House Affordability Calculator: How Much Should You Borrow?
By Geoff WalkerHome Worth Columnist
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Mortgages are the biggest financial responsibility most of us ever take on. In all the excitement of buying a new house it is important not to get in over your head. The house affordability calculator can give you a quick indication of the total home loan that mortgage companies should be able to offer you. This is just a rule-of-thumb guide, but it is a useful starting point.
Mortgage House Affordability Calculator: Making it Work
The home affordability calculator needs three figures:- The term of your mortgage–how many years it will take to pay your home loan
- The interest rate on the loan
- The monthly payment you can afford
Mortgage House Affordability Calculator: The Next Step
The affordable home loan figure you get from the house affordability calculator can give you an indication of how much you can afford, but mortgage companies often have different rules for deciding what they are willing lend you. They make judgments based on your income, your credit history, any other debts you have, your standard monthly expenditures, and an estimate of your future earnings. Make your case for what you want to borrow. Some lenders can be more flexible in applying their guidelines than others. You may be pleasantly surprised by the variety of home loans on offer, including different interest rates and repayment terms.Finally, a word of caution. Whatever mortgage companies are prepared to offer you as a home loan, make sure you feel comfortable with the monthly repayments. Using a house affordability calculator and plenty of common sense will help guide you to a home loan that you can repay with confidence.
About the Author
A freelance writer with degrees in arts and commerce, Geoff Walker has experience in corporate financial management, mortgages, and fund-raising.
