How big a mortgage ?

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Contents:
Getting pre-approved for a mortgage.
	Mortgage basics
	Credit record
	Mortgage lenders
	Mortgage brokers
	Mortgage size
How much house can you afford ?
Where do you want to live ?
Selecting a home
Negotiating a price
Closing the deal

Calculators
	Closing costs
	Monthly mortgage payments
	Monthly cost of increasing loan amounts
	Pre-Qualification of loan amounts
	After tax cost of owning a home
	Lender's view of monthly mortgage payments





Useful real estate web sites
How to sell a house
After Buying

Mortgage Size Calculator:

The calculator below will estimate a maximum mortgage size based on your gross (before-tax) income and monthly long term obligations:
Click "Start" for an example and further instructions.

Click to

Gross Annual Income (please no commas, periods or $ signs. $98,000 should be entered as 98000))

Monthly Long Term Obligations
Enter amounts for unavoidable recurring bills listed below. Program makes statistical assumptions about food, clothing, housing and all other expenses.
Automobile
Alimony / Child Support
Credit Cards
Student Loan
Other long term debt
Total monthly Long Term Obligations

Down payment as a % of sales price:

Current Interest rate:

Estimated Affordable Price Range:

Estimated 30 Yr. Mortgage Amount:

The above numbers are for a conventional mortgage, Buyers qualifying for VA or FHA loans might get larger mortgages.

Numbers behind the calculator:

The mortgage lender's primary aim is to keep your monthly "housing expense" below 33% of your monthly before-tax income.

Where monthly "housing expense" is defined as:

Monthly mortgage payment + Property taxes + Insurance

If your maximum mortgage loan is $155,000 you can forget about that $250,000 house (unless you happen to have $95,000 for a cash down payment).
On the other hand, that charming home for $175,000 can be in your grasp if you can find $20,000 for a cash down payment.

Note: The mortgage lender's calculation ignores the cost of neat stuff like:

Maintaining the house
Remodeling the house
Filling it with furniture
Savings for college tuition or retirement

Seeking a mortgage bigger than the maximum suggested by our mortgage calculator can be justified by special situations, but in general, our maximum is at the upper end of what most people can afford.

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