Question:

How much mortgage payment can I afford?

Answer:

To find out how much mortgage payment you can afford you will need to take into account all your financial details. For your convenience, you could make use of online mortgage calculators to calculate how much house and mortgage payment you could afford.

Income Details

  • How much is your income?
  • Do you have investments and what is the yield?
  • Do you have a retirement plan, or IRA?
  • Any other source of income (alimony, gift, inheritance, etc.)

New Mortgage Details

  • Your new loan amount, term and interest rate,
  • Property taxes,
  • Homeowners' insurance.

Any Other Debt

Information about other mortgage loans, car loans, college loan, credit cards, utility bills, etc. also has to be considered.

The sum of the expected monthly mortgage payment and your other monthly expenses divided by your total monthly income will provide your total housing ratio, used by lenders to determine whether or not you qualify for the desired loan amount.

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