I don't know what your book suggests, but any experts recommend that no more than 28% of after tax income be spent on housing. That includes taxes, utilities, insurance, and mortgage.
I can't give you an exact figure because the problem doesn't state the net income.
Using the maximum ratios for a conventional mortgage, how big a monthly payment could the Taylor family afford if their gross ( before- tax) monthly income amounted to $ 3,500? Would it make any difference if they were already making monthly installment loan pay-ments totaling $ 750 on two car loans
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