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How Much Can You Afford? Maryland

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

Local Companies

Admiral Mortgage
410-559-6491
25 S Charles St
Baltimore, MD

BASK Properties
717-830-2767
240 South Potomac St
Hagerstown, MD

Residential Home Loan Center
410-534-3290
2208 Eastern Ave
Baltimore, MD

Proficio Mortgage Ventures
303.448.2920
11219 Lockwood Dr.
Silver Spring, MD

AA Mortgage Gro
443-869-5682
8 W West St
Baltimore, MD

Family First Mortgage Group LLC
410-793-1192
3525 H Ellicott Mills Dr.
Ellicott City, MD

SunTrust Mortgage
410-308-6000
1966 Greenspring Dr
Timonium, MD

Allied Home Mortgage Capital Corporation
410-783-9407
516 N Charles St
Baltimore, MD

Baltimore HUD Homes
(443) 866-8699
1953 Laurel Oak Dr
Baltimore, MD

American Home Loans
410-230-0232
1 E Chase St
Baltimore, MD

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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

Admiral Mortgage

410-559-6491
25 S Charles St
Baltimore, MD

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- Step 3: Mortgage Pre-Approval Maryland

Getting pre-approved by a lender before shopping for a home helps you in two ways.

- Can I Afford a Home Stager? Maryland
- Buying a House Before You're 30 Maryland
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Related Local Event

Free Introductury Real Estate Investing Class
Dates: 6/30/2009 - 6/30/2009
Location: Investors United School of Real Estate
Baltimore, MD
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