I will be buying my 1st house this spring and would like to know how much "house" I can afford. My gross income in about 65k/yr and the only debt I have is a car payment of $222/mo. My credit score is 726,774,779. I have about 125k in CDs/money market and plan on using 40k of that for a down payment. I don't want to be "house poor" but on the other hand do not want a fixer-upper as it will be just me buying this house. My questions are what can I afford comfortable and will I have a problem getting a loan with the info I just provided? I plan on staying in the Albany Ny area.

As long as you are buying a house with monthly / yearly payment less then 28% of your gross income there should be no problem, if you have 5% or more down payment then you are all set. I am not a mortgage broker only answering based on my personal experience. A good mortgage broker can always play tricks to get you loan.

Bovat,

I'm not a loan officer, so take this for what it is worth. If you make 65K a year, then you roughly make around 5,500 monthly before taxes. You need to just look around on places like realtor.com and see what houses are going for in your area, based on what the criteria you NEED is. Then, subtract your 40K, take that number, and take off the three zeros on the end, multiply what is left by a standard interest rate, around here ours is typically 6-7%, so I always tell my clients to multiply that number by 7. When you do, that is what your payment will approximately be BEFORE adding taxes and insurance. I don't know what the tax rate is in NY, but I'm sure it's not cheap, so add to that several hundred dollars to account for those things. Here, our taxes are realitvely inexpensve (knock on wood), and the average person around here pays about 100-150 monthly for tax, but NY I am almost positive is quite a bit higher. Anyway, look at that number and see if that is something you could live with paying, if you see that you may have a hard time paying for that each month, then maybe you'll need to put more of a downpayment down, or look for a house that has fewer wants/needs.


Here is an example:

Price: 300,000
Down Payment: - 40,000
New Total: 260,000

Take 260 x 7 = 1,820 (this will approximately be the Payment and Interest monthly). Add to it the appropraite amount for Taxes and Insurance, for the sake of this I'll say add 680 just so we have a round number of 2,500 a month.


Once again, I am not a loan officer, this is just a hypothetical situation, and just something to think about! Good Luck

Call a Mortgage Broker, that formula makes no sense at all.

I don't know what you will comfortable with, but you will be able to qualify for a debt to income ratio of around 45% if you want.

I like it.. But,

Loan amount x rate divided by 12 = Monthly Interest Charges. So close.

Here is where I start and it is not a formula.

How much do you pay for your housing payment now?
Do you pay your own utilities?
Is this payment comfortable?
Do you find yourself living pay check to pay check, unable to save money, or using credit instead of cash while making the payment?

How much do you feel you can comfortably afford for a house payment including property taxes and homeowners insurance? Keep in mind you will have utilities and you will be responsible for any repairs needed to the home.

After you give this information I will let you know if it is realistic for loan qualification. A good rule of thumb is to limit your mortgage payment to 1.5 weekly net pay checks. Using a % of your gross pay does not account for your pay deductions such as investments or child support payments.

Advice: If you put 20% down you get the best interest rate, there is no PMI (Private Mortgage Insurance) and any additional down payment beyond that is just lowering the amount you finance and your monthly payment or allowing you to afford a more expensive home.

I feel this poster may not return though.