What Qualifies as House Poor

When someone is house poor, it means that an individual is spending a large portion of their total monthly income on homeownership expenses such as monthly mortgage payments, property taxes, maintenance, utilities and insurance.

What percentage is house poor?

Some financial experts say no more than 30% of your gross income, others say no more than 25% of your take-home, after tax income. However, it really comes down to your own individual financial situation.

What is the 28 36 rule?

A Critical Number For Homebuyers One way to decide how much of your income should go toward your mortgage is to use the 28/36 rule. According to this rule, your mortgage payment shouldn’t be more than 28% of your monthly pre-tax income and 36% of your total debt. This is also known as the debt-to-income (DTI) ratio.