExhale]

[quote=temeculaguy]One of the reasons it doesn’t factor it in is because the qualification percentage is based on GROSS income. The formula has been used for a long time and is time tested for repayment success. …

…. Try and stay under that number by either waiting for your income to rise, the price of the house to fall or look for a cheaper house.[/quote]

TMG, you are exactly right, and this has been our plan. We have no problem qualifying, but as we all know it was “qualifying” but not truly being able to afford that got the world into the mess it is currently in. I’m just incessantly running numbers.

Fortunately, my wife puts up with it all.

[OwnerOfCalifornia]

I owned a house in a state with no income tax, and the sum total of my itemized deductions did not exceed the standard deduction; hence no tax benefit whatsoever from property tax or mortgage interest deduction.

But this is California. I’m sure most Piggs will have no problem exceeding the standard deduction based on state income tax alone.

[OwnerOfCalifornia]

I owned a house in a state with no income tax, and the sum total of my itemized deductions did not exceed the standard deduction; hence no tax benefit whatsoever from property tax or mortgage interest deduction.

But this is California. I’m sure most Piggs will have no problem exceeding the standard deduction based on state income tax alone.

[OwnerOfCalifornia]

I owned a house in a state with no income tax, and the sum total of my itemized deductions did not exceed the standard deduction; hence no tax benefit whatsoever from property tax or mortgage interest deduction.

But this is California. I’m sure most Piggs will have no problem exceeding the standard deduction based on state income tax alone.

[OwnerOfCalifornia]

I owned a house in a state with no income tax, and the sum total of my itemized deductions did not exceed the standard deduction; hence no tax benefit whatsoever from property tax or mortgage interest deduction.

But this is California. I’m sure most Piggs will have no problem exceeding the standard deduction based on state income tax alone.

[OwnerOfCalifornia]

I owned a house in a state with no income tax, and the sum total of my itemized deductions did not exceed the standard deduction; hence no tax benefit whatsoever from property tax or mortgage interest deduction.

But this is California. I’m sure most Piggs will have no problem exceeding the standard deduction based on state income tax alone.

[an]

I gets quite complicated when you take tax deduction into consideration. Not only do you have to subtract the standard deduction, but then you have to ad the things you can write off, since you’ll be itemizing.

[an]

I gets quite complicated when you take tax deduction into consideration. Not only do you have to subtract the standard deduction, but then you have to ad the things you can write off, since you’ll be itemizing.

[an]

I gets quite complicated when you take tax deduction into consideration. Not only do you have to subtract the standard deduction, but then you have to ad the things you can write off, since you’ll be itemizing.

[an]

I gets quite complicated when you take tax deduction into consideration. Not only do you have to subtract the standard deduction, but then you have to ad the things you can write off, since you’ll be itemizing.

[an]

I gets quite complicated when you take tax deduction into consideration. Not only do you have to subtract the standard deduction, but then you have to ad the things you can write off, since you’ll be itemizing.

[SK in CV]

Yes, you are missing something.

The calculation DOES factor in the tax deduction.

If the tax deduction was not factored in, the limit would be lower than 28%. It factors in everything. Cost of food, clothing, transportation, entertainment, and yes, taxes too. It factors in everything that isn’t principle on the loan, interest on the loan, property taxes and insurance.

It’s not a precise calculation. It is simply a percentage that historically works.

[SK in CV]

Yes, you are missing something.

The calculation DOES factor in the tax deduction.

If the tax deduction was not factored in, the limit would be lower than 28%. It factors in everything. Cost of food, clothing, transportation, entertainment, and yes, taxes too. It factors in everything that isn’t principle on the loan, interest on the loan, property taxes and insurance.

It’s not a precise calculation. It is simply a percentage that historically works.

[SK in CV]

Yes, you are missing something.

The calculation DOES factor in the tax deduction.

If the tax deduction was not factored in, the limit would be lower than 28%. It factors in everything. Cost of food, clothing, transportation, entertainment, and yes, taxes too. It factors in everything that isn’t principle on the loan, interest on the loan, property taxes and insurance.

It’s not a precise calculation. It is simply a percentage that historically works.

[SK in CV]

Yes, you are missing something.

The calculation DOES factor in the tax deduction.

If the tax deduction was not factored in, the limit would be lower than 28%. It factors in everything. Cost of food, clothing, transportation, entertainment, and yes, taxes too. It factors in everything that isn’t principle on the loan, interest on the loan, property taxes and insurance.

It’s not a precise calculation. It is simply a percentage that historically works.

[Author]

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