Is there a way to calculate your ideal price range for buying a home?

March 3rd, 2010 | by admin |

Is there some kind of formula you can use to figure out what home prices are within your budget? As in, which prices are reasonable considerations and which are out of the question for you? Also, are property taxes calculated into the selling price?

(I’m in Massachusetts if it makes any difference) Thanks.

The old fashion way was we figured a 1000 a month payment for every 100k we borrowed. This figure covered everything needed to own a home. Property taxes, home owner insurance, water, sewer, and so on. Property taxes are not included in selling price.
How much home you can afford is how much down payment you have.
Last home I bought I had 50k for down payment, I could afford 2k a month in payments. So we could afford a house costing 250k or less.
Using that formula gives you breathing room each month.

  1. 4 Responses to “Is there a way to calculate your ideal price range for buying a home?”

  2. By Ashley C on Mar 3, 2010 | Reply

    MOST people/couples will take their annual salary and multiply it by 2. That’s the price of a house you can afford. So if John makes 45K and Jane makes 37K … they can afford a house approx 160K. Some states include taxes with the property and other states make you pay property taxes every year … or even both. Just call a local bank and ask. They should be able to tell you since the would be helping you with the loan.
    References :

  3. By North Shore MA Agent on Mar 3, 2010 | Reply

    In order to find out what you really can afford and get financing for, you need to sit down with a lender. They will be able to tell you how much you can afford based on your income, debt, etc and give you monthly payment breakdowns of what your mortgage payments would be with taxes and condo fees (if applicable). There are a lot of online mortgage calculators that can give you an idea of what you can afford, but I would suggest sitting down with a lender and discussing it with them.

    FYI – You will need a pre-approval letter from a lender in order to put in an offer on a house.

    Where in MA are you looking to buy?
    References :
    I am a Massachusetts Real Estate Agent

  4. By sassy25 on Mar 3, 2010 | Reply

    The old fashion way was we figured a 1000 a month payment for every 100k we borrowed. This figure covered everything needed to own a home. Property taxes, home owner insurance, water, sewer, and so on. Property taxes are not included in selling price.
    How much home you can afford is how much down payment you have.
    Last home I bought I had 50k for down payment, I could afford 2k a month in payments. So we could afford a house costing 250k or less.
    Using that formula gives you breathing room each month.
    References :

  5. By Quicken Loans on Mar 3, 2010 | Reply

    A general rule of thumb is to spend roughly 25-30% on housing costs. So if you take home $4,000 a month, then you can afford $1,000 a month mortgage payment plus taxes comfortably. How much home you can afford depends on how high of a monthly payment you can afford, how high taxes are each year in that area, how good is your credit, and what kind of mortgage rate you can get.

    Here’s a mortgage calculator to figure out payments:
    https://www.quickenloans.com/mortgage-calculator/mortgage-payment

    Property taxes are paid each year, and are due at closing generally. May be different in different states though.
    References :

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