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How Much Can I Afford to Spend on A House

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					 How much can I afford to spend on a house?
  You might learn that you can afford more home than you thought. Or you might not have any idea at all about what
  you can afford. Use this very easy worksheet and you’ll be steps ahead in understanding how much a lender can
  lend to YOU.

  We’ve given you an example to use as a guide as you complete this worksheet with your own information.
  If you have any questions or need help, please call me. My name and contact information are at the bottom of this
  page.

                                Step by Step Worksheet                                                                Example                      You
           1. Gross Annual Income                                                                                         $30,000             $________
            Enter your gross annual income (all the money you [and your co-
           borrower if you’re going to have one] earn in a calendar year)
           2. Gross Monthly Income                                                                                         $2,500             $________
               Enter your gross monthly income (divide line 1 by 12)
           3. Monthly Allowable Housing Expense and Long Term Debt                                                         $1,025             $________
           Calculate your monthly allowable housing expense and long term debt
           (multiply line 2 by .41 [41%]. This portion of gross monthly income is
           usually allocated for principal, interest, taxes, hazard/flood insurance and
           other monthly long term debt.
           4. Monthly expenses
           A. Estimate your monthly expenses for items such as car loans, child                                             $300              $________
           support, credit card, and other installment loan debt.
           B. Subtract your monthly long-term obligations ($300 in the example)                                             $725              $________
           from the amount on line 3. This is your Monthly Allowable Housing
           Expense.
           5. Principal and Interest Monthly Payment                                                                        $580              $________
           Multiply the amount on line 4B by .80 (80%). This is the amount of the
           Monthly Allowable Housing Expense usually allocated to the principal
           and interest payment only, excluding taxes and insurance.
           6. How much Mortgage will this payment buy?                                                                    $96.740             $________
            Using the interest Rate Table below, select an interest rate and multiply                                     (at 6%)
           your Principal and Interest payment on line 5 by the number below it.

                                               Interest Rate Table
              5.5%            6.00%             6.50%       7.00%                   7.50%           8.00%
             176.122         166.792           158.211     150.307                 143.017         136.283

        7. Planned down payment                                                                                           $2,200              $________
            How much money do you plan to put down? Amounts usually range                                               (at 2.27%)
            from 2.25% to 20% of the purchase price of the home.
        8. Purchase Price                                                                                                $98,940              $________*
           Add the amount of your planned down payment (line 7) to line 6.                                                (will be
            This is the price you can pay to purchase your new home.                                                    rounded to
                                                                                                                         $98,950)

  Interested in learning more?
*This is only an estimate for a 30 year loan based on the dollar figures inserted above. The actual amount may vary depending on the actual circumstances of each borrower.
  Call me today.

				
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