Understanding how much home you can afford is
the first step in becoming a homeowner. The home
you can afford depends on many factors, including
your gross monthly income (income before taxes),
down payment amount, and monthly debt.
your
mortgage
payment
should not
be more
than 28% of
your gross monthly income
28%
M
o
n
t
h
l
y
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n
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o
m
e
monthly
debt,
including
mortgage,
should not
be greater
than 43% of
your gross monthly
income
43%
M
o
n
t
h
l
y
D
e
b
t
can range
from 0% to
20% of the
total home
cost
20%
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can you afford?
HOME
How much
Lenders consider three primary factors when
deciding how much you can borrow
The amount you are approved for
may exceed the payment you are
comfortable with - be sure to leave
enough room to cover living
expenses and savings goals
Other costs to consider
Closing Costs
Final closing costs typically depend on
the total loan amount and can include:
• Mortgage origination fees
• Inspections and surveys
• Title insurance and title search
• Escrow deposit
• City recording fees
Home Ownership Expenses
Owning a home requires financial commitment
beyond your monthly mortgage payment,
including:
• Mortgage insurance (required for
most mortgages with down payments
less than 20%)
• Home insurance
• HOA dues
• Utilities
• Property taxes
• Repairs and maintenance
Make sure you're taking all of these costs into account when asking
yourself, "How much home can I afford?" It's important to be informed
on all the costs involved prior to committing to a home loan.
Building up your savings will help you afford more
home. It can also help you compete better in the
market for the house you want, make it easier to
handle the up-front costs of buying a home, and make
home ownership stress-free and easier to manage.
The Bottom Line:
This includes recurring monthly obligations such as
credit cards*, car payments, and student loans.
*if you pay off your credit card each month, this
does not apply
Federally insured by NCUA
406.651.AFCU (2328)
www.altanafcu.org
The mortgage experts at Altana
can help you determine how
much you can afford and
pre-approve you for purchasing a
home. Give us a call today!
TM
Example of how to determine what you can afford*:
Gross monthly
income:
$4,000
5
%
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g
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e
max
$1,120 = 28% x $4,000
$1,720 = 43% x $4,000
Max mortgage
payment cannot
exceed:
this includes principal and interest, mortgage
insurance premium, hazard insurance premium,
property taxes, and homeowners' association dues
$48,000 yearly income 12 months
this includes mortgage payments, credit card payments,
car loan payments, student loan payments, child support
payments, alimony payments, and legal judgments
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Evaluate your current living expenses and figure them into your budget with your
estimated mortgage payment. This may include groceries, car insurance and
maintenance costs, childcare, healthcare, and other expenses you regularly incur
in addition to monthly debt obligations.
Avg. closing
costs in MT for
a $200K home
0 =
0 =
=
0 =
A good place to start is using
your current rent payment
$1,900
*This is an
estimate
only,
total loan
and
payment
amount will
vary due to
interest
rate, down
payment,
and term
Total of monthly
loan payments
cannot exceed:
