January 23, 2007

How Much House Can You Afford?

How Much House Can You Afford?

�

There is a rule of thumb that says that if you have the capacity to repay the mortgage, you can afford a single-family house that costs up to two and one-half times your annual gross income. (Annual gross income is the amount you make before taxes are deducted.) Like other rules of thumb, this one is handy and can give you a general idea of how large a mortgage you can afford.� But, because it is so simple, it doesn't take into account all the information that will help you feel comfortable with your mortgage payments.

�

If you are buying a house with someone else (spouse, parent, adult child, partner/companion, brother or sister or other relative), you should consider your co-purchaser's earnings and existing debts as well. Remember, if you apply for a loan with somebody else, you and your co-borrower are both legally responsible for repayment of the mortgage.

�

Your buying power depends on how much you have available for the down payment and how much a financial institution will agree to lend you.

�

Remember, Philadelphia real estate is our specialty. If you're looking for real estate anywhere in the Philadelphia, PA area, including: Center City, Art Museum, Bella Vista, Northern Liberties, Old City, Queen Village, Society Hill, South of South, Washington Square West, Chestnut Hill, East Falls, Fishtown, Manayunk, East Mt. Airy, West Mt. Airy, Overbrook Farms, Roxborough, Spruce Hill, University City or one of the many other areas we serve, we'd love to help you find the home of your dreams. If you'd like to search for Philadelphia real estate now, just click the "Search for Philadelphia Real Estate" link at the top or bottom of this page.