Lenders want your monthly debts (car, student loans, credit cards) to be under 43% of your gross income. For a huge mortgage, aim for 36% or lower. That means if you earn $20,000 a month (ha, we can dream), your total payments should stay under $7,200. Not too shabby, but remember: that includes the mortgage payment itself. So that $7,200 gets eaten quickly by a $5,000 mortgage plus your Porsche loan. Do the math before you fall in love with a mansion.
Fun fact: In 1980, the average mortgage payment was 21% of income. Today, in many cities, it’s over 40%. You’re basically playing a game of financial Tetris. Make sure your blocks fit.
