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Is there a formula to find out the price house you can afford?
Taking into account salary, savings, etc?
I'm new to this and not looking now, just saving. But it's good to have realistic expectations.
Thanks!
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Elbee
Zanzibar
Member since 5/05 10767 total posts
Name:
Me
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Re: Is there a formula to find out the price house you can afford?
go to
dinkytown.com, click on mortgage caculators
Here is what you should do FIRST, if you haven't done it already ...
write out ALL your non mortgage assets and expenses you have ....
Take the last 3 months and break out everything you spent - look at checking account, credit cards, etc .... (bills, entertainment, food, etc....)
TOTAL ASSETS (Broken out):
* Gross/ Net Salary (break it out to what you make per week, per 4 week period, per 5 week period, per 12 week period and, per year) - that will give you a good idea as to what is coming in and when --- also note how much comes out for 401k, insurance and other deductions)
* Savings
* 401K
* Stocks/Bonds/CD's/ Mutual Funds
* Etc
TOTAL DEBT:
Student Loans
Credit Cards
Other Loans
Fixed Expenses:
* Work / Travel
* Car Payments
* Car Insurance
* Electricity (average monthly bill)
* Gas (average monthly bill)
* Water (average monthly bill)
* Cell Phone
* Student Loans
Variable Expenses:
* Grocery
* Pharmacy
* Monthly Credit Card Debt
* Entertainment (dinner, take out, movies, nails, hair, waxings, etc and so on)
* Daily Expenses (coffee, breakfast, lunch, dinner, etc)
* Dry Cleaning / Laundry
* Gasoline
* Gifts
* Etc (whatever else you spend money on)
Come up with an average number you spent each month for the last three months.
Subtract that average number from what you take in per month.
That will give you an idea of what you have to spend each month on a mortgage.
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Erica
LIF Adult
Member since 5/05 11767 total posts
Name:
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Re: Is there a formula to find out the price house you can afford?
a general idea is take your GROSS salary and divide by 12 and multiply by .28. This is the max number your housing budget should be (mortgage, taxes, insurance)
take your monthly salary and multiply by .36 - this is the total debt you should have to pay each month (mort, taxes, insurance AND car payment, CC payments, student loans, etc)
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