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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20599 W Nelson Place Buckeye, AZ 85396

$459,999

3 Beds

2 Baths

1,623 SqFt

Status Active

MLS # 6677655

Property Type Single Family Residence

Price Type --

You don't want to miss out on this move-in ready beauty. Located in the stunning and sought after subdivision of Verrado in Buckeye. The home is in immaculate condition from ceiling to floor. Wood-like tile flooring though all the main living & walking areas. Your new kitchen offers granite countertops, breakfast bar, contemporary light fixtures, upgraded cabinetry with lots of storage space, and stainless steel appliances. The backyard has no maintenance landscaping, covered patio, and plenty of room to relax and entertain. Don't miss out on this one! It won't last long on the market. Thanks for stopping in.

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40306 W Michaels Drive Maricopa, AZ 85138

$459,995

4 Beds

2 Baths

2,370 SqFt

Status Active

MLS # 6695489

Property Type Single Family Residence

Price Type --

You'll find plenty to love about the Raleigh plan! The center of the home boasts a large gourmet kitchen with a convenient center island and walk-in pantry, which flows into an open-concept dining room and great room. The owner's suite is adjacent, with a private bath and a walk-in closet. There are three additional bedrooms and a bath off the great room and off the entry is a private study. Outside, enjoy a private backyard that backs up to a green-belt, a large front porch, and a covered patio!

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25803 N 185th Drive Wittmann, AZ 85361

$459,995

4 Beds

3 Baths

2,040 SqFt

Status Active

MLS # 6664207

Property Type Single Family Residence

Price Type --

Explore this exceptional Sapphire home, ready for quick move-in on a homesite boasting driveway pavers and front yard landscaping. Included features: an inviting covered entry; a bathroom in lieu of two closets; an impressive kitchen offering 42'' cabinets, quartz countertops, a center island; an elegant dining room, a spacious great room, teen room, a lavish primary suite showcasing a generous walk-in closet and a private bath with cultured marble countertops; a convenient laundry; a covered patio and a 3-car garage. This home also offers additional windows, wood laminate flooring and added pre-wiring through-out.

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11005 W Tonto Street Avondale, AZ 85323

$459,995

4 Beds

3 Baths

2,070 SqFt

Status Active

MLS # 6634723

Property Type Single Family Residence

Price Type --

Explore this inspired Agate home, ready for quick move-in! Included features: an alternative layout featuring a fourth bedroom and third bathroom, a covered entry; a corner kitchen boasting an alternate layout, 42'' upper cabinets, stainless-steel appliances, a center island and an adjacent dining room; an inviting great room; an elegant primary suite showcasing a large walk-in closet and a private bath with double sinks; a central laundry; two secondary bedrooms with a shared bath; a cheerful covered patio and a 2-car garage. This home also offers 12x24'' stone tile flooring, quartz kitchen and bath countertops, ceiling fan prewiring in select rooms, additional window in the dining room, coach lights, front yard landscaping and concrete pavers at the driveway and walkway.

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