Page 32 - Book3E

Gross Income
$20,000 $30,000 $40,000 $50,000 $60,000 $80,000 $100,000
Monthly Gross Income
$1,667 $2,500 $3,333 $4,167 $5,000 $6,667 $8,333
28% debt-to- income ratio
$467
$700
$933
$1167
$1400
$1867
$2333
36% debt-to- income ratio
$600
$900
$1200
$1500
$1800
$2400
$3000
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Debt-to-Income Ratios
IMPORTANT: Regardless of the ratio the lender requires, you must use your budget to determine what kind of monthly payment you can live with and still achieve your financial goals.
Let’s Review__________________________________
Calculate Your Front-end Debt-to-income Ratio
Calculate how big a mortgage payment a lender might be willing to allow you. Multiply your monthly gross income by 0.28. For example: $4000 x 0.28 = $1120. What is the monthly mortgage payment most lenders would be willing to allow you based on your front-end ratio?
Taking Your Finances Beyond Your Home