Affordability Calculator

It really is very important to first of all estimate as honestly and thoroughly as possible the amount of money you will be able to spend monthly (or even more often than that) on your home, i.e. on just having the walls and the roof; plus you’ll have to pay even more, if you want to have them decorated.

Input Information
Loan Information
Down Payment :
Interest Rate : (%)
Length : (Yrs)
Estimated Front Ratio : (%)
Estimated Back Ratio : (%)
Income Information Debt Payment Information
Income 1 : ($) Auto Loans : ($)
Income 2 : ($) Student Loans : ($)
Income 3 : ($) Installment : ($)
Income 4 : ($) Revolving accts : ($)
Income 5 : ($) Other Debt : ($)
Taxes And Insurance Information
Annual Taxes :
Annual Insurance :
Annual PMI :
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Name :
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Financial Analysis (Switch to Plain English)
Monthly Principal & Interests : $1,540.80
Monthly Real Estate Taxes : $250.00
Monthly Insurance : $125.00
Monthly PMI : $119.59
Total Monthly Payments : $2,035.39
Monthly Income : $8,000.00
Monthly Debt Payments : $910.00
Actual Front Ratio : 25 %
Actual Back Ratio : 37 %
Amount : $287,000.00
Down Payment : $31,800.00
Home Value : $318,800.00
Plain English Help (Switch to Financial Analysis)

This is the point to start your house hunting. You always have to know in advance how much of a home you can afford. A lot of parameters and details matter: your income, debts and other financial obligations you already have, the prospect down payment, taxes and insurances, and, of course, the characteristics of the mortgage plan you are going to choose.

The estimated front and back ratios help you limit your housing and other necessary living expenses. The front ratio is the percentage of your gross income that you can spend on all housing related expenses, including property taxes and insurance. The back ratio is the percentage of your gross income that you can spend on your housing expenses plus the cost of shelter: food, clothes, gas, etc.

Nowadays, the front / back ratios with values of 28-33 / 36-42 are considered to be conservative; values bigger than 35 / 45 are called aggressive and not recommended for use.

Considering all this, if you make a $31,800.00 down payment and get a 30 year loan with a 5.000% interest rate, you can afford to purchase a home that costs $318,800.00 if your gross household monthly income is $8,000.00 and your total monthly payments on your other bills are no more than $910.00.

If you purchase a home under these conditions, you should expect to pay $2,035.39 per month towards your mortgage. $1,540.80 of this amount will be towards the actual loan, while $250.00 will cover the taxes and $125.00 - the insurance.