This calculator will help you determine a budget for your total housing expenses.
Here is how to calculate how much you have available to pay for your housing expenses. Your housing expenses include your principal, interest, property insurance, and property taxes.
The first calculation you need to do is take your monthly income (before taxes), and multiply it by .28 (which is 28%). This is called your front-end ratio.
Next, add up your monthly debt payments. This includes credit cards, student loans, auto loans, personal loans, child support, and alimony. This does NOT include bills such as your electric bill, cable bill, or phone bill.
Next, take your monthly income (before taxes), and multiply it by .36 (which is 36%). Finally, subtract your monthly debt payments from this number. This is called your back end ratio.
Finally, determine which is smaller, your front end ratio, or your back end ratio. This is the maximum reasonable house payment.
Now of course, banks use all kinds of different numbers, such as 29% and 41%, or 33% and 45%, but the higher the percentages go, the more likely your loan is to default. The smaller your house payment, the more likely you are to get to keep the house you choose to buy!
Please view this disclaimer about this page.
Additional Matches: How to calculate how much to pay for mortage and budget?, How to calculate how much to pay for mortgage and budget?, How much should of my monthly income should I budget towards my housing payment?, How much to pay for house budget.
This entry is filed under Questions and Answers. You can track this articles comments, leave a comment, trackback from your own site, or subscribe to a site feed... rss 2.00, rss 0.92, atom 0.30.
MORE CALCULATORS at MORECALCULATORS.COM.