How to Figure Out What Mortgage You Can Afford. According foreclosure statistics provided by Neighbor Works America, 43 percent of American households spend more than they earn each year and, on average, 1 out of every 200 homes will be foreclosed on. Figuring out how much you can afford, and buying within your means, can help you avoid foreclosure.

Mortgage Type: The type of mortgage you choose can have a dramatic impact on the amount of house you can afford, especially if you have limited savings. FHA loans generally require lower down payments (as low as 3.5% of the home value), while other loan types can require up to 20% of the home value as a minimum down payment.

Prepare To Buy A Home Ways To Financially Prepare To Buy A Home. Many home buyers have been haunted by the problem of being able to save up enough money in order to buy a house. Though seemingly difficult, it is much simpler than how it appears to be. Since buying a house is a financial commitment, various factors have to be considered and home buyers need the.

Using the middle of the road formula or rule of thumb, that means the median household in the high income states can afford a mortgage around 2.5 X $60,000 or $150,000. Unfortunately, the median house price (half above, half below) in these states is still over $300,000.

Buyer Tips For Real Estate 5 Tips for Buyers in a Tight Housing Market | www.nar.realtor – The National Association of Realtors, "The Voice for Real Estate," is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

How did Research Maniacs calculate how much house you can afford if you make $45,000? Research Maniacs checked with different financial institutions and found that most mortgage lenders do not allow more than 36 percent of a gross income of $45,000 to cover the total cost of debt payment(s), insurance, and property tax.

This amount will need to be at least 3.5% of the mortgage, so the less you can afford to put down, the less house you can afford. Best Mortgages For First Time Home Buyers Best cities for first time home buyers – cnbc.com – New data from LendingTree ranked the best cities for first -time home buyers , where down payments are typically low and mortgages can be easier to secure.

I guess what I really need to know is how do lenders determine how much house I can afford? Do they use some kind of income formula, like a.

How Much House Can We Afford? This is the most challenging. First, they Google “How much house I can afford?” and find a calculator or two.

When Can I Afford A House How Do I Afford A House Here’s another simple way to look at it. Take your gross monthly income (that’s income before taxes are taken out) and multiply it by 45% – or .45 on your calculator. Then subtract your minimum monthly payments on any of your consumer debts. What’s left is the amount you generally can “afford” for a mortgage payment.Home Affordability Calculator. This calculator will give you a better idea of how much you can afford to pay for a house and what the monthly payment will be. home affordability calculator 1. Monthly Income Before Taxes $ 2. Down Payment $ 3.

 · The golden rule in determining how much home you can afford is that your monthly mortgage payment should not exceed 28 percent of your gross monthly income (your income before taxes are taken out). For example, if you and your spouse have a combined annual income of $80,000, your mortgage payment should not exceed $1,866.