The Mortgage Payment

How much of our monthly income do we want to devote to a mortgage payment?
Many lenders and money management experts recommend keeping your monthly mortgage payment (including taxes, insurance and Home Owner Association dues) at 28% or less of your gross monthly income.  Experts also recommended to keep your total debt ratio capped at 36%.  Your total debt ratios include your monthly payments on your mortgage, credit cards, cars, school loans and any other installment loan.

Mortgage lenders refer to the percentage of your gross monthly income dedicated for your mortgage payment as the FRONT Ratio.  The ratio that includes all monthly payments on your debts is referred to as your BACK Ratio.


Mortgage Calculator


Household Reserves

How much do we want to set aside for future maintenance or repairs on our home?

Industry experts recommend that you set aside 1-3% of the home’s value on an annual basis.   Another way to determine your monthly set aside for repairs and maintenance is to create a list of your planned maintenance and repairs for the year, calculate the anticipated costs of those projects, then divide by 12.

Keep in mind that you want to set aside an amount that is both realistic and comfortable.


Emergency Budget

How much do we want to set aside for the unexpected?

How much to set aside for emergencies is ultimately determined by you and the dynamics of your family.  Many experts recommend setting aside 3-6 months of living expenses.  This may be considered a tall order for some households and easier for others.  Keep in mind, however, the more money you save, the better equipped you will be to handle an emergency.   Here are some questions to help get you started:

  1. How much is the deductible on my car insurance?
  2. How much is the deductible on our homeowner’s or renter’s insurance?
  3. How much does a typical medical emergency cost?
  4. How much would a typical car repair cost?



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There are no words to say how much you did for us and how much you helped us, you basically saved us.
B. A.
I want to say a huge thank you.  It feels a million times better knowing where we will be living, that we don't have to move, and I can actually afford to live here.  My life is no longer on hold, and we have been able to make plans for the first time in ages. There is no more black cloud of uncertainty hanging over my head always, waiting for the bank to dictate so much of my life. Thank you, thank you, thank you!
C. K.
Thank you for taking the time to talk to me and put my heart at rest! I look forward to working with you to stay in our home.  I have an appointment with a housing counselor your referred us to and I will give you an update once that occurs.  Again, it meant so very much to me that you took the time to give me hope.
A. F.