How Much House Can You Afford
Calculating Expenses Associated with Buying a New Home
Buying a new home is likely the single largest investment you will make throughout the course of your life. There are a number of aspects to consider which make it difficult to determine whether or not you can afford the mortgage for the house you want. Knowing whether or not you can afford a home goes beyond just the price of the home itself. You will have to factor in your current expenses, the down payment of the home, credit card payments and other financial requirements you must meet on a regular basis.
In order to help you determine which houses you can afford and which ones are out of your monetary range, we have designed a calculator to do the math for you. This calculator is efficient in providing you with realistic expectations of what you can afford and what you cannot. It includes categories for all possible expenses you may have, as well as interest rates, loan terms, real estate taxes and other expenses which may affect the amount of money you can afford to spend.
Heres how to use it:
- Simply enter your mortgage and debt information into the boxes provided.
- Once you have entered the proper amounts into each of the categories, your monthly mortgage payment, total monthly expenses, and the minimum annual household income required to carry a mortgage of this size are automatically calculated and displayed in the Calculated Results area.
- To re-calculate, modify one of your original values and click Update.
These numbers are meant to give you an idea of what you can afford to spend on a mortgage without over-extending your budget. It can also help you to understand the financial requirements associated with the homes you are looking for and what you can do to ensure you meet those requirements.
Keep in mind, this calculator will provide you with estimated figures based on your current income and debt load, not the actual figures as calculated by your bank. A bank will take other items into consideration, such as your credit history, the total amount of credit currently extended to you, and the length of time you have been working for your current employer. Use this calculator as a tool to highlight the price range best suited to your situation to ensure your expectations are realistic when it comes to shopping for your dream home. It only takes a few minutes and may end up saving you a great deal of time, money and heartache in the future.