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Does 28% gross income for a mortgage include property taxes and insurance?

October 1, 2007 by A.B. Dada  
Filed under Housing Bubble

1 Comment




A regular reader of this site asks an important question:

When you say a mortgage payment shouldn’t exceed 28% of gross salary, and when Dave Ramsey says it shouldn’t exceed 25% to 33% of net pay, do you (and he?) mean a mortgage payment of:

P & I: Principal and interest?

or:

PITI: Principal, Interest, Tax, and Insurance?

Read my entire answer at the housing bubble blog.

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  3. FDIC Deposit Insurance and Employer Payroll Deposits
  4. Mortgage Short Sale: Forgiveness of Debt and the 1099
  5. Foreclosures, and more bad government ideas
  6. Reality versus Realty?
  7. Housing Bubble News, October 16, 2006
  8. Housing Bubble News, June 27, 2006
  9. Housing Prices always go up — not really
  10. Cities without Property Taxes

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Comments

One Response to “Does 28% gross income for a mortgage include property taxes and insurance?”
  1. Dan says:
    October 7, 2007 at 9:32 pm

    It is just a guideline. Do you have kids? A car payment? Those are more important than 28 vs 35

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