The '28/36 Rule' states that your housing expenses (mortgage, taxes, insurance) shouldn't exceed 28% of your gross monthly income and your total debt (credit cards, student loans, car loans) shouldn't exceed 36% of your gross monthly income.

Question

BlackTom AI · Accepted Answer

The question presents the so-called 28/36 Rule for housing and debt obligations as a guideline: housing expenses should be no more than 28% of gross monthly income, and total debt should be no more than 36% of gross monthly income.
Option 1: "True". This statement aligns with widely used mortgage underwriting guidelines, where lenders assess borrowers’ ability to manage payments: housing costs (principal, interest, taxes, insurance) typically should not exceed 28% of gross monthly income, and total debt obligations (including other loans and credit cards) should not exceed 36% of gross monthly income. These percentages are commonly cited as safe thresholds to maintain affordable debt service relative to income.
Option 2: "False". This would assert that the rule is inaccurate, which contradicts standard underwriting practice. The 28/36 rule is not about all possible circumstances or lenders, but it reflects a general benchmark used to gauge affordability. Some lenders may use stricter or looser criteria depending on program requirements, compensating factors, or regional guidelines, but the basic rule itself is a recognized benchmark, making this option incorrect as a blanket statement.
In summary, the statement described in the prompt matches the traditional interpretation of the 28/36 rule, while the claim that it is false would misrepresent common mortgage affordability standards. The other option would be incorrect because it denies the established guideline rather than acknowledging typical lending practices.

The '28/36 Rule' states that your housing expenses (mortgage, taxes, insurance) shouldn't exceed 28% of your gross monthly income and your total debt (credit cards, student loans, car loans) shouldn't exceed 36% of your gross monthly income.

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