mmKnowing what you can afford it a big part of buying a home. Your may be surprised to find out what size of a home you can afford. Especially with the low rates, grant money, and 100% financing options! Here is a little tool you can use to calculate how much of a mortgage you can afford.
The following calculation assumes a 28 percent income tax bracket. If your bracket is higher, your savings will be, too. Based on your current rent, use this simple calculation to figure out how much mortgage you can afford.
Rent: _________________________
Multiplier: x 1.32
Mortgage payment: _________________________
Not only does owning a home give you a haven for yourself and your family, it also makes great financial sense because of the tax benefits — which you can’t take advantage of when paying rent. Because of tax deductions, you can make a mortgage payment — including taxes and insurance — that is almost 1/3 larger than your current rent payment with the same amount of income.
Now that you know what you can afford, do you want to look at some homes in your price range?
About the Author:
Utah Dave - Daybreak Neighboorhood Expert and Local Resident
My friends nicknamed me Utah Dave in high school because they said it didn't matter where we went in Utah, I would know how to get there and who we needed to talk to. The name sticks today as UtahDave has formed into a professional real estate network of Neighborhood Experts all across the state. I live in Daybreak with my wife and 4 amazing children. I enjoy dancing (which is how I met my wife Dawn) as well as traveling, coaching, and learning.
