BUYERS' CORNER
 Can You Afford The Home You Want?
Do you have a stable income but wonder if you can afford the home your want. It may be helpful to do a quick calculation that can help you determine the price range that fits your financial situation.
| GROSS MONTHLY INCOME |
__________ |
SUBTRACT LONG-TERM OBLIGATIONS
(LONGER THAN 1 YEAR/MONTHLY PAYMENT AMT.) |
__________ |
| TOTAL |
__________ |
| MULTIPLY TOTAL X 12 TO GET ANNUAL INCOME |
__________ |
| MULTIPLY ANNUAL INCOME X 3.5 TO DETERMINE
APPROX. PRICE RANGE OF HOMES YOU SHOULD
CONSIDER
|
__________ |
This is, of course, a rough calculation. Your Realtor, lender, and an accountant can help you with the precise calculations that will take into account the uniqueness of your situation. However, this exercise will give you a rough idea of the price range where you should concentrate your search. And If you do have an accountant, he/she may be aware of circumstances, specific to your financial condition that may alter your potential price range. The tax advantages of home ownership combined with your anticipated tax bracket could significantly alter your numbers.
Once you’ve determined the price range for consideration, subtract the expected amount of down payment, and you can quickly see what the monthly payment will be for that amount. Click here for a Mortgage Calculator.
www.thehousingguru.com/misc/calculator.aspx
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