how do i know how much of a monthly mortgage payment i can afford?

Answer 1

check out the calculator below:

Answer 2

From the lenders perspective you can go all the way up to 55% Debt to Income (DTI). Yes most Fannie-Mae products require you to have a 36% DTI. So the real question is how much do you want to afford? Remember that DTI is calculated from your Gross Income < that number that you get on your paycheck but never see > so I advise most of my clients that if yes you qualify for the loan with your gross but can you make the payment on your net monthly income. Net is the income after all taxes and deductions are taken.

Simple Calculation:
New mortgage payment + Monthly Revolving Debt / Monthly Gross Income will give you your DTI.

Good luck and usually mortgage brokers will have the 55% DTI lenders while neighborhood banks have the 36%.

Answer 3

you can find mortgage calculators on the web, but I will warn you that they will tell you you can afford more every month that you probably can. The calculator doesnt take into consideration your incidental expenses....gas, groceries, insurance, etc. I read once that you dont want your mortgage payment to be more than 30% of your income. You also have to figure in the insurance and taxes, not just the principal and interest of the mortgage! Get an appointment with a Consumer Credit Office near you...they have home buyer counseling sessions and will advise you. Sometimes you get a better mortgage rate/interest for seeking their advice! Good luck!

Answer 4

This is what the lenders usually look for, although there are programs that may be more or less lenient in their specific allowances of DTI (Debt-To-Income.)

Take your annual gross income, divide by 12 (to get your monthly), divide by two; then subtract your car payment(s), Credit Card min payments, other loans or etc...This will be the amount of PITI that lenders feel you can afford. PITI is Principal, Interest, Taxes, & Insurance.

So for math purposes, let's say you have $120k annual gross income.

$120k / 12 = $10k/mo.

$10k / 2 = $5k

Say you have the following monthly debts:
Credit Card #1: $100
Credit Card #2: $90
Auto Loan: $400
Student Loans: $250

Total: $640

$5k - $640 = $4,360 << This would be the max PITI the bank would allow you to have in a Full Doc loan.

So if you taxes were say $3600/year ($300/mo) and your insurance was $1200/yr ($100/mo).

$4,360 - $400 = $3,960 Principal & Interest Payment

I hope that helped a little.

Answer 5

Easiest way to know if you can afford or can't afford something is to set up a monthly budget. Sit down and add up your monthly income, then add up your usual monthly expenses and bills.... Substract the bills from the income... What do you have left over? Don;t forget to add in a little extra in the bill department for unforseen expenses like car repair, etc... Is there enough left for rent or mortgage or would you be pushing your ( budget) to the max??

Answer 6

The general rule is that your monthly payment should not be more than 36% of your gross income. So, if you make $100,000 a year, your monthly payment should not exceed $3,600 a month. I personally think that this is an awfully dangerous formula. In my view, it should be no more than 20% of your gross income, or $2000 in the example above.

Answer 7

A good rule to follow is that you can afford to spend 25-33% of your GROSS monthly income on mortgage, property taxes and homeowners insurance.

Answer 8

I went to mortgage company and then set up an appointment with
catholic charities they help with down payments for 1st time buyers. and she helped me to figure what I could afford this is how she told me:
1) write down your MONTHLY expenses:
a) utilities(gas,water, electric)
b) rent
c) cable
d) phone
e) Food( groceries: for the month, lunches, meals out, kids lunches)
f) car (payment; if any, and gas)
g) insurance( car, health, life)
h) medical for the month
i) clothes(for the month), dry cleaning and laundry supplies, and if you take to the laundry mat, that $
j) hair styling(to go to get hair cut)
k) alcohol, and cigeretts
l) child care, diapers, and all that
m) school supplies, tuition
n) savings
o) $ to charities or church
p) going to movies or to rent movies/and the eats
q) cleaning supplies and paper products(napkins, papertowels, toilet paper); shampoo, pads, soaps, and toothpaste(for the month)
r) and pets and their expenses
s) gifts for birthdays, christmas and other holidays(monthly)
t) credit cards(each month-payment, and each card)
this is your MONTHLY expenses out of your own paycheck to pay.
NOW: your income:
what you bring home in paycheck and child support if you receive it, and all income in house and food stamps.
take this $your income and subtract from those monthly expenses above and this is what is available for house payment,
also consider what you pay in rent as part of house payment.

Answer 9

there are many ways, use online calc.