Our first mortgage was for $60,000 on a $32,000 income. That's so long ago I have no idea what the payments were. Rate was 9 3/8%, though. Income was about $50,000 5 or so years later when we sold. $32,000 income was tight but do-able. $50,000 was pretty easy.
Second mortgage (on second house) was for $130,000 on a $75,000+ income. Income was about $120,000 when we sold about 6 years later. Again, not a problem, never felt stretched.
Third mortgage (on third house) was for $114,000 on a 15yr note on a $150,000+ income. But we also had a $55,000 business loan and $32,000 for 2 cars to pay off. Never felt stretched.
Fourth mortgage (on fourth house) was for $180,000 on a $180,000 income. This actually feels a lot more stretched. But that's because we had a $55,000 HELOC to pay down for a rental property, a really high savings/investment rate, the same rental house to renovate, and another house to renovate and flip.
4th mortgage was 12.3% of gross income. We are aggressively paying down the HELOC so if I include that, we were up to 19% of gross when the loan originated.
Income is now $20,000 higher due to farm income I inherited. HELOC is down to $40,000 in 17 months.
Our intent is to pay it off next December 2017. (We get free closing costs if the loan is open for at least 2 years).
We should have two more properties rented by the end of the year, for another $14,400 of income and SS for about another $20,000.
That will take us down to 10.1% of gross income by the end of 2017.
However, in 2018 our income will take a dive because we'll be FIREe.
Very conservatively, our income will drop to $90,000 which would raise our percentage to about 25%.
That's a lot tighter than I would like, especially as health care costs for us would rise substantially.
About a year later, we should be able to sell the house we're flipping. That will free up the capital to either pay off the mortgage, pay a chunk on the mortgage and then recast it to a more comfortable % of income, or invest. Don't know yet which we'll do.
I suspect stock market conditions at the time as well as how well the rental business works out over the next two years will have a lot of impact on our decision.
If we're in the midst of a crash we'll probably buy a lot of stock. If inflation picks up we'll probably not pay off the mortgage. And if the rental business isn't making the money we predict, well probably pay off the mortgage to cut our costs.
I probably over-think this. :)