What is the maximum proportion of your income that should go in debt repayments (including mortgage)?
2007-09-19 21:30:49 · 6 answers · asked by Andrew L 7 in Business & Finance ➔ Personal Finance
Can't believe no one actually answered your question yet... The maximum proportion of your (gross) income that should go in debt repayments (including mortgage) is 36%.
That was the magic number that used to be used by mortgage companies before they relaxed their underwriting standards and are now paying for it through higher foreclosures.
Remember that this 36% will probably leave you feeling a little tight. It doesn't include utilities, food, etc. I would choose to live with a lower percentage.
Good luck!
It is a good idea to save at least 10% of your income, but that didn't answer the question!!!
2007-09-20 08:32:19 · answer #1 · answered by Rush is a band 7 · 0⤊ 0⤋
Hey Guys
Debt is a horrible thing, we all try not to get into it but sometimes lifes circumstances and choices wind us up in a pile of debt. Personally, there is a wealth of knowledge available, and with a little thinking and planning, you can systematically get rid of all your debt. I used to be in big debt, a few hundred thousand, however from about the past year or so I have been living debt free. Im not promoting anything here, I just want everyone to know that its possible. I write about my experiences in regards to Debt Consolidation, Car Loans, Credit Cards, Student Loans on my blog listed below so stop by if you get a chance and leave some comments.
http://credit-and-loans.blogspot.com/
2007-09-21 05:11:04 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Different Banks etc. have different guidelines ..
.. once the ratio gets too high they will refuse you any more loans.
It also depends on how much you get paid .. things like food / utilities etc. are about the same for most people, so if you are a high earner you can afford to spend a higher percentage on your Mortgage ...
As a good guide, I would say up to 70% total (i.e. 70% Mortgage + zero Credit card + zero other loans) ..
Every penny you spend on your Mortgage gets you closer to owning the house .. every penny you spend on Credit Cards & other debt etc. is money down the drain ..
So pay off your Credit Card first every month (no more money down the drain) and never get out other loans
2007-09-20 04:38:30 · answer #3 · answered by Steve B 7 · 0⤊ 1⤋
if you are struggling with bills there are company's out there that will deal with it for you for a small fee, but if you go to the citizen advice bureau they deal with it for FREE they will write of to all your debts arranging them from priority debts i.e gas electric rent/mortgage etc, to the non-priority debts such as any catalogues you have. they also allow money for your clothing, petrol, etc not much but it helps. it depends on what your out goings and in comings are as to how much they will get you to pay back anything from a £1 upwards. hope this helps
2007-09-20 05:36:00 · answer #4 · answered by sara d 2 · 1⤊ 0⤋
Save at least the 10% of your income.
2007-09-20 04:35:55 · answer #5 · answered by Celine 2 · 0⤊ 0⤋
don't know the average but me its about 95% and I dont have a mortgage - I work to pay rent and council tax, electricity, food and I am left with enough for travelling to work.
2007-09-20 04:43:53 · answer #6 · answered by Jackie M 7 · 1⤊ 0⤋