Living expense max 31% or 35%

Home Forums Purchase Program Living expense max 31% or 35%

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  • #48192
    frankysmom
    Member

    Hello

    The Workbook has living expense maxed at 31% in chart but 35% in item #5 above the chart.

    To confirm, living expense do not include insurance, rent and credit cards and is based off of gross, correct?

    Thanks

    #48226
    southflorida
    Member

    31% of your gross monthly income is the housing ratio which includes mortgage, taxes, HOA(if any) and property insurance and it’s the maximum monthly payment that you can be approved as long as the 31% along with your monthly minimum debt payments do not exceed 40% of your gross monthly income

    #48239
    TTrumble
    Member

    Hello frankysmom,

    Actually, some simple math answers your question.

    The workbook example refers to a gross monthly income of $5,000, and in both instances the dollar figure used for living expenses is $1,750, which is 35% of $5,000. the 31% is obviously a typo which should be corrected in the next edition of the workbook.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

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