What should your monthly mortgage payment be

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Get the bottom line on what you'll have to pay to buy a house, from one-time, move-in fees to ongoing monthly expenses. What to Expect From the Homebuying Process. Buying a home can seem complicated and scary. Don't worry, it's not that bad. Here's a breakdown of what to expect.

Calculate your mortgage. Figure out your estimated payments the easy way. Compare mortgage rates. A low rate can save you hundreds each year. Get your free credit score. See how a mortgage impacts your score.

Get preapproved. Get your true budget and find a home with ease. Find a real estate agent. Get matched with a top agent in your area. Every time. How much house can I afford? This is what you can afford in. Monthly income. Monthly payment. Mortgage payment This is the amount that you pay each month that goes toward paying down the principal of the loan and the cost of borrowing interest.

Property taxes The tax that you are required to pay as a property owner levied by the city or municipality. Homeowners association fee These are dues that are used by a homeowners association toward maintenance of common areas used by all homeowners in a housing development or complex.

Homeowners insurance The standard insurance policy that covers damage to your property and the things you keep in it. Down payment The initial portion of the home price that is required at the time of purchase. Total closing costs Overview of your total upfront closing costs required. Tweak your numbers below. Get free guidance on changes you can make to afford more house, without spending more.

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How much you can afford to borrow depends on several factors, not just what a bank is willing to lend you. You need to evaluate not only your finances but also your preferences and priorities. Here is everything you need to consider to determine how much you can afford. Generally speaking, most prospective homeowners can afford to finance a property that costs between two and two-and-a-half times their annual gross income.

However, this calculation is only a general guideline. Ultimately, when deciding on a property, you need to consider several additional factors. First, it's a good idea to have some understanding of what your lender thinks you can afford and how it arrived at that estimation. Second, you need to have some personal introspection and figure out what type of home you are willing to live in if you plan on living in the house for a long time and what other types of consumption you are ready to forgo—or not—to live in your home.

While real estate has traditionally been considered a safe long-term investment, recessions and other disasters like the economic crisis can test that theory—and make would-be homeowners think twice. While each mortgage lender maintains its own criteria for affordability, your ability to purchase a home and the size and terms of the loan you will be offered will always depend mainly on the following factors.

This is the level of income a prospective homebuyer makes before taking out taxes and other obligations. This is generally deemed your base salary plus any bonus income and can include part-time earnings, self-employment earnings, Social Security benefits, disability, alimony, and child support. Gross income plays a vital part in determining the front-end ratio , also known as the mortgage-to-income ratio.

This ratio is the percentage of your yearly gross income that can be dedicated toward paying your mortgage each month. The total amount of money that makes up your monthly mortgage payment consists of four components , known as PITI : principal, interest, taxes, and insurance both property insurance and private mortgage insurance , if required by your mortgage. Also known as the debt-to-income ratio DTI , it calculates the percentage of your gross income required to cover your debts.

Debts include credit card payments, child support, and other outstanding loans auto, student, etc.