| 1. Monthly income |
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| Wages, salaries, tips |
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| Interest |
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| Dividends |
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| Other income |
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| Total Gross Monthly Income (GMI) |
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| 2. Conventional allowable percentage of income
for housing expense |
28% of GMI (0.28 x GMI)
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36% of GMI (0.36 x GMI)
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| 3. Monthly Expenses to pay debt |
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| Auto loans |
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| Student loans |
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| Other loans |
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| Credit card payments |
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| Other loan payments |
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| Total Monthly Debt Service |
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4. Amount Available for Total PITI Mortgage Monthly
Payment
Subtract current debt service from allowable percentage of income
for housing expense |
28% GMI figure minus debt service
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36% GMI figure minus debt service
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| Use one of our mortgage
calculators to see the price range of affordable mortgages. |
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5. Double check this estimate against your actual
expenses and available income.
For the most realistic figures, double check this estimate using
your actual monthly expenses |
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| Other Monthly Expenses |
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| Taxes |
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| Food |
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| Utilities |
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Electricity, water, natural gas, phones, fuel oil, etc.
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| Life Insurance |
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| Health Insurance |
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| Auto Insurance |
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| Auto expenses (gas, repairs, etc.) |
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| Other transportation (tolls, fares) |
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| Medical expenses (not covered by insurance) |
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| Child care |
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| Alimony or child support |
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| Education |
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| Clothing |
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| Recreation/Entertainment |
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| Health/Fitness Club (gym) |
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| Meals out |
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| Vacations |
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| Charity |
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| Retirement |
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| Other living expenses (toiletries, cleaning supplies, etc.) |
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| Miscellaneous (anything else not accounted for) |
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| Total Monthly Expenses |
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| Now subtract this figure from your gross monthly income |
GMI minus monthly expenses
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| How does the result—your income after these expenses—compare
to the figures in Step 4: "Amount Available for Total PITI Mortgage
payment"? This figure should be greater than your 28% figure in
Step 4 and ideally greater than the 36% figure. If it is smaller than
the 28% then you will need to lower the amount you have available for
mortgage expenses to at least this figure but to an even lower figure
if you want to have any disposable income. |
Buying Guides 
