Monthly mortgage?

Question

I want to buy a house, but i don't want my payments to be any more than $1700 (including taxes and ins) What should my loan be? My husband and I bring home 5,500 a month after taxes, are we going to be able to afford this???

We both have good credit and no debt.

Answer 1

You should have no problem affording that.  Talk to a lender and see what they tell you.  They will be able to tell you what you can afford and what your mortgage will be every month.  Remember though, that the payment they tell you will not include taxes and insurance.  Figure in at least $200 per month (more if the house is larger) for that.

Answer 2

http://www.mortgage-calc.com/mortgage/si...

Use this calculator to find the payments for various loan amounts, rates and terms.

Answer 3

You should not have any problems finding financing as you probably make the income to qualify for the desired payment.  As far as your loan amount, a good general rule is for every $100K you borrow, your payment is roughly $800 without taxes and insurance.  So you might want to look at houses in the $200K and under range to keep your payments in line with your budget.  If you have a lot of down payment, then you can obviously look at more expensive homes but keep in mind you want to borrow less that $200K.  In todays lending climate, chances are you will have to come up with some downpayment to buy.  

Good luck.

Answer 4

There's a lot of variables right now and a couple of things you should consider:

First, how long do you plan on owning the house? If it's 10 years or less, consider an interest-only loan (like a 30/10, where the first 10 years are interest-only and fixed - in year 11, it jumps to the current market rates and becomes a fully-amortized 20-year loan). You'll pay less per month on an interest-only loan. But, it's all interest and none of the principal is paid off. So, you continue to write off the same amount of mortgage interest on your taxes each year.

With an amortizing loan, you do pick up some equity by paying down the principal. But, it's just a slight amount and it takes about 10 years to get to the break-even point of how much equity you accumulate versus how much you saved on the payments. Plus, your interest portion of the payment goes down each month. So, you get less of a write-off each year.

You can write off mortgage interest and property taxes. So, if you buy a $200K home and pay $2000 a year in property taxes, Uncle Sam will give about $800 back to you at tax time. Also, at $1700/month interest-only, that's $20,400 a year in interest, which means $8160 back to you at tax time. So, when you consider how much you get back in taxes, that's $8160 + $800 = $8960, or $746.67 a month less withholding (more take-home pay) each month. So, you're actually paying less than $1000 a month on that mortgage.

Go through the calculations with a mortgage broker or a lender. Find out what loan products are available and what would best suit your needs. Then you'll know exactly what your price range is and can go house hunting from there.