How Much Can You Afford – Is Your Debt Load too High?
The funny thing is that most people we talk to who ask these questions and let us help them find the answer are surprised at what they can afford.Your credit score is a measure of your past performance, not your current debt load. Your credit is only affected by things that show up on your credit report such as cars, furniture, credit cards, mortgage and student loans. So keep in mind the groceries, clothes, food, utilities and entertainment don’t count against you when determining what you can afford. The suggested house payment plus all your other monthly payments should not exceed 40% of you and your spouse’s combined gross income (before income tax). Generally if something doesn’t show up on your credit report if won’t count against you as debt.
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