Buying
Guide
How
Much House?
Qualifying
How Much Can I Afford?
Sources For Down Payment
How to Reduce Down Payment
One Caution
Figuring Housing Budget
Two Lender Formulas
More Mortgage Help
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Figuring
Your Housing Budget
Generally, lenders figure that the home buyer shouldn't pay more
than 28-38 percent of gross income for PI.TI. payments, or 36-38
percent for both P.I.T I. and monthly debts combined. This might
be a little more or a little less depending on other outstanding
long term debts (more than 10 months), alimony/child support payments,
number of children and their ages, and other household budget items.
The
easiest way to make a quick estimate of the mortgage amount you
may qualify for requires applying the two basic formulas for loan
application that lenders use. Keep in mind the loan balance will
vary over the term of the loan, although the monthly payment remains
the same.
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