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   HOW  MUCH  HOME  CAN  YOU  AFFORD? 

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 Use this form as a guideline.   At bottom click to print blank form to work on yourself
                 
              DEBT NO DEBT
          Spouse 1 Spouse 2 COLUMN  A COLUMN B
  Annual gross income before taxes:   $70,000 $20,000 $90,000 $90,000
 

Divide by number of months/yr:

 divide by 12 divide by 12
 

Put monthly gross in each column Total Gross Monthly Income

 $7,500 $7,500
 

In situation of  "No Debt"  many lenders require that 28% of your monthly gross income should be reserved for your total house payment, including taxes and insurance. Multiply $7,500 by 28%: 

 x .28

  Maximum monthly housing expense -- No  Debt

  

$2,100
In situation of "Debt"  where you have a number of monthly payments  then lenders require 36% of monthly income
 When you have a number of monthly payments "Debt" then lenders require 36%  of monthly income be set aside.  Therefore, multiply the gross monthly income in column A  $7,500 by 36%:

x .36  

  

 Long-term monthly expense allowance -- With Monthly Debt

2,700

  

 Figure  your monthly long-term debt payments below and subtract  from long-term monthly expense allowance 
    Auto loan  $300    
    Child support    $275    
    Credit cards (more than10 mo. due)   $600    
    Association fees   $140    
    Student loans   $220    
    Other1   $0    
    Other2   $0    
    Other3   $0    
   Total your monthly debt payments -- and subtract from the $2,700 (1,535)

Enter same number
as above
  Monthly  housing expense allowance -- Debt / No Debt $1,165 $1,867
  Enter the smallest number in column A or B in box at right $1,165  
  About 20% of housing expense is for taxes and insurance.  This leaves 80% of monthly allowance for mortgage payments (principle & interest) 

x .80  

x .80  

 

  This is the  mortgage payment you can afford

$932

$1,680
   Now enter each of these values in the mortgage calculator to get your affordable mortgage amount.  Also the interest rate and the term of the loan (usually 30 years). The mortgage amounts obtained from the calculator are $121,210 and $218,490 for Debt or No Debt situations respectively and are entered in the boxes at the right >>>>

$121,210

$932
8.5%
  30 Yrs

$218,490

$1,680
8.5% 
 30 Yrs
   To get sales price of an affordable home, divide $121,210 by .97 if you intend to make a 3% downpayment   ( or by .9 if 10% D/P    .85 for 15% D/P    .80 for 20% D/P and so on )  
  The sales price of a home you can afford:  $124,959 $225,248
 

The maximum list price of a home  to look at is

 $132,456 $238,762
 

 This assumes that the home is listed 6% over the real market value. In 1999 and 2000 the average home is selling  for about 95% to 97% of the listed price in Martin County, Florida. 
 
 

Now calculate Cash-To-Close.   A 3% down payment  =

 $3,749 $6,757
   Loan settlement expenses are about 5% of  loan amount:  $6,060 $10,925
 

Cash Needed To Buy The Home Is  

 $9,809 $17,682
  With Debt No Debt

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