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How Much Can You Afford? Massachusetts

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

Local Companies

JPMorgan Chase - Home Mortgage
(617) 429-2059
400 Blue Hill Drive, Ste. 190
Westwood, MA

Pioneer Financial Group
(617)8686300
1972 Massachusetts Avenue
Cambridge, MA

Omnify Software
978-988-3800
10 New England Business Center Drive
Andover, MA

First Call Mortgage Company
603-247-2885
100 Brickstone Square
Andover, MA

Emerson Lending
978-264-4803
179 Great Road
Acton, MA

American Honda Finance Corp
(413) 567-0844
171 Dwight Rd
Longmeadow, MA

MetLife Home Loans
508-667-2981
586 Kelly Boulevard
N. Attleboro, MA

SB Mortgage Group Inc
508-407-5430
206 Southbridge St
Auburn, MA

American Mortgage Resource, Inc.
(617)9728588
62 Mount Auburn Street
Watertown, MA

First Eagle Mortgage
978-777-7767
44 Maple Street
Danvers, MA

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

JPMorgan Chase - Home Mortgage

(617) 429-2059
400 Blue Hill Drive, Ste. 190
Westwood, MA

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