Buy Versus Rent?
Should you buy or rent? Click here to find out.
How much mortgage can you afford?
It depends on a number of factors:
- Most important is your gross household income
- Down payment you are providing for your home purchase
- Mortgage term and interest rate of your loan
- Your assets and liabilities - number/amount of loans and credit card debts
There are 2 simple rules lenders use to determine how much mortgage you can afford.
1) Your monthly housing costs should not exceed 32% of your gross monthly household income. Housing costs include monthly mortgage payments, taxes and heating expenses. If applicable, this sum should also include half of monthly condominium fees.
2) Your entire monthly debt load should not be any more than 40% of your gross monthly income. This includes housing costs, car payments, personal loans, and credit card payments, etc.
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