How much can I afford?
Lenders will typically limit the amount you spend on housing to a maximum of 32% of your monthly income. Depending on your credit score and outstanding debt, you will qualify for more or less than that. It's best to talk with a lender about your particular situation and to best understand the various loan programs that may help with affordability.
In the meantime, you can use this online Mortgage Qualifier calculator to get an idea.
What are the components of my monthly mortgage payment (PITI)?
The four main components of a standard monthly mortgage payment are:
Principal - the amount allocated towards reducing your original loan amount.
Interest - the amount charged by the lender as interest on the loan.
Taxes - the monthly allocation of your annual property tax.
Insurance - the monthly allocation of your annual homeowner's insurance policy.
With Condominiums and Lofts, the Homeowner's Association dues typically cover insurance on the structure. You will still need insurance to cover the interior finish-out and contents, but you will be able to get this for less money than an all-inclusive insurance package.
Speaking of Homeowner's Association (HOA) dues, you will need to add those to the four components above. Most online mortgage calculators do not include taxes and interest, leading consumers to think they can afford more than they realistically can. You can use this online Mortgage Calculator with PITI to get a more comprehensive calculation. Just remember - you will still need to add the amount of the monthly HOA dues.
Online Mortgage Calculators
Interested in finding out more about different loan programs, the effects of different interest rates or different payoff plans? This Mortgage Calculator site has many tools to answer all your questions. The site is not affiliated with any lender, so you will not be bombarded with advertisements or pop-ups. Happy Calculating!
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