👉 Sure, let's define what "mortgage to net income ratio" is.
Imagine you're running a business and you have a loan from a bank that covers part of your expenses but not your fixed costs like rent, utilities, and salaries. Your boss says this loan will cover 80% of your total expenses, so the balance left for your salary goes into savings. But, when you actually calculate your net income, it's much lower because you need to pay back all interest on that loan plus fees and penalties from the bank. For example, if your gross income is $100,000 per year, but you only earn $50,000 in a year, then your net income for that year would be $50,000. But, when you calculate your total expenses ($30,000 for rent and utilities), it's only $20,000, leaving only $10,000 left over. So, to keep your expenses in line with your net income, you would have to increase both your gross and net incomes.
