How much house can I afford?
About 40% of your total income can go to all your monthly debts, the new home included. How much is left for the home depends on the debts you already have.
By Nick GutheryOwner & CEOUpdated Florida & Georgia
Lenders start from your income before taxes. Then they add up what you pay each month on a car, student loans, credit cards and any other loans. The home's payment has to fit in what is left.
Say your family makes $60,000 a year before taxes. That is $5,000 each month. About 40% of that is $2,000 for all your debts. If $400 of it goes to a car, about $1,600 is left for the home.
Paying off a small loan or card before you apply can raise what you can afford. We can tell you your real number on a short call.