Reported 5 months ago
To decide how much of your income should be allocated to a mortgage, consider your budget and long-term financial plan, alongside various formulas. A common recommendation is to borrow two to three times your income for a home purchase. The 28/36 rule is prevalent, advising that your monthly housing costs should not exceed 28% of your gross monthly income for the mortgage payment and 36% for all debts. Other rules like the 35/45 rule and the 25% rule offer alternative perspectives on how much to spend on a mortgage, factoring in aspects like post-tax income. Lenders also assess factors such as your debt, credit score, and down payment when determining mortgage approval and affordability.
Source: YAHOO