If you subtract the monthly maintenance, monthly real estate taxes and monthly homeowner's insurance from the $1500 you mentioned, then divide the result by $4.59. This is the factor that is used on a 30 year fixed mortgage at 3.5%. As an example, if the maintenance, real estate taxes and homeowner's insurance cost $700.00 per month, $1500 - $700 = $800, $800 divided by $4.49 = $178.17, hence you would be able to borrow $178,170 and still be within your budget in this example. Keep in mind that the maintenance. real estate taxes and insurance will vary from unit to unit. Also, the interest rate of 3.5% is today's prevailing rate for a qualified buyer, you need to qualify yourself with a bank top see if the rate you can receive is the same, higher or lower than that.
When you purchase you are best off putting 20% down. In the above example 20% would be about $45,000. Hence you would be able to purchase for a total purchase price of about $220,000.
If you are not looking to buy for another year or so, you should hold off looking for now. I say this because we do not know what the market will be like a year from now, it may be very different, also we do not know where interest rates on mortgages will be in a year from now. Given this there can be a dramatic change over the course of the next year.
If you need further assistance, or want to discuss all this further, contact me direct. Good luck!!
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783