How Much House Can I Afford?

Home Buying

As you begin to shop for a home, knowing how much house you can afford is a critical first step. The best way to determine your affordability is to meet with a reputable mortgage lender. The purpose will be to discuss your financial situation and prequalify for a home loan. During this process, known as prequalification, a professional mortgage lender will be happy to help you without further obligation to prequalify for a home loan. For a rough estimate of the house payment you can afford, you may follow the steps here:



Multiply Total Gross (before taxes) Monthly Income (self + any
co-borrowers) by .28 to get your Estimated Maximum Monthly House Payment.
$ x .28 = $




(A) Multiply your Total Gross Monthly Income by .36. $ x .36 = $
(B) Add together your Monthly Installment Debts. (Include all debts with 10 or more payments remaining, e.g., car, credit cards, child support / alimony)
(C) Subtract the answer (B) from (A) to get your Estimated Maximum Monthly House Payment (principal, interest, taxes and insurance) (A) $ - (B) $ = (C) $ *


* If a difference exists between the amounts of your Estimated Maximum Monthly House Payment in Step One and Step Two, use the lesser of the two as your guideline. Before a lender makes a decision regarding your loan, additional information will be requested (credit history, other income sources, etc.). Formulas and ratios may vary based on loan type and lender.



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Macon Office
2960 Riverside Drive,
Suite 200 Macon, GA 31204
478-757-6988 - Fax
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Warner Robins Office
151 S. Houston Lake Boulevard, Suite 140
Warner Robins, GA 31088
478-953-3913 - Fax
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