How Much Can I Afford?
This depends on many factors including how much money you have to put
down, what type of loan you can get, how much your closing costs are and
any other expenses you need to cover.
Quick estimates...
How much can you borrow? Most lenders want your housing expenses
(mortgage, plus taxes and insurance) to remain under 28% of your gross
income. Calculate 28% of your gross monthly income to see what amount
you have each month for this.
How much cash do you have for a down payment? With a conventional
mortgage a buyer typically pays 20% of the purchase price up front.
Most lenders will also let you put 10% down if you pay private mortgage
insurance. Other types of loan programs may be available that allow for
reduced down payment percentages.
How much cash do you have for closing? You will need cash at
closing (unless you have negotiated with the seller to pay your fees.)
The cash you will need at closing is typically 2-3% of the total purchase price.
Money for Additional Expenses. Keep in mind that you may need to
reserve some money for repairs, remodeling, decorating, moving expenses etc.
Click here for our mortgage calculator
that will help with the estimates.
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