Method 2: A house payment should be no more than 25% of your gross monthly income (before taxes and deductions)
Annual Salary
Gross Monthly Income
Maximum House Payment
$50,000
$4,167
$1,250
$60,000
$5,000
$1,500
$70,000
$5,833
$1,750
$80,000
$6,667
$2,000
$90,000
$7,500
$2,250
$100,000
$8,333
$2,500
$110,000
$9,167
$2,750
$120,000
$10,000
$3,000
$130,000
$10,833
$3,250
$140,000
$11,667
$3,500
$150,000
$12,500
$3,750
$160,000
$13,333
$4,000
Keep in mind that these are guidelines. There are many other factors that determine how much home you can afford.
Step 2: Take a close look at your credit report.
Your Credit History is one of the principal measures used by a lender to determine your interest rate. The better your credit, the
better lending terms your bank or lending institution will be able to offer you. A higher interest rate translates into a higher
monthly mortgage payment, and so your credit score will directly affect how much money you can borrow and at which homes
you should be looking.
.
You should be aware of what information is on your credit report by obtaining and reviewing copies of your credit report from
the three main credit report agencies.
Equifax
www.equifax.com
1.888.766.0008
TransUnion
www.transunion.com
1.800.888.4213
Experian
www.experian.com
1.888.397.3742
Remember that there are several factors that affect your credit report including your payment history, your current ratio of debt
to income and signs of responsibility and stability. And since not all creditors report to all three agencies, it's best to
order a report from all three institutions. Your goal in ordering all three credit
reports is to make sure that all of the information stated on each report is
accurate and correct.
.
If there are any discrepancies on your credit report, it's important that you
contact the rating agencies and have those records corrected. Taking the time to
verify and correct your credit report before you speak to a lender will help
eliminate hassles later on.
How Does Your Score Rate?
Exceptional
Above 780
Great
740780
Good
690740
Fair
620690
Low
Below 620
Th