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If I want to pay $800 a month, how much house can I afford?

Assuming I put 10-15k down payment

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  • 7 years ago
    Favorite Answer

    A full housing payment generally consists of 4 or 5 parts and is referred to as PITI. This stands for principal, interest, taxes and insurance. Principal and interest payments are generally what are quoted from banks or calculators. For a $100,000 house, after the $10,000 down payment the loan amount would be $90,000 and at today's low interest rates (3.5% - I'm assuming a 30 year fixed rate loan and you have great credit), the principal and interest payment (PI of PITI) would be about $420 a month over 30 years.

    The T (of PITI) is property taxes that (nationwide) average 1.5% of value per year (BE CAREFUL HERE! I have personally seen anywhere from 0.5% per year to 4% per year). So assuming your house is valued at $100,000 you'll pay about $1500 per year in property taxes which is another $125 a month.

    The final part of PITI is insurance. With less than 20% down, you'll have 2 kinds to pay. Homeowner's insurance and Private Mortgage Insurance (PMI). Homeowner's insurance should be ~$500 per year (unless in hurricane country and then multiply by 5). That's another $42 a month. Private mortgage insurance could easily add another $100 a month to your payment.

    So the total payment is PITI - $420 + $125 + $42 + $100 = ~$687 a month.

    So, unless you live in a high tax or insurance area, it looks like you could go over $100k - maybe $115k?

    good luck!

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  • LILL
    Lv 7
    7 years ago

    Around $100,000.00...not including taxes, insurance and PMI.

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  • Rob
    Lv 7
    7 years ago

    here locally around 100,000 loan.

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  • Anonymous
    4 years ago

    Pretty good arguments here.

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  • Anonymous
    4 years ago

    can anyone tell what is the right answer for this question?

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