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40% of take-home pay for mortgage.
I make $70,000 a year how much house can i afford
What Percentage of Income Should Go Toward a Mortgage?
If you are thinking of buying a home, you've probably heard the question "How much house can I afford?" The answer depends on your personal financial situation and your mortgage options.
What is the maximum percentage of your income that you should earmark for a monthly mortgage payment? This article looks at how mortgage payments are calculated and explains the common 28/36 rule that many lenders use to determine how much you can afford to pay.
Lenders recommend that you not devote more than 28% of your gross yearly income toward a mortgage or more than 36% of your gross income to all debts, including a mortgage.
Key Takeaways
- The 28/36 rule is a widely used guideline for determining mortgage affordability.
- Factors such as your income, your debt-to-income ratio, how large a down payment you can afford, and prevailing interest rates can all play a role in determining how much you can borrow and how large your mortgage payments will be.
- In addition to your mortgage payment, homeownership involves costs
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