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Janu Zean

Kobenhavn, Denmark, Denmark


Member since April 05, 2013

  • 5 Ways to Calculate How Much House You Can Afford

    Particularly for those looking to buy their first home, the big question is always, “How much house can I afford.” I can still remember my wife and I trying to crunch the numbers when we bought our first home back in 1993. I was scared to death that we wouldn’t be able to afford the mortgage payments. But we did, and as the months and years went by, our mortgage payments became more manageable. If you’re considering buying a home, it helps to have an idea of how much you can afford. It’s very important to think of this question from two different perspectives. The first is simply how big of a mortgage will you qualify for. The answer to this question depends on a lot of factors, including your income, existing debts, interest rates, credit history and your credit score. We’ll look at several calculations that most lenders use to evaluate mortgage applicants. The second perspective is a bit more subjective–how much home do you really need? Just because you can qualify for a mortgage, doesn’t mean that you should. Banks will qualify you for as much as they possibly can given their existing underwriting policies. But just because the money is available doesn’t mean you should take it. With that, let’s look at 5 ways to calculate how much house you can afford, beginning with a standard rule of thumb: 2.5 to 3 Times Your Annual Income This was the basic rule of thumb for many years. Simply take your gross income and multiple it by...