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How Much House Can You Afford?

Though you may be willing to spend more on a home than you may possibly be able to afford, the name of the game is how much a lender calculates you can afford. Your realtor will put you in touch with a lender they trust to help you through the financial process of pre-qualifying (targeting the among that a financial institution will lend you).

In general, lenders allow your total monthly housing costs to go as high as but not more than 30 percent of your gross monthly income. The second requirement is that not more than 36 percent of your gross monthly income can be tied up in total monthly house payments and payments on existing long term debts.

How A Lender Calculates Your Loan Amount

Lenders use slightly different formulas for arriving at your assigned "total monthly house payment". These costs generally include your mortgage principal and interest payments, and property taxes as a monthly figure, along with hazard insurance as a monthly figure. These four items are referred to as PITI (principal, interest, taxes & insurance). If you're required to pay private mortgage insurance (PMI) because your down payment is less than 20%, those premium payments will also be included.

Get Your Financing in Order

You can get together with a lender to get your loan application completed and the financing process started. Be prepared to provide the lender with copies of any important and necessary information.

Please Contact Us

Our Association Staff is
happy to serve you.

EMAIL Click Here
PHONE (530) 272-2627
FAX (530) 272-2646
ADDRESS 336 Crown Point Circle
Grass Valley, CA 95945
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