Looking to buy a house but not sure how much you can afford? MSN Money has put together a quick calculator that can give you a better idea of where you stand right now in a matter of minutes. This is a great tool to use prior to meeting with a lender so that you have some type of idea of what you can afford. This calculator may be a good thing to use if you are already interested in a home but not sure if you can afford it, but it is also a good way to see where you currently stand. The results may surprise you, and may help you reevaluate your monthly expenses and start setting up a budget for yourself.
When you are looking to buy a home mortgage lenders are not just looking at your current income, assets, and the down payment you are able to make. They are looking at much more. The Homebuying Calculator that MSN has put together gives you an idea of the other items they may be looking at in their evaluation. These items can include your current liabilities and obligations; including car loan, any debt you may (i.e. Credit cards), or current monthly fees and expenses that you regularly incur.
We suggest you check out the link below if you are looking to purchase a home in the next 3-6 months. Visit the MSN website and test out the Homebuying Calculator to see what it says you can currently afford. The calculation goes along with the assumption that you monthly housing allowance cannot exceed 25% of your total monthly income, and your total monthly obligation, including housing allowance and other current obligation, cannot exceed 26% of your monthly income. Once you have put in all your information, you will receive a table that will give you an idea of the home value you can afford as well as tell you how much of a mortgage you will be able to obtain, the payments you will need to be making, and your average debts and obligation. Don’t just use it once, you can play around with the mortgage interest, number of years, as well as including insurance needed.
Homebuying Calculator: MSN Money