Are property taxes and home insurance included as part of mortgage debt?

NBC News said last night that debt should not exceed 38% of take home pay. Are property taxes and home insurance included as part of mortgage debt?

When it comes to qualifying for a mortgage loan every lender WILL include the taxes, insurance and mortgage insurance (if any) in the debt to income ratio. These other people are talking about the choice of whether or not you want the lender to escrow these payments and handle the yearly distribution or do it yourself.

Typically, no its not included. The 38% rule is for how much of your take home pay goes to payments for any long term debt. This includes car payments, credit card payments, student loans, or any other debt that is going to take a while to pay off.

I never believed those percentages anyway though. they're a nice rule of thumb for someone who doesn't even know where to start, but there are too many other variables to consider. The bottom line is that you need to decide how much you can afford. Look at what will be left each month after the payments and decide if you are willing to live on that amount. If you're willing to drive old cars, eat at home and shop at thrift stores, you can afford more for a house payment than if you insist on eating at gourmet restaurants, driving new cars, and wearing designer clothes.

NO! You can add that to your payment, but it is not included. It is nice to add it because you do not have to worry about ins. or taxes again. 38% sounds high. Just remember that they always say you can afford a more then you can pay! BEWARE

No but should be. Too many people apply for mortgages and yes they can stretch themselves to pay the loan. Then escrow is added to the monthly payment and the trouble begins since it could add as much as 1k to the monthly payment.

I would say no. The 38% NBC is referring to is the debt to income ratio which accounts for long term debt like car, credit cards, student loans etc.