To determine how much house you can afford, you should subtract your monthly income from the number of mortgage payments. This figure is based on a fixed-rate mortgage. The total monthly mortgage payment should not exceed 28 percent of your income. Your monthly mortgage payment includes property taxes, property insurance, and your mortgage payment. Your total debt payment should not be more than 36 percent of your pre-tax income.
In addition to the mortgage payment, you also need to account for property taxes, insurance, and other debts. Using a home affordability calculator is a good way to see what your new mortgage payment will be. A monthly mortgage payment will include your interest and principal balance.
If you have no other debt, you should be able to afford a house between $144,000 and $195,000 in price. However, the exact amount you can afford will depend on your credit score, down payment, and location. If you have $115 000 in income, you can afford to pay $35,000 in housing costs per year. This amounts to $2,916 a month, including the principal payment.
A home affordability calculator can help you determine what size house you can afford with your current income and debt. This tool allows you to input the amount of down payment you have saved, the amount of your monthly debt, and the interest rate on your mortgage. Zillow’s calculator makes it easy to enter your payment details and gives you helpful suggestions for each one.
The size of your down payment and the interest rate are two main factors affecting the size of your mortgage. A higher down payment and lower monthly payments will allow you to afford a larger house. The length of your mortgage also plays a role in the total mortgage payment. A 15-year mortgage will give you more time to pay off your mortgage, which means that you can afford a more expensive house.
Another factor that should be taken into consideration is your debt to income ratio. Ideally, your debt to income ratio should be 36% or lower. Housing costs, including current rent payments, should be no more than 29% of your income. It is also advisable to have three months worth of housing expenses saved. Once you have calculated your housing expenses, it will be easier to determine how much house you can afford.