15-Year Mortgages

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Walters said homeowners shouldn't take on a 15-year fixed-rate mortgage unless they have substantial savings, including at least a year's worth of living expenses in liquid accounts.

Also, he recommends having a debt-to-income ratio below 35%. So if you have a gross salary of $5,700 per month, for instance, your monthly debt -- including any mortgage payments, taxes, insurance, homeowners-association dues as well as auto and student loans and credit-card debt -- would have to be a max of $1,995 to get a 35% ratio.


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