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How Much Can You Afford? Connecticut

Shopping for a home but not sure how much you can spend? Here's how to figure out your price range.

Local Companies

SETTLERS MORTGAGE COMPANY LLC
(203) 227-2422
Evergreen Parkway
Westport, CT
A STRAIGHT TO THE POINT FINANCING
(203) 576-6877
242 GODDARD AVENUE
BRIDGEPORT, CT
Founders Home Capital Corporation
860-667-1321
75 Johnson St
Newington, CT
William Pitt Sotheby's International Realty
203-245-6700
670 Boston Post Road
Madison, CT
WPI
860-656-7671
Silas Dean Hwy
Wethersfield, CT
Joanna Martin/Coldwell Banker
203-453-4477
226 East Main Street
Branford, CT
North Atlantic Mortgage Corp.
877-794-5363
1011 High Ridge Road
Stamford, CT
Scholastic Mortgage
203-453-5555
96 Broad Street
Guilford, CT
Wells Fargo Home Mortgage
203-458-0140
125 Water Street
Guilford, CT
Coldwell Banker Coast & Country
203 458-4100
1250 Boston Post Road
Guilford, CT

provided by: 

Qualification ratios are set by the lender that state your housing expense to income, and housing expense plus other debts to income, cannot exceed a specified number. Many lenders use a 28% housing expense to income and a 36% housing expense plus debts to income. Other ratios may be how much you put down on a home.  It is important to remember that these ratios may vary from lender to lender and each application is handled on an individual basis.

 

Housing Expenses

Your montly housing costs include the mortgage principle, interest, taxes and insurance often abreviated PITI.

 

  • Generally speaking, to qualify for conventional loans, housing expenses should not exceed 26% to 28% of your gross monthly income.
  • For FHA loans, the ratio is 29% of gross monthly income.

 

Example

Annual Income

 

Gross Monthly Income

Maximum Conventional Loan Housing Expense

Monthly Housing Payments

$30,000

÷12

$2,500

X28%

$700

 

Long-Term Debt

Any expenses that extend 11 months or more into the future, such as car loans, are termed long-term debt.

  • For conventional loans, total monthly costs, including PITI and all other long-term debt, should equal no greater than 33% to 36% of your gross monthly income.
  • For FHA the ratio is 41%.

 

Budgeting for Your Home

When budgeting to buy a home, it is important to allow enough money for additional expenses such as:

 

  • maintenance
  • utilities
  • homeowner’s insurance
  • property insurance

 

Published on January 25, 2007

Read full article at realestate.com

Featured Local Company

SETTLERS MORTGAGE COMPANY LLC

(203) 227-2422
Evergreen Parkway
Westport, CT
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