Purchasing a home is one of the most important financial decisions you can make, and one of the first questions that arises when buying a home is how much mortgage will I be able to afford? Trying to decide what type of home you want to buy, and trying to figure out how much mortgage you will be able to afford is a major consideration. If you earn a salary of approximately $100,000 in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, and are trying to understand how much mortgage you can afford, Foundation Mortgage can help.
Understanding Your Budget
You will want to have a strong understanding of your budget in order to determine what type of housing price you can afford when taking the initial steps to purchase a home. You will first want to tabulate how much money you earn each month and determine the amount you typically spend on outgoing monthly expenses, such as bills, recreational activities, and other necessities. You will then want to determine the amount you will be able to pay for general housing costs, such as a down payment, property tax, homeowner’s insurance, and the amount you will pay for the monthly mortgage cost. After you have evaluated your financial situation, you will have a fairly strong idea regarding how much mortgage you will be able to afford.
Tips to Help You Determine An Appropriate Home Cost
When attempting to determine how much mortgage you can afford, a general guideline is to multiply your income by at least 2.5 or 3 to get an idea of the maximum housing price you can afford. If you earn approximately $100,000, the maximum price you would be able to afford would be roughly $300,000. There are other factors to take into consideration as well, including your credit score, the interest rate you are able to procure, and the amount you are able to put down.
Another rule to adhere to when determining how much home you can afford is that your monthly mortgage payment should not surpass 28% of your monthly income. For example, if you make $100,000 per year, your monthly mortgage payment should not exceed $2,333. A few other important rules to follow are that your total debt should not exceed 40% of your monthly earnings and your total monthly housing payments should be over 32% of your total monthly income.
Get Help Understanding How Much Home You Can Afford
If you earn around the amount of $100,000 and are trying to figure out the housing price that you can afford in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, Foundation Mortgage can help. Contact our loan specialists today to get started.
