How Much House Can You Afford?
Before you begin your home search, you need to do a little planning. Many lenders will offer you a preliminary approval for a mortgage so you can negotiate as a buyer. Knowing your price range will bring your house hunting into focus. How much house you can afford depends on many factors, including how much you can manage for the monthly housing payment and how much you can contribute toward the down payment. Monthly payments include principal and interest on the mortgage loan, property taxes and insurance against fire and other hazards. These four costs are often abbreviated as PITI. For some buyers, monthly housing costs may also include homeowners’ association dues, condominium fees and mortgage insurance