How did you know what you could afford?

My FH and I just started looking at houses. How did you know what price range to look at? Is there some mathematical formula to figure out what we can and can't afford? Thanks!!

Re: How did you know what you could afford?

Here is a link for you to figure out the calculations:

How Much Home Can You Afford?

Re: How did you know what you could afford?

Thanks Misha!!! That is SO helpful!!!

I can't believe how expensive everything is!!!! AHHHHHH

Re: How did you know what you could afford?

You could also go to lendingtree.com and apply for pre-approval - this is NOT a committment - DH and I recently did it and a few different banks came back with pre-approvals for us. (Lending Tree sends your info to several banks). We were surprised by the amount we were approved for and decided to start looking!

Re: How did you know what you could afford?

---

Posted by Misha

Here is a link for you to figure out the calculations:

How Much Home Can You Afford?

---

AHHHHH I just did it and it came back with $228,599!!!!!

No way can I find a house that cheap!

Re: How did you know what you could afford?

---

Posted by julz33

---

Posted by Misha

Here is a link for you to figure out the calculations:

How Much Home Can You Afford?

---

AHHHHH I just did it and it came back with $228,599!!!!!

No way can I find a house that cheap!

---

you could in NJ

Re: How did you know what you could afford?

hey julz, the house i could afford is $164,000!!!

Re: How did you know what you could afford?

I dont believe those calculators! OUrs came back really low but I worked out the numbers about 100 times and know we can afford more! I think those calculators are made for people who live in a normal housing area.
I just made a list of all our expenses, added in house expenses (food, gas, electric, phone, cable) (I got #s from people here and from friends who have homes) and then added in a buffer amont (just in case I guessed low) and went from there.
Good Luck!

Re: How did you know what you could afford?

I just used his calculator and came up with a a house more than 100K less that what DH and I paid for ours. I think you need to figure out how much of a down payment and how much you can pay for a monthly mortgage - assuming expenses will go up with a house. Also, make sure you have a safety net as well -there are a lot of hidden costs you don't realize when you first buy a house. Sorry I don't have a better formula for you. DH is a finance guy - so he did all the number crunching for us when we bought our house and figured out our budget.

Re: How did you know what you could afford?

Thank you all so much for your input!! I'll keep you posted!!

Re: How did you know what you could afford?

your mortage should not be more than 38% of your income -- to be comfortable, thats what they say.

Re: How did you know what you could afford?

We actually had a mortgage broker sit with us and go through the numbers and the different mortgage options. We never imagined that we could afford our house...but with her help and creativity - we worked it out!

Good luck!

Re: How did you know what you could afford?

Sounds like a great broker - if anyone has any suggestions as to who to go to,please FM me....Thanks