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Figuring House Payments
If you want to determine how much home you can afford to buy there is a two step process beginning with your monthly gross income and then second, your
total long term debt. Figuring
house payments is one of the first steps in determining what price range home you will be able to shop for. When you determine the amount you have available for a down payment and closing costs, and how much mortgage money you will have available, then you will know what price home you can purchase. If your monthly house payment (including escrows) combined with your other long term indebtedness exceeds the allowed amounts then your ability to borrow the maximum amount for a home may be decreased.
When trying to determine the price range of homes you should consider, you must first take into account your
desired Monthly Payment. Only after Figuring house payments and
you have identified a comfortable monthly payment that is within your reach can you determine an acceptable purchase price. Figuring
house payments is a step which really should be completed before you ever even begin to look at homes. There's a lot to know about buying a house, and taking the time to learn things that don't apply to you may only confuse and overwhelm you, and distract you from the things you do need to know.
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