You (or your parents) plan to pay $1,275.00/month for a mortgage. How much is the minimum realized income per month to the nearest penny
4,553.57
To determine the minimum realized income per month, we need to consider the debt-to-income ratio. Typically, financial experts recommend that housing expenses, including mortgage payments, should not exceed 28% to 33% of your monthly income.
Let's assume a conservative debt-to-income ratio of 33%. To calculate the minimum realized income, we divide the monthly mortgage payment by the debt-to-income ratio:
Minimum realized income = Monthly mortgage payment / Debt-to-income ratio
Minimum realized income = $1,275.00 / 0.33
Minimum realized income = $3,863.64 (rounded to the nearest penny)
Therefore, the minimum realized income per month, rounded to the nearest penny, would be $3,863.64.
To determine the minimum realized income per month required to pay a mortgage of $1,275.00, you would need to consider the percentage of income that you can allocate towards housing expenses. Typically, financial advisors recommend that housing expenses should not exceed 28-30% of your monthly income.
Let's assume a conservative percentage of 30% for housing expenses. To calculate the minimum income needed, follow these steps:
1. Determine the housing expense amount: Multiply the mortgage payment by 100 and divide it by 30 to get the total income needed.
($1,275.00 x 100) / 30 = $4,250.00
2. Round the total income amount to the nearest penny:
So, the minimum realized income per month required would be $4,250.00 to the nearest penny.
Keep in mind that this calculation only reflects the housing expense and does not consider other financial obligations such as taxes, insurance, utilities, and other debt payments. It's essential to factor in these additional expenses to determine an accurate estimate of your minimum realized income.