What is the rule of thumb for determining the monthly payment you can afford?
A) Subtract monthly bills from gross monthly income and multiply by 0.36.
B) Add monthly bills to gross monthly income and multiply by 0.36.
C) Subtract monthly bills from gross monthly income and divide by 0.16.
D) Add monthly bills to gross monthly income and divide by 0.36.
E) Subtract monthly bills from gross monthly income and multiply by 0.66.

Question

Quizplus · Accepted Answer

The general rule of thumb is that your monthly housing expenses (mortgage, property taxes, and insurance) should not exceed 28% of your gross monthly income. In addition, your total monthly debts (including housing expenses, car payments, credit card payments, and other loan payments) should not exceed 36% of your gross monthly income. To determine the monthly payment you can afford, subtract your monthly bills from your gross monthly income and multiply the result by 0.36. This will give you an estimate of the maximum monthly housing expenses and total monthly debts you can afford.

What Is the Rule of Thumb for Determining the Monthly