How Big of a Mortgage Can I Afford?

Not only does owning a home give you a haven for yourself and your family, it also makes great financial sense because of the tax benefits which you can’t take advantage of when paying rent.

The following calculation assumes a 28 percent income tax bracket. If your bracket is higher, your savings will be, too. Based on your current rent, use this calculation to figure out how much mortgage you can afford.

Rent: _________________________

Multiplier: x 1.32

Mortgage payment: _________________________

Because of tax deductions, you can make a mortgage payment, including taxes and insurance, that is approximately one-third larger than your current rent payment and end up with the same amount of income.

For more help, use Fannie Mae’s online mortgage calculators.

Comments

  1. Rosemarie O. Cunningham says:

    Because when we think about the real facts: 44 million Americans without health insurance, millions without jobs, a 50-year high on mortgage foreclosures, an historic high the third year in a row on personal bankruptcies. Rent to Own Team

  2. donald earl says:

    Nicely put keep it up