Sunday, January 17, 2010

How much home can you afford?

Have you ever wondered how much "home" you can afford?  This is not an uncommon question.  Even though this is probably one of the best times to purchase a home, it is equally important that you purchase a home within your means.  In other words, the reason why we are in the economic recession is because of careless lending and individuals who did not understand how much home they could (and could not) afford comfortable within their means.

Below is a great calculator that will help you understand how much home you can afford based on how much monthly you are willing (and able) to pay for the mortgage.   The calculator only calculates the amount of outstanding mortgage you can afford.  So if you happen to come across a large inheritance, IPO, or other source of saved money for a sizable down payment, you can add that sum directly to the output.

Please also keep in mind items that are not calculated with this tool include property taxes (which can be easily over $10,000/year), repairs, remodels, or HOA expenses.

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