Understanding Home Buying Rules

What does the "Rule of 3" for buying a house generally refer to?

• The house should be within 3 miles of your workplace.

• You should compare at least 3 houses before making a decision.

• Your price of the house should not exceed 3 times the family household income.

• You should save for 3 years before buying a house.

If your monthly income is $8,200, what is the maximum amount you can afford to spend on a house according to the Rule of 3?

• $246,000

• $196,800

• $98,400

• $295,200

According to the Rule of 28/36, what does the number 28 represent?

• The maximum percentage of your income that should go towards housing expenses.

• The minimum percentage of your income that should be saved.

• The maximum percentage of your income that should go towards all debts.

• The number of years you should plan to pay off your mortgage.

According to the Rule of 28/36, what does the number 36 represent?

• The maximum percentage of your income that should go towards housing expenses.

• The maximum percentage of your income that should go towards all debts, including housing.

• The number of months you should save before buying a house.

• The percentage of your income that should be invested in stocks.

If your monthly income is $6,000, what is the maximum amount you should allocate for housing expenses according to the Rule of 28?

• $1,200

• $1,680

• $1,700

• $1,800

If your monthly income is $4,500, what is the maximum amount you should allocate to debt payments according to the Rule of 36?

• $1,350

• $1,620

• $1,800

• $2,000

Which of the following is NOT considered in the 28/36 rule for financial planning?

• Mortgage payments

• Credit card debt

• Retirement contributions

• Gross monthly income

What is the significance of adhering to the 28/36 rule when purchasing a home?

• To ensure you have enough funds for luxury items.

• To avoid financial stress and keep a balanced budget.

• To increase your frequent flyer miles.

• To be eligible for tax deductions on mortgage interest.

Maria earns $6,500 a month as a teacher. John earns $9,500 as a firefighter. According to the Rule of 28, what is the maximum amount they should spend on housing expenses?

• $4,480

• $3,980

• $2,800

• $2,100

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Olivia earns a monthly income of $6,000. According to the Rule of 36, what is the maximum amount she should spend on all her debts?

• $1,800

• $2,000

• $2,160

• $2,400