I want to buy a new house, how much can i afford? - this is what most homebuyers are concerned about. The mortgage calculator afford is what buyers should use to figure out "how much can i afford to pay for a house". By assuming the loan amount you require, you'll come to know whether your monthly income is sufficient to help you afford the mortgage or the home you're looking for.

To check "how much can I afford to pay for a house", you need to calculate 2 ratios - housing and debt-to-income ratios. The housing ratio which denotes how much you spend on housing expenses (including any existing mortgage payment) shouldn't exceed 28% of your gross monthly income. To be able to afford a mortgage, your debt-to-income ratio should not exceed 36%. The debt-to-income ratio includes your housing expenses as well as payments on installment and revolving debt. For FHA loans especially, the housing and debt-to-income ratios should be 29% and 41% respectively.

Let's take an example to find out "how much can I afford to spend on a house".

Say, the gross monthly income of a family is $20,000. Since you need to keep your housing ratio to 28%, the maximum monthly mortgage payment that you can afford = [(28/100)*20,000] = $5600. So, if you're confused as to "how much can i afford for a house payment", just calculate your housing ratio.

Now, since you need to keep the debt-to-income ratio as 36%, therefore, you can manage to pay [(36/100)*20,000] = $7200 as the total monthly debt payment which will help you determine "how much of a mortgage can i afford".

Thus, in order to evaluate "how much home can i afford" or "how much of a mortgage can i afford", work out your monthly housing expenses and debt payments. The figures will help you analyze if you can manage a mortgage or evaluate "how much home can i afford".

DISCLAIMER: The prequalification figures are based on guidelines followed by conventional loan programs. The tool provides accurate calculations. But the figures are not guaranteed. To get the exact figures, further review is required. In case you have less than 20% equity in your home, a monthly mortgage insurance premium may be needed.

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