{"id":112,"date":"2011-06-23T20:22:44","date_gmt":"2011-06-23T20:22:44","guid":{"rendered":"http:\/\/riverbankfinance.com\/blog\/?p=112"},"modified":"2012-12-10T17:48:24","modified_gmt":"2012-12-10T17:48:24","slug":"what-mortgage-can-i-afford","status":"publish","type":"post","link":"https:\/\/riverbankfinance.com\/blog\/what-mortgage-can-i-afford\/","title":{"rendered":"What Mortgage Can I Afford"},"content":{"rendered":"

When\"How<\/a> the time is right for you to start shopping for a mortgage the best question to ask yourself is “What Mortgage Can I Afford<\/a>?”\u00a0 While there is no easy answer to this question there are a few steps you can take to make sure you are getting a mortgage with affordable mortgage payments for your situation.\u00a0 Personally, I would recommend speaking with a Licensed Mortgage loan officer in your area so you can review the costs and benefits of all types of mortgages available however doing your own research is also valuable.<\/p>\n

If you are the type of person whom prefers to do their own research then the first thing is to start with yourself.\u00a0 What other types of bills do you currently have?\u00a0\u00a0What types of bills will you soon have (example: Car is about to die)?\u00a0 Will you need to make any major purchases soon (example: house need a new roof)?\u00a0 Is there a chance my income could be significantly reduced (example: loss of sales commission)?\u00a0 Taking these factors into consideration you will be better prepared to judge what mortgage is best for you to afford.\u00a0 The last thing you want is to buy a home with mortgage payments higher than you can afford.\u00a0 This happens more often that you would care to hear of because people did not take the mentioned questions into consideration prior to buying a home.<\/p>\n

Mortgage qualifications these days are based on your Gross Income or total income before taxes.\u00a0 This is usually the largest number on your pay stub.\u00a0 What you need to figure is your monthly income.\u00a0 If you get paid hourly then multiply your hourly wage x the hours worked each week then multiply this number by 52 weeks in a year; Example $10 per hour x 40 hours per week = $400 x 52 weeks in a year\u00a0= $20,800 annual income.\u00a0 Since we need your monthly gross income, divide this number by 12; example $20,800 \/ 12\u00a0= $1733.33 for your Qualifying income.\u00a0 For most mortgage loans, the highest acceptable mortgage payment for your income should be 31% of your gross income which would be $537.33 per month.\u00a0 This number should include your principle, interest, property taxes and home owners insurance.<\/p>\n

Now that you know the most you can afford for your mortgage payment you can use a mortgage calculator<\/a> <\/strong>to figure out what your mortgage payment would be based on the amount of money you borrow.\u00a0 The more your borrower the higher your payment will be\u00a0therefore the more expensive the home, the higher your mortgage payment.\u00a0\u00a0 If you have money saved you can always put a larger down payment on a purchase of a home to lower your mortgage payments.\u00a0 This may be a good option to consider as many mortgage types offer lower interest rates with larger down payments.<\/p>\n

The last thing to know to answer, “What Mortgage Can I Afford<\/strong>?” is what type of mortgage is best for your situation.\u00a0\u00a0 For many first time home buyers or those with imperfect credit, a FHA mortgage may be your best option.\u00a0 If you have excellent credit established and a larger down payment then a Conventional Mortgage may have the lowest mortgage payment for your situation.\u00a0 If you have no money for a down payment then try a no down payment mortgage like a USDA Rural Housing mortgage.<\/p>\n

For more information on what mortgage payment you can afford try an Affordable Home Calculator<\/a> from CNN.com or a New House Calculator <\/a>from BankRate.com.\u00a0 To get free professional advice call a mortgage company and ask about your mortgage options.<\/p>\n

Request Help From a Mortgage Professional<\/h2>\n\n
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