Mortgage Calculator
How Much Can I Afford?

Calculate what you can afford when buying your new home

A mortgage calculator can be a great help in deciding what your price range is when buying a new home, but they’re not the only tool you need. Simply put, you can afford a house that costs as much as the largest monthly mortgage payment you qualify for. To estimate the mortgage you qualify for, take your gross monthly income (before taxes and other deductions) and multiply by .28. This works out to just over 1/4 of your gross income.

Mortgage companies use something called qualifying ratios to determine how much they’ll lend you. Most mortgage companies use either a 28/36 ratio or a 25/33 ratio. The first number in each pair is the percentage of your gross income that the lender would consider acceptable as a monthly mortgage payment (i.e. if you make $3,000 per month, 28% of that is $840 per month).

The second number in each pair is used when all debt payments are considered, not just the mortgage. (i.e. if you make $3,000 per month, but also have a $250 a month car payment, 36% of $3,000 is $1,080, minus the $250 car payment equals $830). As you can see, in this example the numbers work out to be almost the same. Obviously if you have more debt you would qualify for less.

Consider insurance and property taxes when making your calculations, these things are not always included in the estimates produced by mortgage calculators.

Use the mortgage calculator below once you have determined your  price range. Browse lenders who are ready to help you unlock your dreams now! Want advice or a local lender? Linda is also happy to direct you to reputable, trustworthy lenders in the Albuquerque area.

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