In these harsh economic times, it has become even harder than it was a decade ago, for people to meet basic human needs. What with the sky rocketing prices in education fees, food items, fuel and oil, electricity and so on, owning a home or house has become a luxury that many can ill afford. It is a fantasy that, if nothing happens, will remain in the horizon, always beyond reach, unless something is done and fast.

Even so, not so many people are that keen on getting and buying new homes as there is just not enough money to go round. This is especially glaringly obvious when one looks around and there are no jobs to provide an income from which they could afford themselves shelter. It therefore comes as no surprise that the few that can are clamoring to their banks for mortgages that would suit their needs to a tee. It is then with this in mind that many have decided to look for ways through which they can create a balance between being homeless and getting an affordable price for a home.

It comes as no shock when one contacts their mortgage lender and pop’s the question, „How much house can I afford?“, they are asked to state the amount of money they make in monthly income, how much savings they have ready to put up a down payment for the home, the amount of debt they have, among many other questions, all in a bid to make a determination on the limit to reach when out looking for any kind of shelter.

It is this situation that brought forth an invention that is called the how much house can I afford calculator, which is ideal in determining the kind of house one can by without being a burden unto themselves in regard to a balance in their finances. Most stakeholders in the financial lending industry and sector were consulted and the methodology and guidelines they provided were used to determine the degree to which a certain borrower could afford a certain house.

Here a debt to income ratio totaling approximately 36% was allowed, while assuming a mortgage payment to income ratio at 28% for the conservative estimate, while 33% was employed for the one that was aggressive. It is also important to note and make considerations regarding other areas in need of savings which include college and a retirement nest egg. An assumption of a mortgage plan that spanned 30 years, with a yearly tax payment on property worth $ 3,500, the insurance for homeowners‘ fee of $ 481, which is a national average. Note that private mortgage insurance, which one is more than likely to owe if they deposited a down payment that was on the down side of 20% of the sale price is not inclusive. This then means that the cost of house they could afford would on average cost them anywhere between $ 50 and $ 80 every other month. For more accurate results, one is advised to substitute their own numbers.

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