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Owning a home, and incurring a mortgage is usually one of the most important financial aspects of a person's life. Different factors are that affect a persons ability to make payments on a mortgage, especially in terms of income and and taxes. It has a major impact on one's sense of financial security since a house has historically been the largest piece of one's investment portfolio at retirement.
Standard formula for mortgage affordability
To mortgage lenders, 28/36 is the ratio of a borrower’s debts to their gross income.This means the monthly mortgage payment, plus monthly property taxes, plus monthly house insurance may not exceed 28% of gross monthly income. The 36% refers to a similar ratio, it refers to the fact that total long term debt from all sources may not exceed 36% of gross monthly income. Long term debt is generally defined as any debts with more than 10 monthly payments still outstanding.
Top Use: Mortgage Affordability Calculator - Income:6000.00 Interest rate:4.5% term:30Years
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