Can you afford the home of your dreams?

Buying a new home carries costs that are far from inconsiderable – and are more extensive than may initially meet the eye. When you're considering making a home purchase, it's vital that you understand these costs before even beginning to shop around for a property and a means of financing it.

How Much House Can You Afford?

Mortgage Calculator © ML



Here is a list of some of the major costs of buying a new home. Keep in mind that this is only a partial list and that each real estate transaction differs, so it's important for you to do your research ahead of time.

  • Loan origination fee, which applies to any new mortgage loan
  • Loan points, which are paid up front in exchange for a more competitive interest rate. One point is worth 1 percent of the home's value.
  • Any fees for a mortgage broker; this fee lies solely on the shoulders of the buyer.
  • Fees for title insurance and title work. This is to insure that the title is transferred correctly so there are no problems later on.
  • Early termination fees, which apply to the seller should he or she has a mortgage that carries a fee for early payoff.
  • Homeowner insurance premiums, which are required for an insurance policy.
  • An application fee for mortgage insurance if you are putting down less than 20 percent on the property.
  • Appraisal and inspection fees, which are vital to make sure the home is correctly valued and that there are no major problems with it.
  • Any attorney's fees or real estate agency fees.

What Is A Home Affordability Calculator?

home affordability A home affordability calculator helps you figure out how much you can reasonably spend on your home purchase. To use this calculator, enter the following information:

  • Monthly income
  • Monthly debt
  • Mortgage interest rate
  • Mortgage term
  • Down payment
  • Estimated taxes
  • Estimated insurance

The calculator will then tabulate the home price, mortgage amount, mortgage payment per month, monthly taxes and insurance, and your total monthly payments for your home.

You'll be able to see at a glance how much your property purchase will cost you each month.

How Can I Use This Information?

The Home Affordability Calculator gives you an at-a-glance understanding of how much money you'll need to spend on a monthly basis for your new home. This is extremely necessary information when you're considering buying a new home, since you want to make certain that the purchase will fit within your household budget and that the amount of money you'll need to spend per month is sustainable.

Once you have the calculator's results, you'll be able to shop for properties and mortgage loans that fit comfortably within your personal budget, ensuring that you won't run the risk of losing your home to foreclosure or having to declare bankruptcy because of buying a home that is more than you can afford.