813.910.8020 Apply Now

Mortgage Broker Tampa, FL | Mortgage Lender Tampa Florida | Marimark Mortgage

  • Home
  • Homebuyers
  • Homeowners
  • Realtors
  • Investors
  • About Marimark
  • Contact Us
  • Mortgages
  • Apply Now
  • Current Mortgage Rates
  • Calculators
  • Testimonials
  • Blog
  • Videos
  • Featured In
Home / Blog / Mortgages / How Much Can You Afford to Spend on a Home?

How Much Can You Afford to Spend on a Home?

July 30, 2015 By Admin

How Much Can You Afford to Spend on a Home?
Photo Credit: 401(K) 2012/Flickr.

Deciding how much to spend on a home is a very personal decision. From a mortgage perspective, you will qualify to borrow up to a maximum amount. But from a personal perspective, borrowing the maximum amount may not be the best decision.

Lender’s Perspective

From a lender’s perspective, loan eligibility is based on many factors. One common rule of thumb is that your monthly mortgage payment should not exceed 28% of your gross income.

So, let’s say a person has an annual gross income of $60,000. This means he could be approved for a maximum mortgage payment of up to $16,800 a year, which equates to $1,400 a month and includes principal, interest, taxes, insurance, and sometimes PMI.

Compare Your Monthly Payment to Net Income

Though we explored just one mortgage eligibility factor in the example above, each borrower should question whether borrowing the maximum amount is best for them. To do this, consider the monthly mortgage payment in light of your monthly “take home” pay.

A homeowner with a gross pay of $60,000 who brings home $3,600 per month could be hard pressed to live comfortably paying $1,400 a month on a mortgage after paying for daycare, food, a car, and more.

Analyze Your Debt-To-Income Ratio

Another factor a lender will use in determining mortgage eligibility is your debt-to-income ratio, because it’s a good indicator of your ability to repay the loan.

There are two ratios that the lender considers. The front-end ratio only takes into account the expenses related to housing. And the back-end ratio considers all monthly obligations.

Carefully analyze the ratios and make sure nothing is missing from a personal perspective. Make sure you include utilities, insurances, and recreation in your personal calculations.

Tips To Determine How Much You Can Afford

If you are thinking about buying or refinancing a home, you’ll need to know how much you can afford to pay for a monthly mortgage. So here are 4 tips to help you determine how much you can comfortably pay every month.

  1. Prepare a Reasonable Monthly Budget: Don’t forget to include all expenses (mortgage, insurances, healthcare, savings, vehicle maintenance, repairs, gifts, school supplies and fees, etc.).
  2. Estimate Your Down Payment if Buying a Home: The amount you invest in a down payment significantly affects your mortgage. The higher the down payment, the less you will need to borrow.
  3. Consult a Mortgage Broker: When you get close to looking for a home or refinancing, the first thing you want to do is contact a mortgage broker and prequalify.
  4. Stay Abreast of Changing Interest Rates: Small changes in mortgage interest rates significantly impact your monthly mortgage payment.

[Read More: 4 Tips to Determine How Much Mortgage You Can Afford]

Take Away

Most of us don’t want to spend so much on a home that we can’t do anything else in life but make a mortgage payment. So, deciding how much to spend on a home is a very important life decision.

When you start the process of deciding how much to spend on a home, we would be honored to help you work through the numbers so that you can make an informed decision.

Opt In Image
Stay Informed, It's Your Money
Marimark Mortgage Newsletter

The Marimark Mortgage Newsletter will keep you informed with important events in the mortgage industry that could impact your finances.

We especially focus on ways to save money on your current and future mortgages. And, we continually share the information we share with our clients, because we believe informed consumers are the best consumers.

Real estate agents, and other professionals in the industry, will receive an ongoing wealth of information that will help them serve their clients.

Thank you for signing up!

Filed Under: Mortgages Tagged With: buying a home

Opinions, estimates, forecasts and other views contained in this page do not necessarily represent the views of Marimark Mortgage or its management and should not be construed as an offer to provide financing at the rates or terms mentioned. Due to market fluctuations, interest rates are subject to change at any time and without notice. Interest rates are also subject to credit and property approval. Although Marimark Mortgage attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. Information from this page may be used with proper attribution.

Save with a Mortgage from Marimark

Whether you are buying a home or refinancing, you can save with a mortgage from Marimark Mortgage!

    Search

    Post Categories

    Testimonials

    Refinancing with Mary an absolute pleasure

     
    Refinancing with Mary has been an absolute pleasure. I have never been through the process before and she took the time to explain each step. She was prompt (had a rate locked in right away) and most importantly always answered the phone or emails almost immediately! The communication line alone made the refinancing process every bit worth it. Would recommend to anyone, and will be back for any future purchases! Bret Brennan, March 2021
    See More Reviews
    Marimark Mortgage LLC
    5327 Primrose Lake Circle
    Tampa, FL 33647-1328
    (813) 910-8020
    (866) 910-8020

    Accessibility
    Privacy Policy
    Terms of Service
    Sitemap

    Reviews

    Website Testimonials
    Google Reviews
    Zillow Reviews
    Trulia Reviews
    Facebook Reviews
    Yelp Reviews
    BBB A+ Rating

    FOLLOW US

    • ‎
    • ‎
    • ‎
    • ‎
    • ‎
    • ‎
    Marimark Mortgage is a BBB A+ Accredited Business

    Recent Posts

    • FHA Announced a 30-Basis Point Reduction to Annual Mortgage Insurance Premiums
    • How Can You Improve Your Credit Score?
    • Historical Mortgage Rates From The 1970s
    • What You Need to Know About Mortgage Forbearance
    • Top Tips to Save Money for a Down Payment

    © 2023 Marimark Mortgage, LLC All Rights Reserved. | Internet Marketing by Image Building Media. | RSS Feed

    Reviews / Recommendations: Google, Zillow, Trulia, LinkedIn, Facebook, Yelp, BBB

    Licensed in Florida by the Office of Financial Regulation, Mortgage Lender License #MLD77.
    Licensed in Virginia by the Virginia State Corporation Commission, License MC#4556.
    Licensed in Pennsylvania by the Department of Banking and Securities, License #40222.
    NMLS#248318 – www.nmlsconsumeraccess.org.