A question I get a LOT from my friends and peers: How much of my income should go towards rent/mortgage?
My rule of thumb is 25% but I read a Washington Post article that says 30% of your gross income. Gross is your income before taxes and deductions are removed. This means the following affordabale rents if you make $3,000/mo gross income:
25% - $750/mo
30% - $900/mo
This percentage is not supposed to include utilities or other household expenses.Only your home payment.
Of course you need to adjust your percentage for your other monthly committments (i.e., car note, loan payments, child support, etc). If you're looking into buying, 30-33% is a decent estimate od affordability because your income will increase yearly and your mortgage payments will not.
Hopefully this adds to your roladex of financially savvy information! Happy apartment/house hunting!
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