It is important to know how much you can afford before you begin looking at homes to purchase. Talking with a lender and getting pre-approved for a loan puts you in a stronger negotiating position with sellers. As a rule, your monthly housing costs should not be more than 28% of your monthly pre-tax income. These costs include the mortgage payment, real estate taxes, and insurance. If you have long-term debts, such as student loans or car payments, your monthly payments, including your housing costs, should be less than 36% of your pre-tax monthly income. Some loans, such as VA and FHA loans, are more flexible with these basic guidelines.



This post has been edited by newcondos: 14.6.2010, 12:47