2. Percentage of income allowable for housing expense 28% of GMI (0.28 x GMI) _______________ 36% of GMI (0.36 x GMI) _______________ 3. Monthly Expenses to pay debt Auto loans _______________ Student loans _______________ Other loans _______________ Credit card payments _______________ Other loan payments _______________ Total Monthly Debts _______________ 4. Amount Available for Mortgage Monthly Expense (PITI) Subtract current debts from allowable percentage of income for housing expense. 28% GMI figure minus debts _______________ 36 % GMI figure minus debts _______________ 5. Double check this estimate against your actual expenses and available income. For the most realistic figures, double check this estimate using your actual monthly expenses.
*Total Monthly Expenses
Taxes _______________ Food _______________ Utilities _______________ Electricity, water, natural gas, phones, fuel oil, etc. Life Insurance _______________ Health Insurance _______________ Auto Insurance _______________ Auto expenses (gas, repairs, etc.) Other transportation _______________ (tolls, fares) Medical expenses _______________ (not covered by insurance) Child care _______________ Alimony or child support _______________ Education _______________ Clothing _______________ Recreation/Entertainment _______________ Health/Fitness Club (gym) _______________ Meals out _______________ Vacations _______________ Charity _______________ Retirement _______________ Other living expenses _______________ (toiletries, cleaning supplies, etc.) Miscellaneous _______________ (anything else not accounted for) TOTAL: $____________*
Now subtract this figure from your gross monthly income. How does the result—your income after these expenses—compare to the figures in Step 4: “Amount Available for total Mortgage Monthly Expense (PITI) payment”? This figure should be greater than your 28% figure in Step 4 and ideally greater than the 36% figure. If it is smaller than the 28% then you will need to lower the amount you have available for mortgage expenses to at least this figure but to an even lower figure if you want to have any disposable income.
