How much mortgage can I afford?
The amount of mortgage you can afford will depend on several factors, including your income, credit score, and debt-to-income ratio (DTI). Lenders typically look at these factors to determine how much you can afford to borrow for a mortgage. There are many loan products that CapCenter offers and every situation is unique. We recommend speaking with our licensed loan consultants to see what you may qualify for.
However, a general rule of thumb is that your monthly mortgage payment (including taxes and insurance) should not exceed 28% of your gross income. To calculate this, you can use the 28/36 rule, which states that your monthly mortgage payment should not exceed 28% of your gross income, and your total monthly debt payments (including your mortgage) should not exceed 36% of your gross income.
To calculate your maximum mortgage payment using the 28/36 rule, you can follow these steps:
- Determine your gross income. This is the amount of money you make before taxes and other deductions.
- Multiply your gross income by 0.28 to find the maximum mortgage payment you can afford.
- Use an online mortgage calculator to estimate the mortgage amount you can afford based on the interest rate, loan term and other factors.
Keep in mind that these are general guidelines, and your ability to afford a mortgage will also depend on your personal financial situation and the specific terms of the loan. It is always a good idea to consult with a mortgage professional and/or a financial advisor to determine the maximum amount of mortgage you can afford.