Yearly Income Vs Mortgage

Let s say your household brings in a total of 5 000 every month in gross income.

Yearly income vs mortgage. While you may be approved for a 500 000 mortgage based on strong credit and a solid income for example paying 3 000 for a mortgage each month may not be realistic if you have substantial student loans or other debts you re paying off. This ratio is the percentage of your yearly gross income that can be dedicated toward. Multiply your monthly gross income by 28 to get a rough estimate of how much you can afford to spend a month on your mortgage. Conventional lenders use 28 percent and 36 percent respectively for the mortgage and debt ratio maximums.

In this example you shouldn t spend more than 1 400 on your monthly mortgage payment if you re following the 28 rule. Mortgage lenders say that a mortgage payment should not exceed 31percent of an applicant s gross monthly income. Gross income plays a key part in determining the front end ratio also known as the mortgage to income ratio.