Bank of England Mortgage Blog

How Much House Can We Afford?

What Can We Afford?
What Can We Afford?
How Much Can We Afford?

This is always the first question that we hear, and it’s a good one. As you might imagine, one size does not fit all. We offer a wide array of mortgage programs with an even larger number of qualification variations. We’ll give some general guidelines and we’ll also say that the best way to truly find out is to take advantage of our no cost pre-approval process.

For a quick rule of thumb, if you calculate your gross monthly income (that is your annual pay divided by 12, before any taxes are deducted) and multiply it by 40%, you’ll arrive at an approximate number of what your housing expense (principal, interest, taxes, insurance, mortgage insurance and association fees) PLUS any debt on your credit report AND any child support or alimony should add up to.

There are programs that go to 45%, 50%, even 55% but, this is a safe first step. So, if you have $90,000 in annual income, that is $7,500 (90,000/12)per month so you can use $3,000 ($7,500×40%) per month. If you have a $500 car loan, $350 per month in student loans and $100 in credit cards, you will qualify for a home up to $2,050 per month.

Again, this is very Conservative and does not take into account differences in qualifying credit scores and other factors.

The best way to find out what you can afford is to go through our easy pre-qualification process. Start right here

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Andy Raffle

Branch Manager

NMLS #156564

90 W Afton Ave. Ste. 203

Yardley, PA 19067

P: (215) 493-3752