Rent or buy? Think 28 and 36
Those “Rent vs. Buy” calculators on the Internet can make for some interesting “what-if” scenarios. Here’s a simple way to avoid the confusion on whether you should consider buying: the 28/36 Rule. Accordingly, no more than 28 per cent of your gross monthly household income should go toward the costs of housing. The “36” pertains to your overall debt – mortgage, credit cards, student loans, etc. – which shouldn’t be more than 36 per cent of your household income. One wild card is local taxes and insurance, which will vary by location. Also know that some home loan programs – if you have terrific credit profile – can push both of these numbers higher.
Those “Rent vs. Buy” calculators on the Internet can make for some interesting “what-if” scenarios. Here’s a simple way to avoid the confusion on whether you should consider buying: the 28/36 Rule. Accordingly, no more than 28 per cent of your gross monthly household income should go toward the costs of housing. The “36” pertains to your overall debt – mortgage, credit cards, student loans, etc. – which shouldn’t be more than 36 per cent of your household income. One wild card is local taxes and insurance, which will vary by location. Also know that some home loan programs – if you have terrific credit profile – can push both of these numbers higher.
No comments:
Post a Comment