#1 Rule For Getting a Home Mortgage
Mortgage lenders have tightened standards recently. But consumers still have the potential to get approved for a bigger home loan than they can afford.
A general rule of thumb is that no more than 28% of gross monthly income should go toward house-related debt (including taxes and insurance). Besides first mortgages, this includes home-equity loans, which allow people to take out a lump-sum loan against the house, and home equity lines of credit, which allow people to borrow against the house over time, taking out money when needed.
A person who makes $ 5,000 a month before taxes, for example, wouldn’t want the monthly bill for house debt exceeding $1,400.
Note that that 28% guideline has a caveat: Monthly debt payments for everything- house, credit cards, car loans, student loans, etc.- shouldn’t be above 36% of gross monthly income. So if you spend 28% of your monthly pay on house debt, you have only 8% left for the remainder of your debt payments. In the example of someone who earns $5,000 a month, 8% would come to $400. Many car payments are more than that. Century 21 San Diego Realtor
I’ve never heard of making percentages like that in terms of debt. Seems like a really smart way to do it.
-Christine
San Diego Laser Eye Surgery
I feel like 28% is pretty low. I think my wife and I could handle anywhere from 36-40%
Evan
San Diego County Plastic Surgery
No way! 28% is the absolute highest you should go. You’re in great danger of foreclosure or bankruptcy in your future if you go any higher. In my opinion anyway.
Max
San Diego Medical Trials
Home mortgages – I was just searching for this info for a while. After six hours of continuous Googleing, finally I got it in your web site. I wonder what’s the lack of Google strategy that don’t rank this kind of informative web sites in top of the list. Generally the top websites are full of garbage.