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Posted in Mortgage
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Question By
BobD124

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Why can I only buy a house for $75,000
MAKE 3600 A MONTH
$550 CAR PAYMENT
$50 CREDIT CARD DEBT

MORTGAGE CALCULATOR SAY MAX HOUSE ABOUT $75,000
$804 PAYMENT
mY CURRENY RENT $1,170

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Something is off

Helpful to 2 out of 2 people

Something may be off with your mortgage calculator...

The payment on a $75,000 loan over 30 years at 4% is about $360/month (Principal and Intrest only)

Of course, you do need to add in escrow payments to cover Taxes and Insurance.  

You'll also have to add Private Mortgage Insurance if you won't be putting down 20% as a downpayment

So let's take the following scenario

P&I at $360
Taxes at 1.5% ($1200/year) $100

Insurance at ($800/year) $67

PMI at .5% ($400) $35

Your total payment should be about $562/month

Now also keep in mind that a house has a lot of other expenses you need to keep in mind like paying for Maintenance, Water, and maybe even HOA fees.

Let's make some assumptions:

Maintenance at 1.5% ($1200/year) $100

Water (for a small yard) $75

and no HOA

Now you're up to $737/month and this sounds like an amount you can easily afford to pay.

Based on your income and debt, if you can come up with a 20% down payment, you can probably afford a house in the $100-120k range

If you can't come up with 20% down, you will be able to afford less because you'll have to pay PMI and that takes a bite out of what you can afford.

Keep in mind that a bank will likely qualify you for much more than you can afford.  Just be honest with yourself about the true costs of owning over renting to figure out what you can afford.

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Helpful to 1 out of 1 people

Were are the rest of your bills?

Car Ins.
Renter Ins.

Gas and Elect. 

What would the monthly or yearly taxes be for your area

what do you pay for food monthly?

How much do you have in savings?

The norm is a home payment should be no more then 25% of your income and in your case that would be 900 dollars.

and there are other costs as well.

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