How much can I afford ?
2006-12-15 19:12:10 · 9 answers · asked by J. Allen B 1 in Business & Finance ➔ Renting & Real Estate
Do you live in Florida?
2006-12-15 19:20:46 · answer #1 · answered by Anonymous · 0⤊ 1⤋
Add up what you currently pay in rent+utilities (unless you can't afford your current digs.)
You can pay THAT MUCH in mortgage payment+utilities when you buy a home.
Do that with a fixed-rate loan, like FHA. Do not let anyone sell you an "interest-only" loan. Avoid variable rate mortgages like the plague. The rate may look lower now... Most mortgages are 30-year... well, the prevailing mortgage rate about 26 years ago was 18%.
Make sure your insurance and escrow are included in the payment you are considering. Getting hit with a bill for insurance and escrow every 3-6 months might be painful with respect to thinking you were doing fine keeping up with payments.
A good banker and a good realtor can help you with this stuff. If the banker passes you on to some loan shark with points and a higher rate and a bunch of confusing jargon, start thinking about buying less house or continuing to rent until you get better credit.
The important thing isn't to buy a $1M home for $2000 a month. The important thing is to buy a home you can love at a payment you can afford (and which includes principal and has a fixed rate!)
2006-12-16 03:36:02 · answer #2 · answered by Jonathan T 2 · 0⤊ 0⤋
Take your monthly income, figure out what your monthly mortgage payment would be, figure out all you other bills and all the money you would need to be comfortable every month, and see if they add up. If you are truly terrible at doing this, I recommend that your mortgage payment be no more than one third of your total monthly income---that is to say if your home loan is $250,000 and your monthly payment is like $1200 a month, you should make $3600 a month, and you would ideally be fine. It's different for everyone though, and it scares me that you are even asking this. STAY AWAY FROM NEGATIVE AMORTIZATION LOANS!!!!!!
2006-12-16 03:19:10 · answer #3 · answered by Anonymous · 0⤊ 0⤋
If your monthly household income is enought to cover the mortgage payment, property tax, hazard insurance, utility bills, and your everyday expends, plus a once a year family vacation, with some more money to go to your retirement. Then you can afford it.
2006-12-16 04:22:43 · answer #4 · answered by Ray 2 · 0⤊ 0⤋
Move to North Dakota, and you'll be able to afford practically anything. If that is still too much for you, move to Myanmar, and you can buy an entire town.
2006-12-16 03:15:13 · answer #5 · answered by sochiswim 4 · 0⤊ 0⤋
The lenders usual calculation is 28% of your gross monthly income is what you can afford. This does not cover taxes, insurance and PMI.
2006-12-16 04:43:33 · answer #6 · answered by golfserv2001 4 · 0⤊ 0⤋
Speak with a professional mortage loan officer. Also, you also should consider speaking with more than just one as not all loan officers use the same banks.
2006-12-16 06:54:34 · answer #7 · answered by ? 3 · 0⤊ 0⤋
Many bank sites have loan calculators. Here is another site where you may be able to calculate how much of a home loan you can afford:
http://mortgages.interest.com/content/calculators/index.asp
Good luck to you.
2006-12-16 03:29:07 · answer #8 · answered by IKAREOKE2 2 · 0⤊ 0⤋
www.bankrate.com/brm/calc/newhouse/calculator.asp
2006-12-16 03:15:15 · answer #9 · answered by dreamzindigital_20 3 · 0⤊ 0⤋