Does 28% gross income for a mortgage include property taxes and insurance?
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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One Response to “Does 28% gross income for a mortgage include property taxes and insurance?”
Dan Says:
October 7th, 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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