FOLLOW THE RULE 28/36. A REALTOR CAN DO THIS.

As climbing interest rates force many a homeowners to face rising monthly payment, it pays to reviews the "28/36 Rule", which many mortgage lenders use to estimate how much debt a home-buyer can afford. For a solid financial footing, prospective borrowers should limit their mortgage payment, property taxes, homeowners's insurance, and other home related costs to no more than 28% of their gross income. Beyond that, total debt obligations including home debt, credit card debt, auto loans and other money owed on loans should not exceed 36% of gross income. As some homeowners have found out, if an appreciable portion of their debt is in variable rate loans, an increase in interest rates can raise monthly payments to dangerous levels.

Everyone has been hearing about the crunch many homeowners are feeling due to climbing interest rates. Prospective home-buyers should probably choose a fixed rate loan if the plan to stay in the house for the foreseeable future.