When estimating your allowable mortgage payment, include all the income of anyone who will be on the title to the house (see Figure 4.1). Unmarried persons may pool their income to buy a house together, just as a married couple can. If you are self-employed, average your past two years’ income from that source. Do not include one-time events like inheritances, insurance settlements, and capital gains. Next, list your monthly debt payments. Most lenders don’t care about debts that will be paid off within ten months, so omit those. List actual monthly payments in Figure 4.2. Don’t forget outstanding student loans or child support payments, if any. |
