How Much Home Can You Afford?

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Determining how much you can comfortably afford on a mortgage depends on various factors, including your income, expenses, debt, and personal financial goals. While I can provide a general guideline, it's important to consult with a financial advisor or mortgage professional for a more accurate assessment based on your specific situation.

As a general rule of thumb, lenders often suggest keeping your housing expenses, including mortgage principal, interest, taxes, and insurance (PITI), within 28% to 33% of your gross monthly income. However, this may vary depending on your overall financial profile and the lender's specific criteria.

Considering your annual income of $100,000, let's estimate your monthly gross income as approximately $8,333. Following the suggested range, your monthly housing expenses should ideally be between $2,333 and $2,749.

Keep in mind that this guideline only considers the housing expenses and does not account for other financial obligations, such as existing debt payments, savings goals, or other living expenses. It's crucial to evaluate your entire financial picture and determine what you can comfortably afford without overextending your budget.

Additionally, it's recommended to consult with lenders or mortgage professionals who can evaluate your financial situation, consider factors like your credit score, down payment amount, and interest rates, and provide more accurate estimates tailored to your circumstances.

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Post originally appeared on Financial Mood.