Tips on knowing how much mortgage you can afford
Posted by Jane Doe on
Tips On Knowing How Much Mortgage You Can Afford
There is a rule of thumb that says that if you have the capacity to repay the mortgage, you can afford a single-family house that costs up to two and one-half times your annual gross income. (Annual gross income is the amount you make before taxes are deducted.)
Like other rules of thumb, this is a general idea of how large a mortgage you can afford. But, because it is so simple, it doesn’t consider all the information that will help you feel comfortable with your mortgage payments.
If you are buying a house with someone else (spouse, parent, adult child, partner/companion, brother or sister or other relative), you should consider your co-purchaser’s earnings and existing debts as well.…
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