There's a difference between how much lenders can approve you for and what you can afford financially. The monthly payments you can afford may be more or sometimes less than what you are able to be financed for. So first, take some time to organize your expenses and determine your total income, and compare the two to discover what is the maximum you can spend on housing. You can then use this calculator on the left to get an idea of your current borrowing capacity and what your monthly payment will allow you to purchase. Where lenders are concerned, buyers are capable of purchasing a home with a value of two or three times their annual household income. The amount you can borrow is dependant on many factors including employment history, credit history & score, current financial picture (savings and debt), and down payment. There are also special loan programs available to first time home buyers and veterans, which may apply to you depending on your particular situation.

You should contact a mortgage broker or financial institution to get advice about how each type works and which will be best for your current situation. They will work with you to create a picture of your circumstances and give you sound advice about the various programs. Which mortgage program you choose depends on many factors - one of the biggest determining factors it how long you think you will own your home.

Mortgage payments usually include three portions: Principal: Which is a repayment of the amount borrowed Interest: Payment given to the lender for lending you money Taxes & Insurance: Sometimes optional payment into an escrow account for property taxes and/or hazard insurance. If optional on the mortgage you will be remitting payment to the Tax Assessor and property insurance company.

This can vary depending on the situation. Frequently we find you will need have the following: Earnest Money: A deposit given with the offer to purchase Down Payment: A percentage of the purchase price Closing Costs: Costs associated with processing paperwork to purchase.