Question

You (or your parents) plan to pay $1,275.00/month for a mortgage. How much is the minimum realized income per month to the nearest penny? Round any decimals to the nearest penny.

Answer 1

To determine the minimum realized income per month needed to afford a $1,275.00/month mortgage, it is recommended to follow the 28/36 rule. This rule states that a household should spend a maximum of 28% of their gross monthly income on housing expenses and a maximum of 36% on total debt payments.

In this case, $1,275.00/month represents the mortgage payment. To calculate the minimum realized income per month:

$1,275.00 / 0.28 = $4,553.57 (minimum gross monthly income)

Therefore, the minimum realized income per month required to afford a $1,275.00/month mortgage payment is $4,553.57.