Sep 5, 2018 · 1 min read
Good article. Everyone knows this though, unless you have done literally no research. I work in this space, and #1 on my list for the clients I serve is the percentage of cash flow, compared to overall income. Lenders will approve you for a percentage that is too high, 28–30% of your gross income. Most Americans would be house poor if they accepted ALL the money the bank is willing to lend them. A rule to live by, IMO, is to allocate no more than 15–20% of your gross income to the principal and interest on the mortgage. And if you’re income rises over time, and you have fixed rate mortgage, these numbers will fall in line over time. Cash is king, and more specifically, cash flow is king.