Wondering How Much Mortgage You Can Afford? Here’s How to Calculate It

Many people are aware of the financial commitment that is involved when investing in a home, but what that amounts to is different for every person. From what you can afford to what a lender will allow, there are plenty of details involved in determining the right home for you. If you’re not quite sure what the right price is, here’s how to approach home ownership and determine your debt-to-income.

Utilize the Calculators on My Website

Visit my website at www.JPCookAZRealEstate.com.  Click on ‘Buyers’ then utilize the Affordability Calculator, which will tell you how much house you can afford with your current income and expenses.  You can also utilize the Mortgage Calculator to determine how much your monthly house payment will be.

Do it Yourself:  Calculating Your Debt-To-Income Ratio

You may not know what your DTI ratio is, but it has a lot to with how much home you can afford. In order to calculate this amount, add together all the debts you owe each month and divide them by your monthly pre-tax income. For example, if your credit card is $150 and your rent is $900, your debt amount would be $1050. Divide this amount by your income, say $2500, to get 0.42. This means your DTI ratio is 0.42 or 42%.

What Your DTI Means

While a DTI in the high 20s or low 30s is good, anything that hovers above 43 percent may serve as a red flag to the lender. The lower your DTI ratio is, the more likely it is that a lender will approve your mortgage application since you’ll have the disposable income to deal with financial hurdles. If your dream home has you hovering close to this amount, it may be a sign that it’s a bit out of reach.

How Do You Want To Live?

It’s quite common to be taken over when you find your dream home and decide to commit. However, buying a home is a huge financial commitment, and if you’re buying more than you can afford it may drain your well-being over time. Instead of diving in, determine other expenses that are likely to come up in the next few years, whether it’s travel, a child or a new car. It’s important to have the home you want and budget when buying it, but you’ll still need to financial wiggle room in case something comes up.

There are a lot of factors involved in determining how much house you can afford, but by calculating your DTI ratio and being aware of your spending plans, you’ll be well on your way to an ideal price range.  Give me a call for more information – J.P. Cook – 602-320-4253.

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25528 N 160 Lane Surprise, AZ 85387

$458,590

4 Beds

3 Baths

2,049 SqFt

Status Active

MLS # 6669076

Property Type Single Family Residence

Price Type --

Brand new, energy-efficient home available by Mar 2024! Large great room and dining space. The kids can create their own play space in the included flex space. White cabinets with white granite countertops, modern gray tile flooring with greyish brown carpet in our Distinct package. Come tour our five brand-new models at Paloma Creek. Envision your next chapter by experiencing the exclusive amenities including a clubhouse, pool, and future fitness center. Pick from a variety of floorplans featuring walk-in closets and flex spaces. Each energy-efficient home comes standard with features that allow your whole family to live better and breathe easier too.* Visit Paloma Creek today. Each of our homes is built with innovative, energy-efficient features designed to help you enjoy more savings.

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8219 E Mcdonald Drive Scottsdale, AZ 85250

$458,500

2 Beds

2 Baths

1,248 SqFt

Status Active

MLS # 6641453

Property Type Townhouse

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Stunning full industrial modern townhome renovation! No expense spared on this one. Brand new kitchen with ceiling raised to 8'. Shower added to convert to 2 full bathrooms. Laundry moved upstairs. Polished concrete flooring on 1st floor with exposed CMU block wall. LED accent strip lighting throughout. WIFI light switches so you can control your lighting from your devices. The backyard was also updated. New wood fencing to create a warm ambiance, along with new cacti and rocks against a black accent wall. This home will not disappoint!

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20323 N 273rd Avenue Buckeye, AZ 85396

$458,400

2 Beds

2 Baths

1,961 SqFt

Status Active

MLS # 6668685

Property Type Single Family Residence

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Embrace Southwestern living in this luxurious turn-key 2-bed, 2-bath home. A custom landscaped courtyard welcomes you into a fully furnished retreat featuring an open floor plan, chef's kitchen with SS appliances, cabinets with rollout shelves, and a charming breakfast area. Flexibility is found in the office/den with French doors. Enjoy the convenience of an insulated 2-car garage and additional 3rd car garage. The primary suite boasts an en-suite bathroom w/dual sinks, a soaking tub and shower alongside a spacious walk-in closet. Custom interior and exterior features abound. Relax on the outdoor covered patio with a natural gas BBQ grill, creating the perfect space for entertaining. Your dream home is move-in ready plus a new HVAC & HW Heater!

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39302 N Kaden Lane San Tan Valley, AZ 85140

$458,018

2 Beds

2 Baths

1,645 SqFt

Status Active

MLS # 6692754

Property Type Single Family Residence

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Up to 2% of total purchase price towards closing costs incentive offer. Additional eligibility and limited time restrictions apply. MLS#6692754 May Completion! Explore the Kaibab floor plan within the vibrant 55+ community of Ovation at Meridian. This charming single-story design spans 1,645 sq. ft. and features 2 bedrooms, 2 bathrooms, and a 2-car garage. As part of the Adventure Series, it prioritizes privacy with distinct owner's suite and bedroom zones. Upon entry, you're greeted by a welcoming foyer leading to a generous kitchen and gathering space. An optional flex room adds versatility, ideal for a dining area or third bedroom. Perfect for individuals seeking seamless room-to-room privacy. Structural options include: upgraded square corners, 5' baseboards, backyard turf.

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