A good rule of thumb, according to First Choice Lending Group: Borrowers should follow the 28% rule, which says that your mortgage payment — including principal, interest, taxes, and insurance — shouldn’t exceed 28% of your monthly gross income .
What is Gross Income? Your total income from all sources before taxes and other expenses are paid
An easy way to use the 28% rule is by calculating the maximum mortgage payment you can afford .
Simply multiply your monthly gross income by 0.28:
Monthly Gross Income = $5,000 $5,000 x 0.28 = $1,400
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