Rule of thumb currently promoted is that you should never spend more than 1/3 of your gross income. 33.3%. But you should be aware that this is far higher than the historic average. Up until 20 years or so ago, the rule of thumb was 25%, and many critics point to this change as one reason so many Americans are over-leveraged.
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The change was made in 1999 under the direction of then President Clinton, the Gramm-Leach-Bliley Act was enacted and signed by Clinton. Prior to this act only 36% of your income could be leveraged by creditors, and only 28% by mortgagers.
Investopedia advises that the principal, interest, taxes and insurance should not exceed 28% of your gross income.
The general rule is you should spend no more than half of your income on rent. The better you are doing financially, the smaller percentage of income goes towards your house/apartment.
If you are referring to applying for a mortgage loan the following are good guidelines: proposed monthly payment divided into gross monthly income should range around 32% or less; total monthly obligations (not utilities) plus proposed monthly mortgage payment divided into gross monthly income should range around 41% or less. Of course, there are always deviations to these ratios i.e. the borrowers assets and / or credit score ratings.
it means you should be eligible for a mortgage loan of up to but not limited to 100K as long as your monthly income is in good standing.
The answer would be yes, depending. A good rule of thumb is to calculate 43% of your gross income. Then, subtract your monthly payments (credit cards, installment loans and such). You'll be left with a figure that should be close to you eligible amount for a total monthly mortgage payment (principal, interest, taxes and insurance). It would be wise to ensure that even if my calculation allows this total monthly payment to be over 31% of your gross income, that you try not to take a mortgage payment over that amount. Many do, but it stretches them financially.
Rent shouldn't be than one quarter of your income.
Investopedia advises that the principal, interest, taxes and insurance should not exceed 28% of your gross income.
The general rule is you should spend no more than half of your income on rent. The better you are doing financially, the smaller percentage of income goes towards your house/apartment.
If you are referring to applying for a mortgage loan the following are good guidelines: proposed monthly payment divided into gross monthly income should range around 32% or less; total monthly obligations (not utilities) plus proposed monthly mortgage payment divided into gross monthly income should range around 41% or less. Of course, there are always deviations to these ratios i.e. the borrowers assets and / or credit score ratings.
If you do a reverse mortgage you should be able to refinance your home and have lower monthly payments that way you can have more money for the rest of your bills!
The percentage you need to pay will depend upon the tax bracket you are in. If you are unsure, you should hold back at least 30%.
it means you should be eligible for a mortgage loan of up to but not limited to 100K as long as your monthly income is in good standing.
No more than a third of your gross annual income should go towards housing. As for rent, you should not spent anymore than 25% of your gross income. Housing - This expense should include mortgage, insurance, gas, electricity, maintenance, and phone. (according to crown.org budget guide) Rent or your monthly mortgage payment plus each of the above should never exceed 36%. 1/3 is generally a good rule just as with the 1st answer, but don' t forget that the number includes the other housing expenses.
Yes, but they must be able to prove enough stable income to support their new mortgage payment. A good rule of thumb is that their new monthly mortgage payment should not exceed 31% of their GROSS (income BEFORE tax) monthly income. Stable income is income that has been received on a consistant basis for a minimum of 2 years. If your source of income is from Disability, Child Support, Alimony, or Social Security, you must be able to prove that you will continue to receive this income for at least the next 3 years.
The answer would be yes, depending. A good rule of thumb is to calculate 43% of your gross income. Then, subtract your monthly payments (credit cards, installment loans and such). You'll be left with a figure that should be close to you eligible amount for a total monthly mortgage payment (principal, interest, taxes and insurance). It would be wise to ensure that even if my calculation allows this total monthly payment to be over 31% of your gross income, that you try not to take a mortgage payment over that amount. Many do, but it stretches them financially.
Well one is obligated to pay their rent, but if someone is going to be paying over 30% of their monthly income on rent, there is a possibility of going upside down.
There are many different places online where you can find monthly mortgage calculators. I personally recommend you go to www.moneysupermarket.com/Mortgages which should meet your needs perfectly.