MORTGAGE CALCULATOR

How Much of a Mortgage Payment Can You Afford?

There are a few key factors to consider when deciding how much you can afford to pay for a mortgage on a new home:

1. Your income: Lenders generally want to see that your monthly mortgage payment is no more than 28% of your gross monthly income. This is known as the "front-end ratio."
   
   

2. Your debts: Lenders also consider your debts when determining how much you can afford to borrow. Your monthly mortgage payment should be no more than 36% of your gross monthly income when you add in your other debts, such as car loans, student loans, and credit card payments. This is known as the "back-end ratio."
   
   

3. Your credit score: A higher credit score can help you qualify for a lower interest rate on your mortgage, which means you'll pay less each month.
   
   

4. Your down payment: The more money you can put down on a home, the less you'll need to borrow. This can help make your monthly mortgage payments more affordable.
   
   

5. Closing costs: Don't forget to factor in closing costs, which are fees associated with buying a home. These can include fees for appraisals, inspections, and legal services.
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By considering these factors and working with a lender, you can determine how much you can afford to pay for a mortgage on a new home.