How Much Can You Afford?

For a general idea of your home buying power, multiply your annual gross income by 2-1/2.

Your gross annual income is the income you earn in a year before taxes and other deductions. It can also include rental income, self-employed income, income from alimony, child support, public assistance payments and retirement benefits.

Remember that just because a lender qualifies you to buy a certain amount, it doesn't mean that you can afford or be comfortable with the monthly payments. Decide for yourself.

Use these additional tips to help you figure out what you can afford to spend on a home.

Set a budget with your estimated mortgage payment; include taxes and insurance plus the costs of any homeowners association or condo fees.
Include any financial support you send each month to relatives living in another country.
Include utility costs and future home maintenance repair costs in the budget.
Remember your other goals, like college and retirement.
Select a mortgage amount that allows you to meet your long-term goals and needs.

Calculators - Use these calculators for additional calculations

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By visiting Allie Mae you have taken your first step toward becoming an educated borrower. Allie Mae is an objective, independent source of information for the mortgage consumer. Whether you are buying a home, refinancing, taking a home equity loan, building a home or in need of a mortgage for any purpose, Allie Mae is here to help. Allie Mae has helped thousands of people with their mortgage needs. We have a complete selection of articles, charts, calculators, and checklists designed to help you through the mortgage and home buying process.

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