Check home affordability with the 28/36 guideline: test your skills
A lender rule of thumb: housing up to 28% of gross income, all debt up to 36%. Your comfortable number may be lower. Answer each question to see the explanation; your score appears at the end.
This test checks that you can
- Apply the 28% and 36% limits
- Know what counts as housing cost
- Set a comfortable payment below the ceiling
- Practice
1. Under 28/36, housing should be at most…
- Practice
2. Which is included in housing cost?
- Practice
3. If a lender approves more than 28/36…
- Key idea
4. Which statement best explains "Two limits, two questions"?
- Key idea
5. Which statement best explains "Approval is not affordability"?
- Key idea
6. Which statement best explains "Gross income flatters"?
- Action plan
7. In the action plan, which step comes first?
- Mistake to avoid
8. Which of these is a mistake this lesson warns against?
- Mistake to avoid
9. Which of these is a mistake this lesson warns against?
Gross income $5,500 a month. Other debts $600 a month. What is the maximum housing payment under both limits?
Show the answer
$1,380
28%: $1,540. 36%: $1,980 − $600 = $1,380. The lower is $1,380.
Multiply your gross monthly income by 0.28 and by 0.36, then subtract your other debt payments from the second number.
More tests in this bootcamp
- Compare renting and buying with the full costs
- Check home affordability with the 28/36 guideline
- Balance your down payment, PMI and cash cushion
- Count closing costs before you buy a home
- Build a home repair reserve before something breaks
- Explore shared housing costs and landlord responsibilities
- Understand REITs: property exposure through investments
- Final exam: Housing and real estate