One of the first thing most people should ask themselves when searching for a home is, "what can we afford?" There are many methods and calculations to determine this but the one that follows is the standard that is used. Try it out.
Step One: Determine your gross monthly income from all your sources (spouses, other income,
etc. )
Step Two: Multiply the amount above by .28 (28%),
Or
Multiply the amount above by .36 (36%) if you have no regular debt.
Step Three: Subtract your current monthly debt you pay out.
Step Four: Subtract any other monthly expenses you have now.
Step Five: This should give you your maximum monthly mortgage payment (Principle &
Interest)
Step Six: Subtract real estate property taxes and homeowner's insurance (make sure you
change these to monthly and not quarterly or six month payments)
Step Seven: This should give you your net monthly mortgage payment.
Another place to go to do this online is http://finance.move.com/
There are many other sites to check this online, just search for "How much home can I afford?"
Hope this helps. Give me a call (937-423-3316) or email (trfinch@gmail.com) or leave me a question or a comment.
1 comment:
Thanks for the info.
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