How Much Debt

• The typical American household will carry the following debt obligations:
  
  
  • home mortgage
  • second mortgage or home equity loan
  • auto loan(s)
  • student loans(s)
  • 4-5 credit cards
  • retail financing loan
  • other
    
    
• Basically, the more income you make, the more debt you can assume. The ratio of your debt-to-income is a percentage of debt that you can safely assume at your current income level.
  
  
  The "debt-to-income ratio"
  calculated by dividing your fixed monthly debt expenses by your gross monthly income.
  
  As a basic rule, you should live within the following percentages:
  
  — monthly housing debt expenses including taxes, insurance: 25-28%
  — other credit obligations (credit cards, auto loans, etc.): 10-15%
  
  — your total debt obligations should be around: 36-40%

Calculating Your Debt-to-Income Ratio:
Input the following data to calculate your debt ratio:

Fixed monthly expenses include:

• monthly housing debt/rent expenses including taxes, insurance.
• monthly installment loan payments
• monthly revolving credit line payments
• real estate loan payment on non-income producing property
• alimony and child support
• any tax or legal assessments.