How do I figure out what home I can afford in Park Slope?

Asked by Halley S., New York, NY Mon Apr 23, 2007

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HouseHunt’s answer
HouseHunt, , New York, NY
Wed May 9, 2007
step by step:
1) add up your income and investments
2) determine how much liquid (i.e. readily available cash you can have for a down payment)
3) add up all your bills and debt
4) determine your monthly left over cash after all expenses and bills
5) this is what you have to put towards a mortgage (don't forget if you pay rent now to NOT include that as an expense b/c that money will now go to your mortgage)
6) look at that number - and cry
but seriously, look at the interest rate and figure out what that equates to - don't forget to consider what you are placing down as a down payment and what your credit score is as that will affect your interest rate - and please PLEASE do a 30 yr fixed. trust me.
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Sonni Woodbu…, , Prospect Heights
Mon Apr 23, 2007
Roughly, like this: First, figure out how much cash you have for a downpayment. Then, calculate how large a mortgage payment you woule be comfortable paying per month. Current 30 year fixed mortgage rates are around 6.5%, so divide your monthly comfort payment by 6.43. This will give you the mortgage total for the payment you are comfortable making at 6.5% Add your downpayment to that amount and you have a ballpark figure for a house you can be comfortable with.
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