Question

Suppose a family has a gross annual income of ​$39,600.

a. what is the maximum amount the family should spend each month on a mortgage​ payment?
b. what is the maximum amount the family should spend each month for total credit​ obligations?
c. if the​ family's monthly mortgage payment is 70​% of the maximum they can​ afford, what is the maximum amount they should spend each month for all other​ debt?

Answer 1

According to financial advisers,
* mortgage payment should be at most 28% of your gross monthly income
* total monthly debt should be at most 36% of your gross monthly income. Total monthly debts include mortgage payments, car payments, credit card bills, student loans, and medical debt.\gross annual income: 39,600gross monthly income: 39,600 / 12 = 3,300a) maximum amount for monthly mortgage payment: 3,300 x 28% = 924b) maximum amount for total credit obligations: 3,300 x 36% = 1,188c) mortgage: 924 x 70% = 646.80 actual mortgage1,188 - 646.80 = 541.20 maximum amount they could spend each month for all other debts.