What Is Included

A listener wants to know what should be included in the mortgage payment that Dave says to limit yourself to.

QUESTION: Listener is confused. Dave says that the mortgage payment should be no more than 25% of your take-home pay. Does that include taxes and insurance, or just principal and interest?

ANSWER: That includes taxes and insurance, but the idea is not to borrow so much money that you can’t breathe. I don’t borrow money, and I quit doing that years ago, because I figured out that when I don’t have payments, I have money. If you want to build wealth, get out of your payments.