You’re likely asking yourself, can I afford to buy a house? The answer to that question depends on your financial situation, income, and budget. It's essential to know if the monthly payments on a mortgage will fit within your budget. This calculator helps you determine that.
Start by entering how much you think your monthly mortgage payment will be. Next, enter your monthly income after taxes. Finally, enter your expenses; add and delete categories to make your list of expenses as accurate as possible. Take a look at the results!
There’s no one-size-fits-all answer as to when the best time to buy a home really is. There are several factors that everyone should consider before taking out a mortgage. This includes...
- Steady Income: Ensure you have a stable job providing a monthly income sufficient to cover the mortgage.
- Decent Credit Score: Remember, the higher the credit score, the lower the interest rate on any potential home. A higher credit score tells lenders that you're a reliable borrower.
- Debt-to-Income-Ratio (DTI): DTI is the percentage of your gross monthly income that goes toward paying off debts each month. Most lenders prefer a DTI lower than 43% before they’ll approve you for a mortgage. A lender’s calculations include any future monthly mortgage payment when calculating a potential borrower’s DTI.
- Emergency Fund: Don’t spend your whole life savings on the down payment of a mortgage. Have enough saved that there will be an additional sum of money for unexpected costs associated with home ownership including insurance, maintenance, repairs, utilities, etc.
- Long-Term Plans: Consider future needs, such as family growth and relocation.
- Personal Readiness: Make sure you feel emotionally and financially prepared for homeownership.
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