How much house can I afford?

4 Responses to “How much house can I afford?”

1. . . on February 28th, 2007 12:50 am

   “How much house’? lol Perhaps just a garage part of it, if you’re asking.

2. Ronald D on February 28th, 2007 10:48 am

   Never commit more than 35% of you income to your home or you will be in trouble before you know it. For every 10K of your loan you will be paying around 100 per month, now you do the math.

3. igotafever? on March 1st, 2007 9:16 am

   12 thousand.

4. questions questions questions on March 4th, 2007 2:01 am

   Traditionally (prior to subprime) banks wanted to see what they called a front end ratio of no more than 30-35%. This means that your total house payment monthly would be no more than 35% of your monthly income. Make sure to include principal, interest, home insurance, home owners association dues. I am not sure if real estate taxes are traditionally part of this, but you should do this to be safe.

   A quick calculation though, if you want to be conservative (which I recommend) you should buy a house that is no larger than 2 or 2.5x your annual income. So if you make $75,000 a year, don’t buy more than a $150,000 to $190,000 house.

   Owning a home is smart investment for a lot of reasons, so congratulations on looking to buy a home.

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