Presenting The Lister Sisters!

How much can I really afford to pay for a home is one of the first questions you should ask yourself when looking to buy a new house. Since your monthly mortgage payment is usually one of the biggest expenses you will have, it’s an important question that can not go unanswered. This calculator should serve as a guide to help answer that question.

In the grey box below, enter your yearly income, how much you’ve got for a downpayment and your total debt payments each month, along with the amount of real estate taxes and insurance you expect to be paying each year. Once you’ve entered those items, just click the calculate button to find out what an affordable mortgage could be when you’re looking for that new home.

Here’s how we’ve based our calculations:

• To calculate an affordable home price for you, we’ve followed the guidelines used by most vendors. Typically, "debt to income" ratios should be no more than 36%. We also used a ratio of 28% for the conservative "house payment to income ratio". For those of you that would like to be a little more aggressive, the "house payment to income" ratio used was 33%. Before buying always factor in any other needs you may have including, savings, retirement and college and add them to your monthly debt payments.
• A few assumptions we’ve made to help you with this calculation: We’ve assumed a 30-year mortgage term, annual property tax of $3,500 and homeowners insurance of $481. Those are the national averages. Also, private mortgage insurance becomes a factor if your downpayment is less that 20% of the total purchase price. Quite often that will run from $50 to $80 per month. If you’ve got these pieces of information please enter them in to the appropriate fields for more tailor-made results.