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NBR: Mortgage Calculators...

redhead2466redhead2466
in Babies: 0 - 3 Months

Does anyone know why, when calculating how much of a mortgage you can afford, you are asked to provide your GROSS monthly income???

It's ridiculous!  We are looking to move and I want to be prudent and conservative and keep the monthly mortgage payment under $1500.  But when I use these mortgage calculators that ask for gross monthly income, it says I can afford a $3800/mo payment!!!!  Ummmm....no. 

Obviously I enter NET income instead, and that gave a result much more in line with my limit...  The sad thing is I know people who have mortgages that high!  Yikes!

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Re: NBR: Mortgage Calculators...

  • DBride2006DBride2006 member

    I would guess for two reasons:1. Some calculations to determine your "lend-a-bility" are based on what percentage your mortgage is compared to your gross income.

    2. You will be able to write off your mortgage interest, which will ultimately affect your net income.?

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  • houndbabyhoundbaby member
    On average people buy a house that is worth 1.5 or 2x their gross yearly income, so that is what the mortgage calculator is basing that number on.
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